Debt Advice

jazzyjustlaw

My other half did have £17,000 worth of debt he has been plodding away at reducing it and it has gone down to £16,000.

However, the bank rang this morning asking him to refinance via a loan. He has done this twice before. They cleared his overdraft and credit cards and yes you guessed it the overdraft gets built up and so does the CC. So last time he refinanced it cost him £550 per month at about 8.5% approx. (he has 20 months left) Now they have asked for £650.00 per month at 7.5% approx over 4 years. I am also worried about the fact that the last time he refinanced he asked them to withdraw the overdraft they did this and then reinstated it a few months later. He is not good with money whereas I am. He thinks the above is the best option and I said gosh imagine what we could do with a spare £650.00 per month. I said that he needs to look at this budget but his attitude is he has no money so there is no point.

Please can people assist me in helping him sort out his finances please as he does get charged sometimes from his bank for defaulting.

jonesMUFCforever

Since that Real story on BBC1 banks have taken a lot of critiscm over lending to people who could not afford it.
Now customers should have to go through an affordabilty assessment to see whether the new lending should be advanced. If your bank plays by the rules it should ,do this with him ,and it may help him to get rid of the debts once and for all BUT the o/d should be cancelled and not reinstated for a minimum of 12 months and the credit card should be formally closed down by the bank (by taking a formal letter to authorise this and cutting it up in front of you) and he should NOT reapply for new ones however tempting this may be.
Eric

Xbigman

If he has managed to reduce his debts by 1k and has 20 months to go with his current loan then he would be mad to refinance. I suspect the bank has not *asked* him to refinance but has *offered* to let him refinance to keep their claws in him. If he can afford his current repayments then avoid.
Regards



X

marshall_2

My girlfriend has refinaced constantly over the last few years, which has built her total debt up to £23,000!!!! (7.5 years left to pay). This all started with a graduate loan when she left uni about 8 years ago and then every time she was low on cash, the bank were only too happy to 'help' her pay off the current loan with a slightly larger one. She's not very good with money but now she's finally admitted the extent of her debts I've tried to help her do all I can to reduce them (using this site as inspiration). By taking off the loan payment protection (& getting separate cover elsewhere) we've reduced the total payable from £31,000 to £23,000. However, we've budgeted really tightly and cut back on tons of stuff and she still just about breaks even each month by a quid or two (but there's no margin for emergencies/clothes etc and her parents have given her all they can afford to pay off her overdraft). Having tried CAB and various companies who supposedly do IVA's, we can see no way of sorting this out. All the IVA companies seem to only want to know if your debt is with certain companies (not HSBC who her loan is with) and if you have 3 creditors or more (foolishly, in hindsight, we scraped up what little we could to pay off a few small debts so this no longer applies!!!) It seems that these companies will only offer help if you're reckless enough to get yourself to the stage where you fall behind with everything and have the debt collectors on the doorstep. She is up to date with everything but has ABSOLUTELY no cash at all after her expenses. Neither of us earn even the national average wage so we're in a bit of a quandry really...anyone got any ideas?!?!? The siuation doesn't seem quite extreme enough for bankruptcy (& we don't want our likelihood of getting a (decent) mortgage to be affected - should house prices ever get to the stage where we could, in a few years, look at buying instead of throwing money away on rent each month). HHEEEEEEEEELLLPPPP!!!!!

ffs

Yes Marshall, there is an answer, it's called a DMP. The only major criteria is that your gf must have at least £300 of income she can use per month after all living expenses to make payments to creditors. If so then the CCCS will negotiate everything on her behalf. It will entail a lengthy commitment, up to six and a half years in your gf's case, depending on the monthly payment.

Even if she doesn't have that much per month she may well be able to set up a DMP herself, without the CCCS managing it. They will be able to advise and supply sample letters to use in negotiating. This is exactly what my ex has done.

homersimpson_3

what is a dmp?

Turning_into_scrooge

!!!!!! wrote:

Yes Marshall, there is an answer, it's called a DMP. The only major criteria is that your gf must have at least £300 of income she can use per month after all living expenses to make payments to creditors. If so then the CCCS will negotiate everything on her behalf. It will entail a lengthy commitment, up to six and a half years in your gf's case, depending on the monthly payment.

Even if she doesn't have that much per month she may well be able to set up a DMP herself, without the CCCS managing it. They will be able to advise and supply sample letters to use in negotiating. This is exactly what my ex has done.

If you are saying here that a client need to have £300 of income after they have paid all their living expenses for a debt management plan then you are incorrect. My original debt management plan was £273, it has now been increased, my original debt was 34k there was no thoughts at the time of taking out the dmp to increase it either. I do know someone who is on a DMP with cccs which is whom i am with, their amount to their creditors is less then £200 per month.

Turning_into_scrooge

homersimpson wrote:

what is a dmp?

Debt Management Plan. Have a look at
https://www.nationaldebtline.co.uk

there are info packs that you can download to read which will explain dmp's for you. They will also sort out a dmp for you free of charge as well.

https://www.cccs.co.uk

I went with cccs simply because they had been recommended to me and also because they ansered the phone quicker :eek: but they are both as good as each other

Jolinar

!!!!!! wrote:

Yes Marshall, there is an answer, it's called a DMP. The only major criteria is that your gf must have at least £300 of income she can use per month after all living expenses to make payments to creditors.

This is simply untrue, there is no minimum amount when you go through CCCS in the beginning I was paying a lot less than £300! It's Payplan ask that you have a minimum of £100.

Be very wary of refinancing loans from the bank. My OH got one through and in the small print it was a secured loan taken out against either the house or his car. It seems the financial institutions are in a flap about potential defaulters right now.

ffs

The CCCS policy I mentioned was in place about about 18 months ago, apologies for giving out of date information.

marshall_2

Thanks to you all!

None of the companies we've spoken to so far (or CAB) have ever mentioned a DMP!

My girlfriend actually got in touch with CCCS a few weeks ago and has a telephone interview scheduled with them next week (they're pretty busy, apparently!). I'll make sure she asks about a DMP.

I assume that those of you who have gone through CCCS are happy with the results/service?