Drowning In debt!

Tinkerbe11_2

Hi,
Sorry if this is in the wrong place but basically looking for any advice on how we can reduce our debts. Have posted in ask a debt advisor bit too!
Sorry if this is long and complicated but looking for some advice on how to best consolidate mine and my partner’s debts. Combined we owe just under £15000 on credit cards and the repayments are taking a really large part of our income although we are managing (just about) to meet them but paying little over the minimum every month. We own our property and are currently just paying the interest on our mortgage which is with Northern Rock (now NRAM who no longer have a loaning license so can’t increase the mortgage or whatever). Our credit rating really isn’t great and we have been turned down for a personal loan with Halifax. I have looked at getting a secure loan but Ocean Finance refused us, as the amount we’d need to borrow (£15000) as it would mean it takes us up to more or less 100% of the value of our property. They did refer us to various other loan companies but I’m a bit reluctant to use them. One of the other issues I think we may have is that on paper it looks as if we have far less income then we actually do, as I am in full time employment but my partner is a stay at home dad, however we do get an extra £800 a month, every month, from his mum but I doubt that any loan company would actually recognise this as additional income so when they are looking at the figures we probably look like we wouldn’t meet the repayments. Any advice on a way to consolidate our debts and lower our repayments without further damaging our credit rating by getting refused again and again!?

sickasachip13

Hi Tinkerbell,

I don't have expert advice I'm afraid but most people here, and the debt counsellors, would advise against taking out further borrowing to deal with debt. It could be a good idea to seek some professional advice - it may be that you could need to go onto a Debt Management Plan (DMP) for example. I'd suggest doing CCCS's (they are a debt charity) debt remedy tool on their website :

http://www.cccs.co.uk/?WT.srch=1&WT.mc_id=200001&gclid=CKKd36DK0awCFVBTfAodYnOQNA

All the best.

mrsb83_2

It's very unlikely that you'd be able to get another loan given your income and circumstances.

Many here discourage consolidation loans for most people because they don't address the issue of overspending and can be a disaster.

If you post your Statement of Affairs (link at the top of the forum) then people will suggest ways in which you can spend less monthly.

My favourite tool is the snowball calculator (again link at the top). Once you have identified some savings, see how quickly that extra money can help you reduce your debt.

Good luck.

foxgloves

Try not to be tempted into consolidation loans. We consolidated 3 times when we had debts, each time borrowing a little bit more. While monthly payments reduced a bit, the length of time paying them off increased & the key thing was that we carried on with exactly the same behaviour which caused the debts in the first place....that well-known combination of overspending while consistently failing to budget. Snowballing debts is usually better. Look really carefully at what expenses you can cut. Just stick to the essentials....it's amazing how many things we try & convince ourselves are 'essential' but when we cut them out & chuck all the money saved at the debts & see them going down, that's a great feeling. For us, learning the difference between 'wants' & 'needs' has been important, but the most important thing of all was learning to budget & sticking to it. Best of luck with it all.