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where to now?

edited 30 November -1 at 1:00AM in Loans
7 replies 1.3K views
homealone_2homealone_2 Forumite
2K posts
edited 30 November -1 at 1:00AM in Loans
i have only been married a year and yet inherited many forms of my husbands debt. i have carried out a credit report as i have recently been refused a loan and a credit card. it says i have a score of 692 and has red stars allover a loan my husband took out with his ex. he should be paying 400 a month on a 12500 loan over 60 months but after a few payments broke up with her, lost job etc etc so contacted them and they have apparently frozen the interest and he is now paying 141 a month. it is obvious that the way forward to restoring our credit would be to start paying the full amount without any defaults. however we have a 10,000 loan that we are paying and have 23,000 owing in credit cards. we both have normal jobs earing about 30,000 between us. i have used the 11,000 pound i had in savings paying of some of the more ridiculous loans he had at 32% but am now all cleared out. i have also done what i learned on here and shuffled the cc debt around to lower charging rate banks but the amount we owe is obviously still the same. somehow we do seem to manage but are worrying over this 12,500 loan he has. he is talking about declaring himself bankrupt as he is so worried that by taking on that debt too, we will both go under. he is so embarrased and upset over destroying the exceptional record that i had that i cant moan at him even more and at the end of the day it is done now. what i now need is all your expertise to give as much advice as possible. between you all you seemed to have answered many problems on here and i just hope mine is not surmountable. i was also hoping martin himself may take a look at my dilema and offer some suggestions. thank you for reading and hope to hear from you soon


  • SpendlessSpendless Forumite
    21.3K posts
    Part of the Furniture 10,000 Posts Name Dropper
    you start by mentioning about being turned down for a cc and loan. Was that just to transfer debt into paying lower interest rates or because you were trying to borrow more money?
    If first - fair enough - if second I'm tempted to say don't go trying to borrow your way out of a prob by getting more debt .
    Do you own your own house? If going bankrupt wouldn't this run the risk of loosing your home?

    Have you tried to get outside help - NOT one of those places that advertise on tv, somewhere like Citizens Advice .

    I'm sure someone else can come up with better solutions than I have.
    Best of luck sorting it out and let us know how you get on.
  • yes it was to switch to a lower interest rate, not to borrow more. we live in a rented accommadtion through a housing association. no, i havent contacted anyone official to help yet, guess because i was able to manage with the rest and it was just this other loan i was worried about i guess i didnt think i needed to but am reading their website now, so thanks maybe i do need more help than i thought
  • RafterRafter Forumite
    3.8K posts
    As spendless says you should really go talk to someone independent.

    Citizens advice or a charity such as

    From what you say you seem to have total debts of £45,000 none of which are secured on property.

    Declaring yourselves bankrupt would clear all these debts but would prevent you from getting most forms of credit (including a mortgage) for many years.

    You have to decide realistically whether you can repay what you owe over a reasonable timescale.

    Do you have any other assets you could sell to try and reduce the debt? Get a cheaper/smaller car for example?

    In the meantime I strongly suggest you cut up all your credit cards and start living on current income. You could also try to negotiate with your current credit card companies to repay a certain amount per month at a lower interest rate.

    Regarding your husbands loan, even if you managed to pay the full £400 per month, it will take several months for your credit record to improve.

    Good luck though, but please go and get some independent advice. I'm no expert and these are just my thoughts about your options.

    Smile :), it makes people wonder what you have been up to.
  • Debt_Free_ChickDebt_Free_Chick Forumite
    13.3K posts
    Think very carefully about bankruptcy, if you own your home - even if it has a mortgage. As part of the bankruptcy, you can be forced to sell your home to release any equity to pay off your debts.

    This website has lots of information about managing debts, dealing with creditors and bankruptcy. It's a charity and all the information is free. There's also a telephone helpline

    Have you fully analysed all your finances? Do you know exactly where all your money goes every month? Look at all your bills and see what can be trimmed - utilities, telephone, food. Ditch unnecessary expenses like gym membership, 2nd car etc.

    Look for ways of earning more - could one of you take a second job?

    Clear out your house and sell stuff on ebay.

    You need to cut your expenses and live well below your means to generate surplus and use this to pay off the debts. It will be tough, but better than bankruptcy.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Debt_Free_ChickDebt_Free_Chick Forumite
    13.3K posts
    Sorry about previous post - just read that you rent your house. Still visit the National Debtline website - it's very interesting and I think you'll find it helpful.

    If you have no assets i.e. nothing you own that's particularly valuable or important to you, then bankruptcy could be worth considering. Under the new rules, you can be discharged after only 12 months. It still needs careful consideration and is unlikely to appeal to homeowners, but if you have no assets i.e. nothing for them to take from you, then you should get more advice and decide if it's for you.

    There's plenty of help, free and confidential, from people who've dealt with very many situations like yours. You are not alone but you do need help through this.

    Think about speaking to the National Debtline or CCCS as has been advised.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Robert_Sterling_3Robert_Sterling_3 Forumite
    7.1K posts
    Get advice from the C.A.B.
    ...............................I have put my clock back....... Kcolc ym
  • Edinburghlass_2Edinburghlass_2 Forumite
    32.7K posts
    10,000 Posts Combo Breaker
    Homealone you posted about this problem a month ago and got the same answers then. Obviously since then you have worked out exactly how much your debt is but how much more have you spent?

    You are living beyond your means from reading all your posts as unpalatable as that may sound and there is certainly no magic cure for that other than sitting down and doing what Martin suggests and thats budgeting.

    That means going back to basics as to what you need and what you want, two different things when you don't have the money and are using credit cards. You need to work out how much per month you can pay towards each credit card debt, some 20 cards you mention in another post, and which card has the highest interest rate.

    CAB or CCCA will help you with this if you actually take the step to seek the help. Next cut up all those credit cards and stop spending on them. Start reading some of the threads where people have actually turned round their debt problems as you will find plenty of inspiration there.
    Stop reading the boards here with "great" offers on, if you can't afford to pay cash for something you can't afford to buy it. Martin has often mentioned when on the tele start with the supermarket shopping by buying the "value" products, yes some of them are very good, some not so but you will soon work that out. Enthuse the family with bargain hunting for Christmas, I have done a lot of my shopping already at 1/2 price.

    I am sorry if this seems a harsh post but its not enough to post here, have people take the time to reply then a month later still be looking for that magic wand, even Martin doesn't have one!

    Good luck.
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