we remortgaged do we pay debts? newbie by the way!

debtfreerus

Hi, we are looking for any advice really from anybody who can help.....I like to consider myself as quite with it when it comes to finances but have ended up in a bit of a muddle. We started off with a credit card then decided to get another then decided to switch that to another interest free and keep doing that which we did but unfortunatly didnt cut the old ones up so kept using them hence the remortgage..... this is a brief description of our situation.

credit card debt total = 23,000
remortgage cash available = 34,000
home improvement = (whatever is left) hahaha

I have arranged repayments with all of our debters, interest is frozen and we are paying monthly instalments (interest free) so I pay them off in full or put the excess cash in a high interest account and pay off another way? some of our debts carry on until the year 2027 until they are paid in full if we continue with the instalments. I have contacted all of our creditors and arranged a settlement fee which has droped the amount owed by 1700 but ther is still 2 creditors that will not agree a lower settlement figure these 2 add up to 15,000 of the total debt. somebody please help us......... If I havent given enough info just let me know and ill tell you all I really want to know is do I pay them the 15,000 or carry on with the monthly installments and shove the 15,000 in a high interest account (my pocket) and carry on with the installments which are interest free?

Hope to hear from somebody....anybody soon, thanks for reading catherine xxxxxxx

magnolia65

debtfreerus wrote:

Hi, we are looking for any advice really from anybody who can help.....I like to consider myself as quite with it when it comes to finances but have ended up in a bit of a muddle. We started off with a credit card then decided to get another then decided to switch that to another interest free and keep doing that which we did but unfortunatly didnt cut the old ones up so kept using them hence the remortgage..... this is a brief description of our situation.

credit card debt total = 23,000
remortgage cash available = 34,000
home improvement = (whatever is left) hahaha

I have arranged repayments with all of our debters, interest is frozen and we are paying monthly instalments (interest free) so I pay them off in full or put the excess cash in a high interest account and pay off another way? some of our debts carry on until the year 2027 until they are paid in full if we continue with the instalments. I have contacted all of our creditors and arranged a settlement fee which has droped the amount owed by 1700 but ther is still 2 creditors that will not agree a lower settlement figure these 2 add up to 15,000 of the total debt. somebody please help us......... If I havent given enough info just let me know and ill tell you all I really want to know is do I pay them the 15,000 or carry on with the monthly installments and shove the 15,000 in a high interest account (my pocket) and carry on with the installments which are interest free?

Hope to hear from somebody....anybody soon, thanks for reading catherine xxxxxxx

In my own experience I have learnt that I am susceptable to getting into debt and get carried away when I do have a bit of money sitting in the bank and just had to spend it.

If I was in your position in the past I would end up dipping in to that 15k and find it dwindles away.

Not anymore though I would much rather not have the debt and call it a day while I have the chance.

Yes I know where you are coming from when you say about making money on the 15k compaired to interest free credit but you need to sit down and think how strong are you with money still and could you realistically leave it be...Think about how you got that credit card debt in the first place by not leaving the old cards alone. Can you truelly trust yourself? I know I wouldn't be able to and I accept that, that is me and how money makes me tick

Xbigman

Pay off the debts. You have got a reduction on two of them, which is brilliant, but two are holding out. I would now pay them off. I know its tempting to think of your current arrangement as being interest free, but before long they will want updated income and expenditure details. Once they see your circumstances have changed they may put the interest back on. Its not worth the hassle, ditch those debts.

You will then have 11k left over. Do not use it on home improvements, use it to reduce your mortgage. If consolidating is a sin, then over consolidating is darn right evil. Thats 11k less you could owe.
If you want to do your place up then do it up over time with money you have saved up bit by bit. It is more satisfying that way and you do what is really important rather than have an 11k splurge.
My old landlord was a plummer/electrician and he always said that when taking on a job he could tell the difference between those who borrowed the money and those who were spending their own money. The borrowers just splashed the cash to overcome every problem, the savers always stopped and thought about it before arriving at a sensible solution within their means.
Which do you want to be?
Regards



X

earwig

pay of your debts and CLOSE THE ACOUNTS on your credit card otherwise you will use them again and x is right pay the 11 grand of your mortage if the houses market dose go you dont want to be left with neg equity you didnt need use the money you was paying of your debts with to do home improvements with rember if you have to borrow money to do somthing then you cant aford it wait and save untill you can

Johnhowell

debtfreerus,

The usual advise is not to consolidate unsecured debt into secured debts.

If you must remortgage why take out the extra £11k to just pay it back to the mortgage company. Just take out a remortgage for (existing mortgage + £23k), pay off all your debts and start afresh.

Cheers,
John

leni

Pay the debt - not being funny but YOU HAVE used/spent the money on the credit card so why should the company say "oh go on then, only pay us £x amount back!" It's good that your dealing with your debts, but now that you've remortgaged, you CAN affod to pay these debts back - IMO full and final settlements at a reduced costs should only be given if their is no way in hells chance of the company getting the full ammount back from you.

richardvc

Johnhowell wrote:

debtfreerus,

The usual advise is not to consolidate unsecured debt into secured debts.

If you must remortgage why take out the extra £11k to just pay it back to the mortgage company. Just take out a remortgage for (existing mortgage + £23k), pay off all your debts and start afresh.

Cheers,
John

I think this is spot on !!

quantumleap

Consolidating, which is what you've done is not popular with many on these boards. The primary reason being that it is the easy thing to do and that the issues that led to you getting into so much debt have not been addressed.

I don't know if this is the case with you but certainly the suggestion that you are considering not paying 15k of you're debt because it isn't being reduced would set alarm bells ringing with me!

Pay off you're debts, cut up all of you're cards and try to understand what got you into this situation in the first place. Putting the leftover 11k back into you're mortgage would be a good start and would suggest that you are learning.

The concern that most here have I suspect is that you'll not learn and will end up spending much of the money from the remortgage, still have the debt and the higher mortgage and the credit cards. Please don't let this happen.

Good luck.

natlie

Hi
I would pay off the debts and return the £11,000 to my mortgage, you are lucky to have been able to get the money, some people are unable to do this, in the long term you are more likely to improve your finances this way
Nat
xxx

Brassic

debtfreerus wrote:

do I pay them the 15,000 or carry on with the monthly installments and shove the 15,000 in a high interest account (my pocket) and carry on with the installments which are interest free?

<whistles>There may be trouble ahead</whistling>

My first thought when I read the was :eek: There is no way you should take this option as it looks to me very much like you'll just spend it and be even worse off.

Do as the others have said - just get enough to pay off existing debts. You have enough debts. Save for the home improvements - they can wait.

Good Luck!

livinginhope

Surely if the creditors get wind of the fact you have this money they are within their rights to demand payment in full? I would imagine it's in the small print somewhere.
I would pay them off without a doubt and as someone else said,use the rest to reduce your mortgage.
I don't really understand why you need to ask this question,in most cases someone who is worried about their debt would just get rid,the thought of pocketing the money doesn't even enter the head