Debt problem advice.

MattX_2

Hi, I'm new here and posting more out of desperation than anything else, any advice at all from anyone that has been in a similar situation or anyone with knowledge would be greatly appreciated.!

I'm struggling with debt having ignored it in the past to be given more and more and I have been very naive in building up a substantial amount.

I have backed myself into a corner and can't seem to find a way out and today was unable to obtain a £40,000 unsecured loan today to consolidate my debt despite having excellent credit and never having a late nor missing payment.

Here is a breakdown of the debt;

Card 1 - £11,136
Card 2 - £4,972
Card 3 -£1,100
Card 4 - £3,400
Overdraft - £2,837
Bank Loan - £14,472

Before any payments at all to my creditors I have £500 monthly outgoings (I live with parents) and earn £1600 a month after tax.

Today I have contacted a company called gopher money who say that a debt management plan is the best way forwards and gave me some estimates stating that their partner company Harrington Brooks would manage the debt and said I could pay one monthly payment of £500 towards all of my debts, of which Harrington Brooks would take £88 as their fee and put the rest towards my debt. They stated interest would be frozen along with charges & that the debt would be paid off in a maximum of 82 months. Currently I pay £152 interest a month on the bank loan alone so this seemed like a good deal and they are sending me a pack out in the post to fill in. They took my debit card details for the first payment but assured me this wouldn't be taken until there was an agreement in place.

Is this my only option or are there other options available, currently the payments I make are leaving me with little to live on & holding me back on moving on with life.!

Thanks for reading, thanks in advance for any advice.

Matt.

ellesbellesxxx

Hi Matt,
well done for realising something needs to be done. A consolidation loan is not a good idea - but a DMp is. however, you can do this without fees = 88 extra a month to pay towards debts! CCCS is a good one?

moreover, http://www.makesenseofcards.com/soacalc.html will show us exactly what your outgoings are and interest rates etc so people can give you the best advice possible. Good luck!

MattX_2

Thank you for your reply, I'm unable to do much with the website link you gave me for now as I am at work and using my phone. Thanks for the advice on CCCS I did not realise a DMP was available for free that would be much preferred, do they provide a similar service then? I'll have to look into that tomorrow.

ktez

Hello matt. Yes as far as I know, the CCCS do exactly the same job but they are a charity so their service will cost you nothing. I've just made the initial contact with them and they have been very helpful. Good luck.

MattX_2

Thanks for the further reply ktez I'm going to contact them tomorrow as I have a few days off and want to make a dent in the legwork before then to start getting this sorted out. It's been a long time coming for me to kick myself and sort this out but I'm determined now.

Do you guys think I should cancel the debit card of which I gave details to Gopher Money?

ktez

Yes def contact the CCCS tomorrow. I went online and completed one of their state of affairs tools, submitted it and then they sent me the necessary paperwork. I called them today with a few queries and they were really helpful. There is a dmp thread here which you should take a look at - it is good to read other ppls experience.
With regard gopher money, i would call them and advise that you no longer require their services and that you wish for them to dispose of your details and any debit card information. I'm sure they will try to talk you into not leaving!!!

MattX_2

I'll get right on that tomorrow don't want to be ripped of jus want to pay back what I owe without any IVA or Bankrupcy involvement. I guess DMP will probably be my best method so that I can also live at the same time as paying debts off, and hopefully won't adversely affect my mortgage prospects when I'm ready.

ktez

Sorry i forgot link to dmp thread so here goes https://forums.moneysavingexpert.com/discussion/3723081. Hope that works....
Unfortunately there are downsides to having the dmp however I have weighed these up against my life as it is now and I feel that it is the correct decision for me. It is not something that you should go into lightly as there are repercussions such as affecting chances of getting a mortgage in the future however this all depends on how long it will take you to clear your debt and when you will require mortgage.

Bravehearted_2

Contact a debt charity.

Sorry but you do not have an execellent credit rating and stand no chance of a loan with those levels of debt relative to your income.

Gimpsdad

If you earn £1600, and have outgoings of £500, that leaves you a disposable income of £1100? Notwithstanding that we all have expenses that sometimes we don't even realise are there, it takes a very creative mind to trim down to £500 from £1100.

Absolutely ring CCCS today, it is always a good idea to take 2 or 3 opinions before you make a decision, whichever way it is that you end up going, but I do suspect that CCCS may produce a slightly more realistic financial statement, so your monthly payment may be more. On the plus side that will see you debt free quicker though. On the negative side, you may not actually be eligible for help, if your D.I. is greater than your contractual payments then you cannot argue that you are struggling, you just need to make changes in your budget.

DS4215

How much are you paying per month for each debt and what are the interest rates? - You might be better paying the minimum off each CC and then putting any surplus/remainder onto one of the debts to try and clear it off. Once that is cleared you can snowball it onto the next debt in line until all are cleared off. It will take some time, but if you don't qualify for a DMP its the next best option.

If you go onto a DMP then you will get defaults which stay on your record for six years and will affect your ability to get credit (including mortgages) over that time.