Best solution to credit card debt = Tesco loan? Any advice?

ViolaLass

So you're currently paying £513 a month to CCs and are struggling, despite earning £40k a year.

I don't know how big your mortgage is (although you say it is small so one would assume the monthly payments aren't huge) but where is the rest of your money going? Assuming you have no dependents etc (which you haven't mentioned), you should be able to throw a lot more money at the issue. You could try posting an SOA (statement of affairs) in the deft free wannabe section so that posters could give their opinions on where you could save money.

anyusernameleft

Mags_cat wrote: »

If I'd typed that and then gone back to re-read it I'd be seeing a huge red flag in my mind.

If I'd had smaller levels of debt and consolidated them but then found myself owing additional, higher levels of debt I'm not sure consolidating them again would be a great idea. What would be better, for me, would be to work out why I was continuing to spend beyond my means.

But everyone deals with things differently, I accept that.

The obvious criticism Mag_cat, ViolaLass and everyone round here is so quick to point the finger but as I was there I know perfectly well the combination of chronic ill health, big medical bills to get out of the ill health after I'd been messed about by the great British medical profession and left to rot unnecessarily for many years and then, just when I was getting back on my feet, the media overblown credit crunch thing that caused all my clients to pull their contracts even though they had the money. They just didn't want to be seen to spend it. I was working in the Events business when the crunch hit.
I lived on nothing, took anything I can get to pay the medical bills and know a lot more about it that any of you do thanks.

Also you try being single in London and you see where the money goes. It costs me over £200 a month just to get to work (1 1/2 hours each way on top of a nine hour day) and the fares are going up again and so's the VAT.

The monthly tax on 40K (3,333 per month) is £880. Then there's the council Tax, the gas, the electric, the water (£33 per month), the TV (it doesn't work but if you don't have a license they'll harass you till the end of time) the rent - shared ownership = little mortgage but don't forget the rent that goes up every year. Food, yet, cutting back on that, pity I'm only 7 1/2 stone to start will but can still cut back there. You want a good laugh? Hope you're chocking with mirth.

Yeah, I took thought that earning 40K would solve all my problems but after nine months in this nightmare job they are all still there and I don't see what the point the point of any of it is. I just want to die and have it all stop.

Next you'll tell me to take in a lodger/rent out - Can't - shared ownership - get caught = lose your home. Not entirely stupid you know? Have been working on it.

I'm not sure how this is relevant to finding a good loan/credit card deal though but thank you for your nasty input. Please go and troll elsewhere unless you actually have anything helpful to contribute.

How, may I ask, did you get into debt? I don't have a plasma screen, X box, or playstation anywhere. Come to tea and check.

ViolaLass

I bemused that you included me in your list of posters that you were replying to in your, shall we say, less than polite post. I didn't criticise you for getting into debt in the first place, just pointed out that you ought to have a lot more money each month to throw at your debt.

And don't give me the 'it's so hard being single in London' line. I've done it too and I was on half your salary with £700 left over each month.

I'm not sure how this is relevant to finding a good loan/credit card deal though

It doesn't directly but if you gave us a full statement of affairs, detailing where you spend each month, we could (probably) help you save more, which would mean you could pay your debts off more quickly (which is surely good news whether or not you manage to get the other loan).

How, may I ask, did you get into debt?

For what it's worth - and I don't see how the question was relevant - I'm not in any debt and have never been.

You want a good laugh?

Actually, I want to help and if you would give us some concrete details, I could. I know it's not nice to be told that you have to spend less - I never enjoy hearing it from myself - but that doesn't mean it's being said to laugh or poke fun at you.

anyusernameleft

Here's a concrete detail. Virgin are charging me so much interest that even though I haven't used the card in 10 months and have paid the minimum charges every month the interest charged is either the same as or more than the payment meaning the amount owed continues to rise, That is the bit I want help with.

How much I spend on medicine to be able to work is frankly none of your business and I have tracked down the cheapest sources. Thank you.

The nitty gritty is I have £400 a month to spend on sorting out my debts but I don't see bunging it to Richard Branson so he can buy yet another island as the best use of it.

Emmzi

look, can you stop being so angry at people who are just trying to help? If you don't want to answer the questions then don't answer but stop having a pop. I haven't seen anyone say anything out of malice. People genuinely want to see you get out of this mess!

But just because you don't like the answers being offered doesn't mean they won't work!

Your situation as best I can glean

- in debt due to illness/ inability to work, no major assets held
- current debt excluding mortgage over 50% of gross income
- ability to repay over minimum payments on cards minimal
- some equity in shared ownership house
- cannot rent out property/ take lodger

Options
1. re-finance at lower interest rates. Can't see if happening on the evidence presented. May be wrong but that also seems to be the minority view. As a former bank manager, I wouldn't - you are too high a risk - you may get lucky but you'll have to apply for stuff to find out

2. sell, release equity, clear debt, rent, start over. You seem keen to "keep your foot on the housing ladder" while having no actual net equity and not liking a) cost of living in London and b) your HA. This doesn't make sense to me but if it does to you, you need to accept you are *choosing* to sacrifice debt repayment to maintain this choice

3. earn more or spend less. You are unwilling to post an SOA to see if people can help reduce spending.

4. Go down the IVA/ DMP route.


5. Bank of mum and dad, although if this was an option you may have done it already

There is nothing else that I can think of. You seem intelligent, you tell us you have assessed the options - so other than venting your spleen what on earth are you looking for, and why are you having a pop instead of ignoring people like a rational person on the internet does?

mel12

Sometimes lenders will freeze interest if you're on a DMP - may be worth calling one of the debt charities to discuss your options?

anyusernameleft

Emmzi thanks. If you read the first post you'll see I'm looking for a reasonably priced loan.

Well you see I'm not at all a bad risk to the lenders, I'm a cash cow. They make megabucks out of me. I've always paid off everything I've ever borrowed. On time. If I wasn't paying extortionate interest rates I wouldn't have a problem, I'd be happily paying everything off. The banks would be less happy. They are ecstatic now because they are totally rooking me and as things stand I can never, never get ahead.

And the weird thing is that everyone here seems to think 30% interest is normal when the bank base rate is what? 1/2 a percent or something? All I'm trying to do is find a decent interest rate and everyone here is treating me like I'm insane. Frankly it's stressful.

You know what? This whole thing is designed by the banks to screw us out of every last penny and no one is fighting it at all. It's really weird.

I have income, I want to pay off my debts, but no one can do it at 30%. Why am I stupid to try and get out of this?

What in the world is a DMP? And if it involves losing my home I'd rather just sell up and emigrate. I have about 150K of capitol, I just can't get it without selling my home because I'm shared ownership.

ViolaLass

So sell. It's by far the easiest and best solution available to you. It would only bring your capitAl down to £127k, which, given that you live 1.5 hours from where you work and therefore presumably not central London, is plenty for a deposit on a new place when you're back on your feet.

If you need so much money for medical fees, then there is an argument for not having so much of your money tied up.

Posters have not been saying that 30% is reasonable or making any comment on the interest rate - it's only the likelihood of you getting more credit that we've been looking at.

Emmzi

ok, you are confusing risk with remuneration. they are two different aspects of lending.

you make the "should I lend and how much?" decision based primarily on risk. Is thgere an acceptable chance someone in this position will pay back this amount? When you got your card limits I expect (but am not sure) that the market was more bouyant, joibs were more plentiful, so credit was more available. The risk profile of the country has changed. Employment is less secure. More people are defaulting. That is why re-borrowing will be tough - no one will take you on as a new risk, although your current lenders are stuck with you.

you then make a second decision based on the income you require against the level of risk based on the number of people who historically have defaulted on loans with the same income/ asset/ lending profile.

So while YOU may be a cash cow, your peer group must contain a large number of defaukters. Sorry about that but it's just how it is. You are paying for their defaulting.

You are not stupid to try and get out of it but I think you are being unrealiustic and need to look at your options other than lower interest refinancing.

A DMP (debt management plan) will trash your credit rating but you'd be able to keep your house most likely.

150k equity - 40k debt = 110k deposit for new property in London. That doesn't seem impossible to me. Or if you have somewhere nice to emigrate to, why not go for it? London does not seem so lucky for you.

anyusernameleft

I don't want more credit, I want sensible debt consolidation. Why is being resentful of being charged 30% interest a crime here? Are you ALL ex bank managers?

I work in Surbiton, believe me my current scenario is cheaper than trying to rent a studio flat anywhere round there.
I don't want to sell and live in a rathole, I lived in a rathole until I was 35. I would honest rather die and in my case that's not too hard, I just have to stop trying.