help needed consolidate debts

barrossa

Hi all,
Cut a long tail short my wife and I have an overdraft with the Halifax ( now stands at £3200 ) and they are hammering us with charges of £80 a month, and Santander charged us £300 on a £500 overdraft which we didn't know about ( long tail ).
this all seem to begin when we bought a repossession home and moved in and rented our old home. We basically racked up a few debts on cards and overdrafts but with still with a good income we are getting charged fortunes all over the place.
Both properties have nearly 50% of the equity still tied up in them and our old home has a really good family in renting and want to be there for as long as possible. The property makes roughly about a 12% yield.
My wife has a good steady job and I'm unfortunately on Incapacity Benefit due to to a long term illness. The one big main problem problem was with an MBNA card we took out sometime ago. When we bought a property 2 years ago ( which we later sold on ) the lenders would only just borrow us enough to buy the property but not to renovate, then we uncovered some nasty building secrets that had to be dealt with like , plastering , heating , wood rot, etc.... so we had no choice but use this card.
we always paid an amount but when we got in a bit of trouble we agreed a monthly fee then out the blue a company contacted us and said they had taken the debt over from MBNA and i was to deal with them not MBNA which shocked us considering we thought we had struck a deal with MBNA !!! .
Th MBNA, Halifax and Santander overdraft has crucified us our credit rating so even a visit to the Nationwide asking to help (we have a mortgage with in the home we are living in) will not touch us due to our poor credit rating.
We have a good income with the wife's earnings, tax credit + working tax credit, my Incapacity Benefit, and rent from our old home, alot more than is going out but with cards and overdrafts.

Basically , we have a £10,500 unsecured loan with the Halifax which is regularly paid and never miss a payment and around £6500 worth of overdraft and card debt that we desperatly would love to consolidate but how and were is another matter so advise is badly needed.

Should we try to consolidate all £16,500 or leave the Halifax loan and just try to clear off the £6500 ?.
Please help as it's driving us mad.
thanks all.

P.S. i might point out that the MBNA card is in my name only not my wife's but i was told today that the overdraft at the Halifax ( joint account) will have put paid to my wife's credit rating , is this right ??.

paulmapp8306

On the last point - pretty much yeh. As you have a joint account, you are financially linked, and as such any search on your wife will also (by default) include one on you, with the results being applied to her as well.

Your arrangement with MBNA was a short term agreement. Normally these run for 6 months, after which point the original agreement is re-introduced, or more likely sold on. FWIW once its sold on, the charges should be much less though - they bought the outstanding ammount and (AFAIK) interest/charges arnt generally added once the debts are sold. Firms buying debts are much more likely to help as well (ie freezing interest if not already done, and agreeing a longer term repayment plan) BUT they will want a SOA showing what you can afford.

Niv

I think you are best off, filling out an SOA so the folks around here have a clearer picture to advise you. With respect to consolidation, it would depend on your (in your case probably your wifes) income and current debt. You are unlikely to be able to get another loan to pay off your other debts if the new loan added to your existing debts is ~50% of income. The general apinion on these boards tends to be, work on paying off your debts rather than getting more debt to pay old debts off. Hence why I suggest the SOA.

Niv

barrossa

Niv wrote: »

The general apinion on these boards tends to be, work on paying off your debts rather than getting more debt to pay old debts off. Niv

thanks for the advise, we are trying our best to clear off the debt's but when we are been charged £80 a month by your own bank then its very hard.
As a family , we have made all the necessary financial cutbacks and sacrifices , and no more cutbacks are possible. I would say bad luck rather than bad management has put us in this position but this means jack nothing to a bank.

paulmapp8306

if you cant meet the payments, then you should be able to get interest/charges frozen or reduced. It will mean providing a SOA to show you cant afford the payemtns though. You may get a "short term" reduction or payment holiday without one though. Speak to your banks "debt line" (most have them) rather than someone at a branch though as their specialists in these matters.



If you CAN afford them - no matter how tight it makes things - then you wont get a reduction of any sort.

The only way of paying debts off with loans, is on a 0% card - but not all cards will allow overdrafts to be transfered so check first.

barrossa

paulmapp8306 wrote: »

if you cant meet the payments, then you should be able to get interest/charges frozen or reduced. It will mean providing a SOA to show you cant afford the payemtns though. You may get a "short term" reduction or payment holiday without one though. Speak to your banks "debt line" (most have them) rather than someone at a branch though as their specialists in these matters.



If you CAN afford them - no matter how tight it makes things - then you wont get a reduction of any sort.

The only way of paying debts off with loans, is on a 0% card - but not all cards will allow overdrafts to be transfered so check first.

I have a 0% barclay card , we have paid this regular and now the card will let us transfer £700 over , 0% till march 2013 which will give us some breathing space only problem it won't allow us to transfer some of the overdraft balance (just tried ) , is there away round this like pay mortgage on a card as a one off payment on my 2nd card and transfer that over ?. This would bring us down under the barrier and save us £50 a month for now which is a starter.

paulmapp8306

You could put £700 worth of purchase on your 2nd card then transfer it - but I think youll find that transfer from credit cards onto you 0% one will mean having to close that 2nd card account. If you can live doing that - then yeh its an option.

You need to look into what they will allow you to transfer from - and what the rules are with regards those accounts post transfer.

How much is on the 0% card at present?