advice please how to deal with huge credit card interest

paulus3

thankyou for the info.

Richard1212

Sell the flat .............

theoretica

Something else to think about is whether your business is worth persevering with.  Minimum wage is going up to £11 a hour, which means even a minimum wage job would get more than £20k full time.  Is your business something you could go part time on, and combine with part time employment?  What full time jobs are out there that you feel would be a match for you?

paulus3

thanks for all the info and advice

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ok so based on info so far itseems to me that i might follow the plan below, not certain but seems the best path even though i hate the idea of defaulting.

1) default on the personal and credit card debt which is £30000

2) get a DMP

3) credit card interest should be stopped.

4) use the flat rent over the next 2 years instead of paying interest £1000 per month pay the debt which is £24000

5) incease income through work or extra job or change job to pay off extra £6000

this means in 2 years when my current mortgage stops i would have paid off DMP.

by this time my DMP will be 2years gone + 4 years to go

I have read that even with DMP if paid off i can still remortgage but of course rate will not be as good but at lwast i wont have the debt. Also in say another 2 years i will still have DMP but can get a new mortgage as it is satified.

A) I feel this is the best route over a loan managed with hsbc agreement which reduces interest as even if agreed i still have the marker like a DMP and it starts after i paid off rather than when i default so would be an extra 2 years of havwe DMP

I feel this is the best route over selling the flat as if i sell I would lose over £60000 of property value as flats are not selling at moment and it didnt sell before at this price. I will also lose the £24000 from rent over next 2 years. together this is a loss of £84000.

C) I feel this is the best route over paying off extra bits as this is not sustainable and i am continuing to use my credit to live on monthly basis and i will kiss chance to use the mortgage rent to pay off debt and it will jsut go on interest.

D) i feell this is the best route over getting a loan or balance transfer as as has been said you cant pay off debt with more debt plus i cant get loan or balance transfer anyway.

please let me know any comments on the above as i see no other options....thankyou for all the help so far i will also post statement soon so i can stick to repayments with advice also. If you see nay other options or advice please let me know.

TheAble

Isn't the personal debt £40,000? In your first post you said £35k on CCs and a £5k overdraft.

The rent you receive on your flat - don't you need this to pay the mortgage on it? A £220k mortgage even if currently on a cheap fix must surely eat up most of the rental income. Also you'll need to factor in tenant void periods, repairs and all those other costs.

Also what are your current living arrangements? Do you rent / own with mortgage / own mortgage-free? 

Andyjflet

Hi Mate, that's a huge chunk of debt to have on your shoulders, a few points, check out Dave Ramsey and his baby steps, google and podcasts changed my life from persistent debt to no debt and £60k in the bank....

SELL THE FLAT NOW, there is a list of excuses coming out as to why you cant, so you might lose a few grand on it but you are in real danger of going under and you don't need a DMP, get rid of it and pay off the debt, simple. 

On a side note you're credit score is pointless, I had a credit score of 1000 but once I cleared all my debts, and I mean everything it dropped to 648... lol.... now I am inundated with messages to try to get me to take more debt, what would you rather have? a £3k salary all to yourself every month or paying it all out on day 1 after you get paid, I can sleep at night, believe me the journey is worth it. 

caprikid1

As mentioned do a SOA, you only talk about one income, do you have two of you in the household earning ?

Floss

paulus3 said:

thanks for the replies

i understand what you are saying about the flat but if i get a DMP then surely i can use the 24k of rent over the next 2 years to pay off the debt. plus it saves me losing money on the property by selling it cheaply.

What happens to your plan if your tenants move out?

Floss

paulus3 said:

.. when the 6 years start and ends as i have not defaulted - is the default when the DMP start and is the 6 years from the start of the DMP or the end? sorry to ask all this....

Floss said:

Secondly, if you enter a DMP your credit record will be trashed for 6 years from the date of the last default registered - not for 6 years after you pay it off.

As I posted earlier, the 6 years runs from the date of the last default.

gwynlas

Selling your BTL appears to be your best option and I appreciate that you say you have alredy tried this but failed. Please can you explain further why the flat failed to sell? Most properties will sell at a price that agent suggests otherwise they would go out of business very quickly. Any DMP will ffect your credit rating and as age is not on your side getting a mortgage in the future is likely to be difficult anyway. Are you in an area of the country where you would be eligible for a social tenancy as you appear to have only a modest income?