What to do? Please help x

Lalamama

Hello,

Please help. My husband and I owe money and we just don't know which way to turn.

We have the following debts:

£4800 on an overdraft
£1800 on credit cards
£97 invoice to be paid

We have a mortgage on our property but it is in negative equity to the value of -£10,000.

We are up to date on all payments so have no arrears at the moment and have never been late or missed a payment, but it's only a matter of weeks before we would get to this point.

We have spoken to the national debtline but feel more confused than ever. We are on the cusp of being able to pay the money back without affecting our credit score, or offering to pay certain amounts back each month and it affecting our credit rating.

I have been looking into taking out a loan to pay back over 7 years to clear the debt and I am fairly sure that we can pay back the loan at £114 per month. It will be tight but is possible.

We have completed a detailed and very realistic monthly budget, but my problem comes when we have to pay out for large expenses that we cannot save for, eg. £100 car tax due in June. Should we borrow a little more to cover this expense until we get back on our feet? It would make little difference to the monthly repayments?

Our other alternative is to negotiate with our creditors and be a little more comfortable each month, eg by possibly paying less than the loan would cost (if they agree to it of course). Obviously this would affect our credit rating but does this matter? We have a mortgage at the moment and MAY be in a position to get another mortgage and buy a house within the next 6 years. Would the credit rating affect this?

I look forward to your responses as we are getting pretty desperate and sick with worry. We are opening a new bank account today to protect my husbands salary as I'm aware the bank could just take this to pay off the overdraft.

Many thanks

RAS

Hi

We need to see a proper SOA to provide you with the most useful help.

And also to understand whether you are prepared to live to a tight budget say for 3-6 months whilst you get things turned round and keep your credit rating intact, or are happy to say bye to the credit rating and live a more generous lifestyle?

Tixy

Hi

At the moment I wouldn't consider the consolidation loan, it may be that you would struggle to get the loan anyway. It might be sensible to post up your statement of affairs to see if people can offer some advice specific to your situation. Werecommend this calculator - http://www.makesenseofcards.com/soacalc.html which is in a useful format.