Help...is this the way to go???

s-l-h

Hi, I am new to this forum so hope I am posting to the right bit..I have posted twice, first time I think in a reply...???!!!

Ok...I have 5 credit cards ranging from 6.9% and 38% apr, plus a loan, all together totalling approx £30,000. Apart from the loan which I am repaying, most of the cards are all minimum payments barring one.

My outgoings are more than my incomings so I am struggling to meet the payments each month, getting further into debt.

I have been in touch with a debt helpline and they have suggested a consoladation loan rather than a IVA for various reasons.

They said they will speak with my creditors (for both the loan and all the c/cards) and get the interest frozen and said I can pay just £350 per month (cutting my payments from £800) and I will pay the total off in 8 years 7 months. I would also have the option of overpaying if I have the extra funds available. Total repayments based on £350 per month will be approx £36,000 (approx £6000 interest 2.9%apr to the debt company over the 8.7 years) however 17% was mentioned...dont quite understand apr's, which is why I am posting this query...

Is this the way to go...I know credit cards will take years and years to pay off especially at minimum payments so 8.7 years seems good, however, this seems just too good to be true, should I just keep juggling my credit cards to 0% apr's and also pay off the loan as I am doing now or is this option that they are offering credible? All they want is £70 one off admin charge plus the first installment of £350 and all my creditors details etc to get the ball rolling...
Surely there has to be some negatives to this??? I just really need to get out of this spiralling situation.

The debt company also suggested that after the debt is totally cleared, I would have to try and improve my credit rating, they suggested a Martin Lewis c/card...spend ie £10 per month and clear it each month to vastly improve my rating...however, I cant find anything on this website about martin lewis' credit card...!

Please advise if possible Any help is soooooo welcome!

Tixy

Hi and welcome.

Sounds like they might be suggesting a DMP rather than a consolidation loan. As they mention getting the interest frozen, if it were a consolidation loan then they wouldn't be asking the creditors to freeze interest as they'd have been paid off.
On a DMP you still owe the creditors but you pay the DMP company and they pay the money on to creditors each month (minus their fee).

If it is a DMP a couple of things to be aware of - they cannot guarantee interest will be frozen they can only ask the creditor to (often they will but they don't always). It will make your credit file a lot worse as it is usual for your creditors to issue you a default as you are paying less than the minimum payment. And finally if it is a DMP you can get the same service from one of the charities for free.

Before you make a decision I would definitely get some advice from one of the debt charities, which is free and impartial and of course won't commit you to anything IMPORTANT - Where to seek professional impartial advice about your debts.

No such thing as a martin lewis credit card I'm afraid. One of the recommended ways to improve your credit can be to get a subprime card (eg vanquis, aqua) and spend and clear each month, that said if you are thinking of entering a DMP (either with a charity or anywhere else) then you are not allowed to take out further credit until the debts are cleared.

Finally (sorry for the long reply) one of the other things we often recommend is completing and posting up a statement of affairs so people can see if they can come up with any other suggestions, eg getting things cheaper, saving money, cutting back etc that makes it easier to meet your debt repayments - we use this calculator if you would like some suggestions - http://www.makesenseofcards.com/soacalc.html

NeverAgain_2

I find the OP's confusion over IVA or consolidation loan worrying, seems to me he/she is ripe for being tucked into an unsuitable solution.

s-i-h,

Could you post the name and number of the debt helpline you've contacted?

Plenty of people on here will be able to tell you if they are reliable or not.

turbo.jet

I don't know the answers to your questions but I know helpful advice from others will follow shortly. I am replying for two reasons. One is so that I can subscribe to the thread, and the other is to congratulate you on taking the first step at getting in control of things and recognising the need to stop the spiral.

I wish you all the very best in your debt-free journey. I know you can (and hopefully will) get lots of helpful advice and encouragement on this site.

Good luck!

dancingfairy

Hmm - to say your post is ringing alarm bells would be an understatement. A consolidation loan - who's going to lend you more money right now? Are they looking to give you another loan on top of what you owe? Sounds very dodgy to me.
And a Martin Lewis credit card - no way. Sorry but they are talking rubbish. I wonder if Martin knows he is apparently supporting a credit card :eek::eek::eek:.
They sound very, very dodgy and I would steer well clear of this company.
df

s-l-h

Thanks for the advise, I am still so confused as to what to do...
The company that I have been talking with is DFH Financial Solutions. I dont have their number to hand but believe they are based in Manchester.

It all seems so easy how they tell it...but I have been online all day trying to get help but no real answers.

In regards to another reply, it isnt a loan I would be taking out, they say they will 'freeze' the interest by negotiating with all the debtors and the £350 I will be paying each month will be distributed to all of them after they have taken their commission of course.

Thanks, any more suggestions on who I can call for this service free from interest or charges....pleeeeeease! x

I have

NeverAgain wrote: »

I find the OP's confusion over IVA or consolidation loan worrying, seems to me he/she is ripe for being tucked into an unsuitable solution.

s-i-h,

Could you post the name and number of the debt helpline you've contacted?

Plenty of people on here will be able to tell you if they are reliable or not.

mwddrwg

Get in touch with CCCS the debt charity who will do all this for free

backinbusiness

DO NOT PAY ANYONE FOR THIS SERVICE

contact cccs as above

NeverAgain_2

...The company that I have been talking with is DFH Financial Solutions...

Here's the link if anyone with more experience of these companies than me would care to take a look:

http://www.dfh.co.uk/

fatbelly

s-l-h wrote: »

Thanks for the advise, I am still so confused as to what to do...

Tixy posted two links. Contact someone from the first link and post your statement of affairs here using the second.

s-l-h

THANKS FOR THE INFO, NOT SURE IF I HAVE DONE THIS RIGHT...ITS SO CONFUSING ON HERE...THOUGHT I'D BE GETTING USED TO IT NOW...!

fatbelly wrote: »

Tixy posted two links. Contact someone from the first link and post your statement of affairs here using the second.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1100
Partners monthly income after tax....... 1400
Benefits................................ 0
Other income............................ 81
Total monthly income.................... 2581
Monthly Expense Details
Mortgage................................ 650
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 10
Council tax............................. 137
Electricity............................. 85
Gas..................................... 70
Oil..................................... 0
Water rates............................. 27
Telephone (land line)................... 15
Mobile phone............................ 55
TV Licence.............................. 12
Satellite/Cable TV...................... 50
Internet Services....................... 20
Groceries etc. ......................... 480
Clothing................................ 50
Petrol/diesel........................... 50
Road tax................................ 20
Car Insurance........................... 30
Car maintenance (including MOT)......... 10
Car parking............................. 10
Other travel............................ 0
Childcare/nursery....................... 100
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 18
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 30
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 20
Entertainment........................... 100
Holiday................................. 125
Emergency fund.......................... 0
Total monthly expenses.................. 2234

Assets
Cash.................................... 0
House value (Gross)..................... 185000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 186000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 175000...(650)......3.9
Total secured & HP debts...... 175000....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
loan...........................12000.....273.......8.9
c/card.........................800.......40........38
c/c............................700.......35........38
c/c............................2000......60........18
c/c............................3000......95........18
c/c............................5700......120.......6.9
c/c............................6500......125.......18.1
Total unsecured debts..........30700.....748.......-

Monthly Budget Summary
Total monthly income.................... 2,581
Expenses (including HP & secured debts). 2,234
Available for debt repayments........... 347
Monthly UNsecured debt repayments....... 748
Amount short for making debt repayments. -401
Personal Balance Sheet Summary
Total assets (things you own)........... 186,000
Total HP & Secured debt................. -175,000
Total Unsecured debt.................... -30,700
Net Assets.............................. -19,700
Created using the SOA calculator at