Why am I not being allowed to consolidate my debts?

Mort

sirwilliam wrote: »

but I need advice on how to talk to family and friends about my debts. How has anyone else on here approached them? What did you say and how did you say it? What were reactions like? I'm quite terrified of doing this, but it overall is beginning to seem like the most sensible and rational option all round.
Thanks

This is not a cop out answer but it really does depend upon the person(s) you are talking to. My parents were separated. I told them individually one in person one over the phone. We told the kids in person and explained what it meant for them - no more school trips or expensive gadgets. We told the parents in-law together in person and then brought in the wifes sister and her husband.

My mum paid for our food shopping for the rest of the month, her initial reaction was neutral.
My dad, after calling me some pretty blunt names, sent up some money which covered my travel to work expenses.
The parents-in-laws initial reaction was to tell us that they would not pay of the debt, we had not asked them to. After that they were very good at helping us sort out our budget information for the DMC.
The kids pretty much took it on the chin

camuk81

Really good news for you about the overdraft bad on the lending. I would be open and honest with them.

I got into a right old mess with my husband and the conversation opened as to why. I'd been unemployed for 6 months I know you never revealed the reasons but explain you know the mistake now and this has come as a rude wake up. Go with a few figures in mind. If its an older person or someone savy about money they like this.

Set a realistic time frame to pay it all of. You'll need £2850 for the loans, ask for over 12 months that gives you a repayment of £237.50 which should be well within your means.

In the mean time have a look at some of the suggestions made i.e. spending diaries or cutting back on a few things. It would be a great boost to pay back what you owed early.

BlushingRose

I'm not sure taking out more credit in the form of a credit card is the most sensible option.

AlyBaly

Morning sirwilliam,

Sorry to hear the bank would not help but I guess we all thought that was going to be the answer. I told my mum about our problem and she was horrified. She offered to bail us out but I could not accept that. I felt I had got myself into the mess and the only way to learn was get myself back out it. I cried a lot and after my mum got over the initial shock , she was a great support.
We went down the trust deed route(IVA in England )and yes our credit rating is shot to bits but I never want credit again so it doesn't really matter.
My reaction is to say don't take out more loans to pay for current debt but you have to do what is best for you.
I hope that whatever you decide to do it all works out for you. keep us posted

meer53

Hi Sir William. It's good to hear you approached Natwest and that you've made a start on sorting things out. I can't believe though that they have advised against a DMP. It really is your decision whether to go down this route, and i think the fact that they said they wouldn't get rid of you because you make them too much money is appalling ! If i ever said that to a customer i'd be in deep you know what ! Prepare yourself by opening a basic bank account somewhere else for when they pull the plug. Now they are aware that you are struggling, you might find that they aren't quite so sympathetic if you don't manage to sort things out.

Your credit file is not going to be brilliant anyway due to the amount and type of borrowing you have so i wouldn't worry too much about it for now.

I don't think the credit card idea will work as i can't see anyone offering you a card at the moment. If you can sort something out with friends and family that would obviously be your best option but you will have to be really strict with repaying them, are you sure you can do it ? There are lots of threads on the forum about people who loaned money to help out and haven't been paid back. I'm not saying you would do this but if it were me, i'd use this as a last resort.

You never know whats around the corner, you say your job is safe, i really hope it is, but as others have said, in reality, no-ones job is guaranteed in this day and age.

findingmyownway

Well done for starting to face reality sirwilliam, you really are in the best place here.

Could you elaborate on the property you have with your friend. You say you can't sell this for 2-3 years? Is there a way your friend could buy you out? Based on the values you give it seems to be worth circa £440k which is a lot of money. I am surprised you have such a high value house at 26 on an average income - how did all of this come about, and is there any way you can release some money?

Secondly, have you sat down and thought about where all the debt has come from? What have you spent the money on, do you have more sale-able assets than you first thought?

If you can go down your list of debts and rememeber where the money went, it is a useful exercise. If you can't remember then this is telling in itself, and it makes it more likely you are simply 'living beyond your means' by small amounts/purchases very often, rather than buying expensive cars/horses etc. Understanding this is key to getting out of the payday loan trap and debt in general. For example, are your clothing/entertainment values in your SOA really true?

Good luck, I hope you stick around

peteuk

SirWilliam

Having been on a DMP for 6 years now, I am sure I know why the bank have advised against it. Your earning them money, the first thing the CCCS told me to do was open a new account and get paid into it. THis way I was not losing half my wage on an overdraft.

I personally would not trust the bank when they say they will not cancel your overdraft, regardless of what they say now, even they cant vouch for the future. Especially if you go over the OD.

Debt to pay off debt does not work (its been said on here so many times) so I am hoping that you might see this. With all the best will in the world, I said time after time we would not get into debt again. Thats how we ended up with a 25K consolidation loan, and another 20K of debt.

If you have this great job, which will keep paying you and your bank want to keep you because you earn them too much, and you have outstanding debt with other lenders I would really consider forgetting your credit rating and going for a DPM. Speak to the CCCS for advice and then make an informed decission. What have you to loss, it might mean you do have to go cap in hand to family and friends. Even on a DMP my credit score isnt that effected, as most of the debts are getting regualar payments, I have one default notice (not a debt on the DMP - but from a mobile phone that O2 say I owe them on)

If you do ask friends to help out, then be very careful, because as much as you might call them friends, if they lend you money and then see you out and about, socialising or buying stuff then they will ask questions.

Hope you manage to get things sorted.

Pete

Pantera_Fan

sirwilliam wrote: »

...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...

Before going down the DMP route I would check to see if this would effect your job. I doubt your employers would consider someone on a DMP with a load of defaults as 'fit for purpose' to do an MD job.

Mort

Pantera_Fan wrote: »

Before going down the DMP route I would check to see if this would effect your job. I doubt your employers would consider someone on a DMP with a load of defaults as 'fit for purpose' to do an MD job.

This is a good point over the course of our DMP I had to inform 5 senior managers of my circumstances. It was embarrassing and I am still not in a position of financial responsibility.

debbie_debt

Sirwilliam you really have got yourself into a mess haven't you? I'm currently managing a similar amount of debt, but since it's mainly on 0% I'm making good headway with £950 a month going into it, whereas you need much more as it stands and I can see how you're thinking a consolidation loan is your best option. I tried to get one a year ago and failed miserably too - banks just don't want to touch anyone who might be near their 'debt ceiling' (which is how it was explained to me - if your debt is anywhere near your current wage you're in trouble and they won't consolidate). This is a horrible situation to be in and I really can sympathise.

You've a few options as I see it:

1. The most obvious but the most hurtful - a debt management plan. I can tell you're not keen and I can see why.
2. Owning up to family and friends and see if anyone's willing to help. Again, not attractive, I know. Personally, I didn't go for this option either due to dumb pride mainly. I get the feeling you're a similar type of person. Although this is certainly the cheapest type of debt to have usually, so if you can swallow your pride and go cap in hand to the bank of mum and dad, then do it.
3. How's your credit rating? Have you managed to pay everyone on time so far? If you don't think you're credit rating's taking too much of a beating then it'd be worth trying for a credit card to pay off the payday loans. Although you might get offered a card at 25.9%, it'd still work out more managable month-to-month than your payday loans and give you some breathing space.

I know none of those were magic wand solutions, but it's the best I can suggest. Good luck.

Debbie