Why am I not being allowed to consolidate my debts?

Superbiatch

sirwilliam wrote: »

I'm just worried a DMP will completely screw me over in terms of securing future credit (e.g. a mortgage once my current jointly-owned property is sold in a couple of years). Aren't DMPs incredibly damaging for one's future prospects? I have gone through the CCCS website and it suggests a DMP, but I'm worried about going down this road in terms of landing up with CCJs and black marks all over my records. I co-own my property with a friend who is unaware of my financial issues and I am also worried about them finding out. My family also doesn't know and I'm also deeply worried about their reaction to the size of debts I have racked up...

Yes, you will receive defaults most likely and not be able to gain credit for the following 6 years. But it sounds as though you are running out of options and no bank will touch you unless you earn double what you want to borrow these days, looking at the loans forum on here.

camuk81

Sir William, just look at the above post I put in, the apr on a 6k loan in 29.9% apr

william2074

eyeopener2 wrote: »

Follow the advice above. The last thing you want to do is consolidate, it doesnt work and you will end up in a worse position in 18 months time. Just have a look around this forum to see the stories of where it leads.

You need to address the payday loans first and come to a payment arangement with them, which isnt the easiest of tasks but possible, that should give you some breathing space to look at why you are overspending so much.

You should post a Statement of Affairs on here so you can be given guidance on the way forward, where to cut your expenditure and show a way out.

E2

Am I being really naive here? I have looked at £20k loans at around 13-14% over even 5 years that would save me a huge amount every month in repayments. I know the overall cost of the debt is high, but I am due a large salary increase and rising commission through my work, so am confident about future income. I was OK with the circa £400 per month (out of £2k net monthly income) but it's the payday loans that have done for me. If I can get my repayments back to around £400-450 per month (surely achievable for a loan in the £20-25k bracket), I should have enough to live on and not have to worry so much.

rising_from_the_ashes

Consolidation is not the answer ....... you are extremely unlikely to get a loan large enough to cover all your oustanding debts and, as has been pointed out, as there is no way for the banks to make sure you don't run up the debts again, they are very unlikely to lend such a large sum for this reason.

Why have the debts occurred? Unless you address these issues then they are likely to happen again ... and if you've consolidated, this is where things get really messy.

Post a SOA http://www.makesenseofcards.com/soacalc.html with your income and all your outgoings / debts and we'll be able to offer some advice on how you may be able to progress.

camuk81

Payday loans are still looked on very badly by lenders, in the future if you continue to use them then lenders will not lend to you.

I appreciate you you are anticipating a salary increase. Trust me I was with my new job and didnt get it. I was gutted. You can't bank on something that may happen.

Let's start with first painful step by looking at a statement of affairs and work out what's going on. The only I got out of a payday loans brooding spiral was reducing the amount I was borrowing each much to make sure I knew I was going to take it down, but still this first month combined with Christmas has killed me and it's going to take a lot of hard work not spending on anything at all!

As regards the extra debt natwest will see it as external debt to them and therefore extra debt. I'm going to take a guess and reckon the credit card is with them too and due to the fact you want to use the loan to reduce the other debts and not the credit card they will want to see you reduce the credit card only with this loan.

Let's get back to the beginning. Why did you take out the payday loans, how long ago did this start, why are you still borrowing. Having worked in banking a few years ago this is the same thing the bank will ask you.

Do you know exactly where all your money is going.

I.e. how much is going on your loans, credit cards and payday loans.

If you do the statement of affairs you will be in a better position to speak to the bank manager, it also has to be taken on now and not future increases. If they did this I would have really in a mess as I have a huge sum of money stuck in 3 properties overseas and I can't do anything till the market clears up a bit!

mo786uk

To give you the flip side, I managed to consolidate (12k) at a young age (24) and managed to keep repaying without spunking all my money away again.

It took a lot of pressure of having to pay 5-6 different cards. And even if it did cost mroe it was worth it for the reduced hassle/stress.

I cans ee why the bank wouldnt wnat to risk it though. And 20k is a lot of money.

rising_from_the_ashes

mo786uk wrote: »

To give you the flip side, I managed to consolidate (12k) at a young age (24) and managed to keep repaying without spunking all my money away again.

Congratulations Mo, well done (I've tried it and failed - several times)

Only 15% of people who consolidate who manage not to run up more debts :eek:

camuk81

Sir William, will have a look in two minutes but let me just say well done, I am imaging you had no intentions of doing this when you logged on the afternoon and you have just taken a massive step realising a) the problem b) taking action.

We may all sound very harsh but achieve your dream of having a mortgage we need to help you knuckle down

william2074

SOA takes into account half in terms of shared property (half value, half mortgage and half payments). Sale of flat is not an option for at least the next two years.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1932
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1932

Monthly Expense Details
Mortgage................................ 550
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 136
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 0
Mobile phone............................ 5
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 160
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 80
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 10
Life assurance ......................... 42
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 16
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1089


Assets
Cash.................................... 0
House value (Gross)..................... 220000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 200
Total Assets............................ 220200


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 130000...(550)......3.27
Total secured & HP debts...... 130000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Coop loan......................6980......195.......8.9
Natwest loan...................3924......104.......9.9
Natwest loan...................2119......92........9.9
Natwest credit card............1600......35........19.9
Toothfairy Fin'c loan..........400.......100.......0
QuickQuid loan.................500.......100.......0
Payday Express loan............350.......100.......0
PDUK loan......................400.......130.......0
Wonga loan.....................1200......1200......0
Natwest overdraft..............2600......0.........0
Natwest loan...................1984......58........9.9
Total unsecured debts..........22057.....2114......-


Monthly Budget Summary
Total monthly income.................... 1,932
Expenses (including HP & secured debts). 1,089
Available for debt repayments........... 843
Monthly UNsecured debt repayments....... 2,114
Amount short for making debt repayments. -1,271

Personal Balance Sheet Summary
Total assets (things you own)........... 220,200
Total HP & Secured debt................. -130,000
Total Unsecured debt.................... -22,057
Net Assets.............................. 68,143

william2074

...I've also been tasked with heading up a new subsidiary within my (employers') company. I will effectively be MD and receive substantial commission (equivalent to 15% of revenue). This business isn't a pipe dream and has just been started with full company backing and the first few trading months' income already exceeded. My projected commission under a conservative scenario for year 1 is over £5,000, year 2 is over £16,000 and year 3 is over £26,000. I know it's still 'projected', but I've already netted £1,200 of year 1's commission in month 1! This isn't yet in my own account and is going to be paid either quarterly or annually as a 'bonus' essentially...