Consolidate or tackle creditors individually?

Kolokial

I know I've been asking a lot lately and have yet to contribute, but I'm kindly asking if anyone can offer advice regarding two choices I'm considering.

Option A
Write to all creditors and put forward the amounts below to each and trying to negotiate or freeze interest. How likely is this? My mother has not contacted most of the creditors who are for the most part DCAs, for a long time, as she was passed from Baines and Ernst to Harrington Brooks who instructed her not to.

Presumably to keep good relations and help the case I would need to show a creditor how much I'm paying the others?

[B]
Creditors		 Debt	% Total Debt	£ of £150[/B]
Vanquis			150	2%		£ 3.27
Provident PC		1434.82	21%		£ 31.29
Greenwood PC		1216.86	18%		£ 26.54
Shopacheck		0	0%		£ 0.00
Shopacheck		1014.59	15%		£ 22.13
Shopacheck		603.12	9%		£ 13.15
Ambrose & Wilson	797.17	12%		£ 17.39
Halifax			350.56	5%		£ 7.65
Three Mobile		570.57	8%		£ 12.44
Capital One		296.63	4%		£ 6.47
Three Mobile		443.31	6%		£ 9.67
			[B]6877.63	100%		£ 150.00[/B]

These are all outstanding debts. There are currently two mortgage payments being made for the house. (Don't ask me how that occurred I'm still trying to work it out myself.)

Option B
Take out a loan from another company (Don't worry I'm doing the research as you read) and use that to pay off all of the other debts. Obviously I'll be aiming for the lowest interest possible over a short period, but I'm unsure if that will work as the amount available to pay is as you can see above only £150 a month at the moment.

Also, here's a copy of the spreadsheet I'm using, it's not on the same scale as Martins, but is short and sweet. Feel free to edit and change.

http://!!!!!!!/17aHmfL - I'm not sure if the national insurance and tax are right, but from my comparisons it seems to over estimate it. I need to work on it more.

Thanks in advance guys!

gb12345

Kolokial wrote: »

Write to all creditors and put forward the amounts below to each and trying to negotiate or freeze interest. How likely is this? My mother has not contacted most of the creditors who are for the most part DCAs, for a long time, as she was passed from Baines and Ernst to Harrington Brooks who instructed her not to.

Is your mother currently paying anything to these creditors and if not when did she last pay them?

Kolokial wrote: »

Take out a loan from another company

With the amount of loan required and the existing debt, your mother would need a salary of at least £27k to have a chance of being considered for a loan. Add to that the fact that, I would assume that as the debts are with DCAs, her credit history is likely to be a total mess then she is unlikely to to get a good rate and could end up with a higher APR than the debts she is paying off.

cynicalgit_2

You haven't mentioned your own circumstances.
I'd be tempted to try and scrape together the funds to at least get rid of the smaller debts.

paddyrg

What are the interest rates?

You're unlikely to get a consolidation loan, or one at a price to be cost effective.

As a general approach, it is a good thing to pay the minimum amounts towards each debt and all the surplus towards the highest APR's to reduce interest overall, however in your case I'd be inclined to get rid of some of the smaller scrappy debts first. Reason being, maintaining those accounts is a massive pain. Each time you write a cheque and post it off, you add overhead, so reducing the number of creditors might make things simpler to manage

Most importantly of all - BLOCK YOURSELF from ALL further credit until you've paid this lot off completely. Phone PAYG only. Cut up credit cards. Don't even consider ANY credit, get this lot clear.

Kolokial

Is your mother currently paying anything to these creditors and if not when did she last pay them?

It varies, some creditors received a payment two months ago, other creditors received a payment two years ago.

Gb12345 & paddyrg, no consolidation loan then?

I don't know any of the APRs, but based on what little paperwork I have, I am relatively sure more than half of the creditors are no longer charging interest. But now that it's been mentioned I will find this out asap.

Most importantly of all - BLOCK YOURSELF from ALL further credit until you've paid this lot off completely. Phone PAYG only. Cut up credit cards. Don't even consider ANY credit, get this lot clear.

Will do, however, I have another question regarding that which I think will need a new thread.

Oh yea, Peterkelly from Harrington Brooks has decided to PM me on this forum.

Tixy

As these are old defaulted debts then it doesn't seem likely that a consolidation loan would be a sensible option. Especially if many are not charging interest currently.

You could either look to make repayment offers and do a self-managed DMP (useful info on national debtline website or NE Derbyshire CAB) or you could contact one of the debt advice charities for advice on the situation or for them to manage a DMP on your behalf.

Kolokial wrote: »

Oh yea, Peterkelly from Harrington Brooks has decided to PM me on this forum.

If this was trying to sell you any services then please use the report button on the bottom of the PM to alert the MSE team.

gb12345

Kolokial wrote: »

It varies, some creditors received a payment two months ago, other creditors received a payment two years ago.

None of them are going to be Statute Barred for quite a while then, so you won't be doing any damage contacting them and asking for further details of the debt.

Kolokial wrote: »

Gb12345 & paddyrg, no consolidation loan then?

I don't know any of the APRs, but based on what little paperwork I have, I am relatively sure more than half of the creditors are no longer charging interest. But now that it's been mentioned I will find this out asap.

A consolidation loan is out of the question with the state her credit history must be in - I doubt if even the bottom feeding lenders would offer her anything.

What might be worth a try (particularly with the smaller debts) is to offer them some money in full and final settlement. The DCAs will have likely bought the debts for pennies in the pound, so the opportunity to get 40 or 50% of the outstanding debt repaid might appeal more to them than getting a few quid each month.

Tixy wrote: »

If this was trying to sell you any services then please use the report button on the bottom of the PM to alert the MSE team.

I would report him even if he's not trying to sell something, the money grabbing ambulance chaser won't be an authorised representative so the Forum Team will ban him for that.

Tixy

gb12345 wrote: »

I would report him even if he's not trying to sell something, the money grabbing ambulance chaser won't be an authorised representative so the Forum Team will ban him for that.

Indeed. I wonder how many other new posters he has pm'd in the last 2.5years?
Maybe MSE could add the 'beware of advice by PM' warning to the sign up procedure