Please help me - Don't know where else to go?

Pixie983

I am in £28,000 of debt and don't know what to do.
2 years ago I took out a Secured loan with First Plus for £20,000 (to pay off car loan, credit cards, overdraft etc). I can't remember why I took the secured loan as I have a good credit rating - I think I was under the impression that as it was such a large amount a secured loan was my only option (now I know that was not the case as unsecured loans are available upto £25000).

The loan with First Plus was over 14 years with payments of around £250 a month (this has gone up and down slightly with the rate changes). I foolishly took the PPI as they sold it as a kind of savings plan where if I didn't claim on it for 5 years I would receive the full amount back in the form of a cheque (around £4,500 I think?)
So now, 2 years down the line and I am in another £9000 of debt on 3 credit cards and an overdraft. I REALLY want to try & get out of this mess and I don't want to be paying it off for an eternity!

Trying to pay 3 credit card payments a month as well as my loan payment is getting me into more trouble as I don't have enough money left to live on therefore I'm going round in circles and spending on my credit cards even for essentials like fuel in my car. I earn £29,000 a year and I have a company car so don't pay any car tax/insurance etc. After tax my take home pay each month is £1,550 - £800 of this goes straight into joint account to cover mortgage/bills/food etc which leaves me with £750. Then my First Plus loan payment is £250 and I'd say another £150-200 on payments for my 3 credit cards (minimum payments). Also my phone bill is around £40 a month which leaves me roughly with £250 to live on which is just not enough and why I'm going round in circles.

A few months ago I got a settlement figure from First Plus which was around £18,000. So, I am thinking do I either take out an unsecured loan for maximum amount of £25000 (if I can get it) and keep the rest on a 0% credit card. Or do I keep the loan with First Plus for another 3 years and get the PPI cashback and take out an unsecured loan for £9,000 over say 7 years then at least it's only 1 other payment on top of my loan rather than four?

Thanks for reading this - ANY help would be appreciated. I called the National Debtline yesterday but it seems they (and other similar places) only help people who can't make their repayments. I can make my payments no problem but they are not getting me out of this mess I am in.

tealady

Hi why don't you put a full SOA then we can possibly advise you further. It may be better to squeeze your budget and start clearing your debts bit by bit.

standupguy

I would be taking a closer look at the ppi on your secured loan.

I have never heard of a scheme where you can take ppi out for 5 years and if you do not claim you get it all back?

Have you got this in writing?

Selling you ppi was not fair as the loan period was for 14 years and ppi is only applicable for 5 years?

If this has been mis-old you may have a claim for getting it back?

Even if it was not mis-sold you still have an option to cancel it and get your payments lowered?

Pixie983

Hi - Thanks for replies.

I need to check the documentation from First Plus to make sure it is legit - if it is I am thinking of keeping the loan until the 5 years is up so at least I can get the cashback from them.

Today I have transferred all of the £9000 of credit card/overdraft debt onto my MBNA credit card which is 0% on balance transfers until March 2009. I hope I have done the right thing? This way I'm not paying any interest so whatever I can pay off each month (at least the amount I was paying combined for 3 credit cards) will be reducing my balance. I thought it would be better than getting a loan and I feel a huge relief already.

I am going to put a full SOA on here as soon as I can as I still need help on cutting back to ensure I can survive without the credit cards!

Thanks again!

Merlot

SOA is needed, but please do not think of consolidating yet, it rarely works, we can advise you once we see your soa.

Merlot.x.

Cleosmum

If you reclaim the PPI then you will get the money back anyway, you wont have to wait the 5 years then.

Make sure you cancel your overdraft and cut up the cards/close the accounts you have transferred from, you dont want to be using them and getting into more of a pickle.

Post up a full SOA, I am sure there will be plenty of advice and suggestions given

Pixie983

Hi - just a quick question - do I need to get a template from somewhere to post my SOA or can I just put it on here as I have written it all down? (sorry I'm new to all this!)

Also in response to the comment about reclaiming the First Plus PPI - am I not better off keeping it just incase anything did happen? - I wouldn't want to end up losing my house because I cancelled it. Saying that my current employer pays 6 months full sick pay then 1/2 thereafter and if there were redundancy's I'd get quite a good package. I think I'd just be worried that if the worst came to the absolute worst I could lose my house with this loan. Any suggestions? :rolleyes:

Pixie983

I have just found my First Plus PPI policy document and can't find any section on there about 'money back', however I have just been onto their website and under Insurance have found the following:

"plus you could get your money back

FIRSTPLUS could pay you back an amount equivalent to half of your insurance premium, if within the first 5 years of your loan, you haven't:

• settled your loan
• cancelled your insurance policy
• been behind in your repayments
• made a successful claim"

Also I've spotted underneath this:

How much does it cost?
We calculate the cost of your insurance as a percentage of your loan. It’s then added to the amount you borrow and included in your monthly repayments, you will be charged interest on this at the same rate as your loan.


Am I paying way over the odds here anyway? They are charging interest on the loan amount and then on the PPI amount aswell? :mad: If I did want to claim back do I even have a valid claim?

jenevieve

There is a template but if you've already got it written down, bung it on and people can see where they can advise help.
Good move on moving your CC debt to the 0% card - that will save you lots in interest.

Dee123_2

Hi there Pixie,

Sorry you are under so much pressure - you've probably realised the people on this site are wonderful and will be able to help you enormously with all the knowledge and experience they have.

I'd like to ask, though, if it isn't too nosy, why your takehome pay is only £1550? It should be around £1818 on a salary of £29000. Do you not receive any pence per mile if you also have a company car?

Best wishes

Pixie983

Ok - so here's my SOA - I hope I've done this right?

Monthly income (after Tax/NI) deductions - £1600

Monthly Outgoings:
Joint account.......................... 800
First Plus loan.........................250
Gym membership....................29 (cancelled - last payment this month)
C/card / O/draft payments.......230
Mobile Phone..........................40-60
Diesel......................................100+
Cigarettes................................120
Lunch/snacks...........................40
Magazines...............................10
Nights out................................50
Clothes....................................50+
Beauty Treatments....................32
Beaty Products.........................30+
Takeaways...............................30
Eating out..................................30-50
DVD subscription......................4
Savings acct..............................20
TOTAL....................................£1865.00

I am spending way more than I earn here......

Yearly Outgoings
Days Out..............................100
Holidays...............................1000
Christmas..............................300
Birthdays...............................250
Flights (to see family).............50-100
TOTAL.................................£1700

DEBTS
First Plus loan (Secured).............20,000 (total repayable 36,000) includes PPI.
This was 2 years ago - I think current
settlement figure is around £18,000.
C/card (unsecured).....................9,700 (just consolidated on 0% until March 2009)
TOTAL.....................................£27,700

SAVINGS
Shares.................................600
Savings account...................300
TOTAL..............................£900

I am in a sharesave scheme at work where they take the money out of my monthly salary (before it is paid to me) this equates to £125 a month. I have 2 years left on one and 3 years on the other. This is a guarantee of at least total amount saved at the end of the scheme (more if the share price is up).

ASSETTS
House Value...............155-160000
Mortgage.....................146000

Sorry if I've done this all wrong!!

N.B - my salary is due to go up by around £100 next month - also after consolidating my c/cards onto the 0% I will be trying to pay 100-150 a month off this which will be less than I currently pay to various lenders.

Any help will be appreciated - thank you