Consolidate unsecued debts with mortgage?

tamsyn_2

We're behind with payments on 4 out of 6 credit cards and 2 unsecured loans.
Our mortgage is with Abbey and they will consolidate our debts and redo our mortgage for us (capped rate of 6.5% atm).

Should we do this? Or should we just remortgage and write to our creditors to freeze interest and pay off what we can each month.

My husband is a postman earning £240 a week (take home). I am self-employed and do not earn atm. We get £40-94 ctc a week (1 child age 3 no childcare) and £66 cb a month.

We do not have much spare money and we also have a £2400 overdraft with Abbey. We constantly have bounced dds which result in charges.

Any suggestion? (We meet with mortgage advisor at 12pm on sat)

Tamsyn

jen_jen_2

i think you will need to ask yourself some more questions, what will the new monthly payment be and is it affordable, when you remortgage or consolidate and secure the debt you put your home at risk if you cant afford the payments.

more importantly people who consolidate often end up in debt again, they carry on using the credit cards etc. do you know why you miss payments and are overdrawn, have you done a budget and managed to stick to it, will you change the behaviour that may have caused the debt? if your circumstances change, interest rates increase or income goes down are you going to be flexible enough to afford the new payments?

Securing debt isnt necessarily a bad thing if it will mean you can afford the payments remember the added interest over a longer term may be more expensive than freezing the interest and paying it off.

you need to think about what will work for you, all the stress and worry is an important factor too. (easier said than done I know)

Xbigman

If you keep bouncing DD's, that can become horrendously expensive very quickly. Try to cancel all your DD's bar the mortgage and pay in cash where possible. If you are looking to pay off your debts in general try posting your details (outgoings / debts / APR's, etc) and many on this board will offer advice.
If its really bad you should seek advice from one of the free debt services.
Regards



X

Debt_Free_Chick

If you put your CC debt on the mortgage, you are potentially putting your house on the line for the sake of a few bits of "stuff" that you put on the cards.

If you don't put the CC debt on the mortgage, then the CC companies can't touch your house.

However, you must "play ball" with them. You must send them your budget showing how much you can afford to pay, in total, and then you offer each one a pro-rata payment - but only an amount you can actually afford. There's full details on doing this in the Self Help Pack here

http://www.nationaldebtline.co.uk/england_factsheets/debt_advice_england_wales.php3#3

If you want to post your budget here, we can make suggestions of areas where you can cut back and get more out of your current income.