Close to debt problems, need help please.

Hi,

I am currently owing about £5,000 to Egg Credit Card, £4,000 to IF credit card, a few hundred to HFC comercial finance and around £900 to First Direct Credit Card.

I have a mortgage for around £50,000 on a house worth around £85,000 - 95,000 (prices are around £92,000 on average here).

My monthly outgoings are starting to be a problem. I am paying Egg about £100 per month, IF about £65 per month, HFC £35 per month and FD about £29 per month and it's affecting me because I am starting to go over drawn more and more each month.

Before I get in to trouble I want out of this situation, but I cannot afford to pay back my cards just like that.

I earn £22,500 per year.

My credit rating isn't good either. I have 2 CCJs on my record, one of which is satisfied but I need to have them change this to show this on my record. The other is not satisfied. I may also have the odd late payment here and there, but I have never missed a payment on my mortgage.

I spoke to my current mortgage lender (Abbey National) about remortgaging for a better rate and chucking my debt from my cards etc. on top of my mortgage so I could free up some monthly cash and at least be comfortable again. While I appreciate this will take a while to pay off, it's not much different to how long my cards will take to pay off at the moment.

Unfortunately Abbey refused my application because of the CCJs of my record. (this was abot 6 months or so back)

I would now like to get an excellent deal with First Direct (my bank) that would reduce my mortgage payments by about £30 per month and also reduce my card payments to about £55 per month for them all, but I have the worry about my CCJs and not good history plus I am not sure if this is the best thing to do?

I am looking for advice / help because I want to take care of all this now before the problem gets any worse.

Any help and advice is very much appreciated.

Thanks

Cashcow.

Comments

  • cashcow_4
    cashcow_4 Posts: 55 Forumite
    Just to update this, I just checked my credit report at Equifax and it appears there aren't any CCJs registered against me.

    Looking at my old record, I did have one, not two, registered against me from 2001 which I paid. How come this has been removed from my record? (not complaining though).

    Could this be a mistake on Equifax's part or would it show up with Experian and not equifax?

    I still have a few defaults showing though, will these be an issue?

    Thanks
  • mattp_3
    mattp_3 Posts: 270 Forumite
    hmmm, strange that the CCJ's are not showing, there is no feasible reason why they should have been removed early - they would simply be marked as satisfied??

    Experian and Equifax can sometimes have slightly different data, but generally they share information.

    Defaults may be taken into consideration by prospective mortgage lenders, but all lenders have different credit scoring criteria so it is very hard to say.

    I wouldn't recommend that you go down the remortgage route just yet, as it is never a good financial move to secure an unsecured debt on your home - you would be much better keeping it unsecured but sourcing a loan over a longer period so that the monthly payments are low - there are some good rates available - check the loans forum pages for more info on current deals.
  • Cashcow,

    Have you prepared a detailed budget yet? If so and you are happy to do so, post us the details and I'm sure some of us can suggest ways of cutting your monthly outgoings.

    With earnings of £22.5k you should be able to cope with £229 debt repayments per month if you avoid spending too much on "stuff" which you probably don't really need.

    downandout!
  • Hi Cashcow - congratulations on making a start to sort this out.

    Ditto what downandout said PLUS start NOW keeping a spending diary to see exactly what "stuff" your money is going on. It is a very enlighening process and you can quite quickly see patterns emerging that you can change (eg lunchtime spending - pop, snacks, sandwiches, magazines etc - used to be where my "leak" was - so now I make it my business to spend nowt!). You might surprise yourself.

    Stella xx
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276
    Combo Breaker First Post
    Forumite
    You will only get an "excellent" deal if you have an excellent credit record.

    Have you checked your record with Experian too?
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • cashcow_4
    cashcow_4 Posts: 55 Forumite
    Have you checked your record with Experian too?
    Just ordered it.

    I think as this is a personal check they won't show on my record to lenders, is that the case?
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