Consolidation Catch 22?

rupe4073

YorkshireBoy wrote: »

Any particular reason why you don't apply for a card yourself and transfer some of her debt to your card?

Well we thought of that but because I am associated it seems I cannot borrow either (I applied for a loan some time ago and was refused - but then this could be for another reason - being self employed perhaps - although my credit report seems clean). May be worth a try though, if I could get a CC with 0% for 12 months it would certainly save us something, but then again if I transferred some of the debt up to the limit of the new card I would now have a CC up to it's limit (which is a negative on a credit report I gather)......but then what's the point of a clean credit report if you can't get any credit - oh it's doing my head in :mad:
All we are trying to do is refinance our debt so that the money we are currently paying every month clears of more of the debt. We could just carry on paying the CC but it makes no financial sense at all.

rupe4073

Thanks for advice - any other help or thoughts would be appreciated.

CH27

rupe4073 wrote: »

Thanks for advice - any other help or thoughts would be appreciated.

I suggest you post your SOA on the Debtfree Wannabe section & see what people suggest.

CLAPTON

you haven't provided any actual detail here, but probably small incremental change would be your only real option
i.e. try for new CCs with lower APRs than your present ones (hopefully 0%) and transfer whatever credit limits they offer from your highest APR and /or try for small loans- say 5/6 k

fozmcfc

The main reason why consolidation is not normally the answer is most people, end up running up the orginal or part of the original debt up again and end up owing more.

Done it myself, twice, got a loan, paid off cards and other loans, within 6 months to a year, run up the cards again and now have the loan and cards to pay off. A change of circumstance means it's not always possible to avoid.

Many others have done the same, it is all very well having the best intentions, I did the 2 times I took consolidation loans, but circumstances change so quickly. To pay less each month, usually the consolidation loan has to be taken out over a long length of time and believe me 5 - 7 years, may not seem that long, but it most certainly is, particularly when you are banking on no change in circumstance.

I went for a 3rd consolidation loan and was refused, I used it as an indicator to sort myself out and did whatever it took to do just that.

TheLordDave

Just to let you know I am in the same situation and every thread i read about it usually gets the standard.
"You are living beyond your means" response, many people especially in this current climate are in a situation where a previously manageable debt had become a massive burden through no fault of their own.

I am in a situation where i have a fairly well paid job and manage to pay my minimums on my cards but don't have enough spare to actually make any headway after interest.

I too cant get any more cards to do 0% transfers or consolidation loans.

This debt was not run up by being irresponsible and buying flash cars and holidays it was mainly run up trying to survive after both my partner and I lost our jobs a couple of years ago and had to live on credit.This has haunted us for years.

We are now in a situation where i am facing redundancy and my partner is off work without pay with chronic depression, so that barely manageable debt is likely to become unmanageable.

I fully sympathise

Shelldean

Billy-no-Money wrote: »

Check the letter telling you the interest rate is going up - you should be able to 'reject' the rise, on condition that you stop using the card and continue repaying it.

Take a look here: http://www.moneysavingexpert.com/reclaim/credit-card-interest-rate-increases


I did this with Capital One when they increased my rate from 10.8% to 24.9% a couple of years ago - I had it frozen at 10.8 and have been repaying ever since (it's now about a third of the original balance). The same minimum payment rules continue to apply, e.g. for Cap 1 it's 3% of balance I think.

I echo the advice to avoid consolidation if you can - if you're managing the minimum card payments now, and can get the interest rate frozen, carry on making the same payment (i.e. NOT the minimum), and throw any extra cash at the card with the highest interest rate (snowballing).

In case you missed it this ^^^^^ is what you should do to avoid the interest rate hike

Percy1983

TheLordDave wrote: »

Just to let you know I am in the same situation and every thread i read about it usually gets the standard.
"You are living beyond your means" response, many people especially in this current climate are in a situation where a previously manageable debt had become a massive burden through no fault of their own.

I am in a situation where i have a fairly well paid job and manage to pay my minimums on my cards but don't have enough spare to actually make any headway after interest.

I too cant get any more cards to do 0% transfers or consolidation loans.

This debt was not run up by being irresponsible and buying flash cars and holidays it was mainly run up trying to survive after both my partner and I lost our jobs a couple of years ago and had to live on credit.This has haunted us for years.

We are now in a situation where i am facing redundancy and my partner is off work without pay with chronic depression, so that barely manageable debt is likely to become unmanageable.

I fully sympathise

By all means I see you point but to run up debt you are living beyond your means, by all means if you run up debts while unemployed you are living beyond your means at that point in time which is hard to avoid but still a fact.

By all means I found myself in a similar situation a while back and I faced up to the fact I had debt due to years of living beyond my means, now if you situation changes and you can no longer pay the debts, its not because of the situation change but the years of running up the debts in the first place.

On the topic its worth opting out of the interest rate rise for starters, as mentioned apply for a better card and if sucess full transfer as much as you can.

Passed that tie down all finances to pay as much off the cards as you can.

backinbusiness

You might not like this op, and please don't think I'm preaching, 'cos I've been there and done that too.

You ARE living beyond your means if you have relied on credit cards or overdrafts to get you through.

I have had massive debts in the past.

Today - were I to be made unemployed, because I now cut my coat according to my cloth - I would survive - it wouldn't be pretty, or much fun, but I could do it because I wouldn't be servicing any debt. (And I know this because I've worked it out)

The best of luck though, and I do sympathise with your situation.

bib

rupe4073

Some interesting comments here, lots of people seemingly in the same boat. I do, however, not want to get stuck on the 'living beyond our means' theme - we've got the debt, what we want to know is if there is any way we can get a loan to cover what is owed so that we can clear the cards, cut them up, close the accounts (yes, I really mean it, you'll have to trust me on this one) and start paying off the loan. We have worked out that if we accept the interest rate freeze and close the account it will take about 10 years (if we continue what we are paying now every month) to clear it. We have had a quote for the same amount of borrowing in a loan format that would take us about 5 years to pay off. Seems a no-brainer to me. Why can't a lender be persuaded of this common sense idea and that the loan we are applying for is to clear the borrowing shown on our credit report. We don't want to increase the amount of borrowing we have, we just want to restructure it.