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  • FIRST POST
    • ChocolateLabOwner
    • By ChocolateLabOwner 15th Aug 19, 8:08 PM
    • 10Posts
    • 2Thanks
    ChocolateLabOwner
    In trouble with Debt - Now cannot get a loan
    • #1
    • 15th Aug 19, 8:08 PM
    In trouble with Debt - Now cannot get a loan 15th Aug 19 at 8:08 PM
    Hi, as the title suggests myself and my wife are in trouble with debt and I cannot get a loan to cover it, even though I have a good credit rating.


    Im looking for some advice on where to go next, as the stress is now getting to me and is starting to effect my life, work and marriage, and I cannot let my family down.


    I will start by saying I have had a god search around the site and read a lot of threads, but nothing has been very relevant to my situation.


    Firstly, some background. I am 32 year old male, married and 2 kids. I have a house with a mortgage, and 3 bank loans in may name only, with my own bank. I am employed full time and receive a good monthly pay. I alone pay the mortgage, services bills and council tax. I use the Clear Score app to track my credit rating, which tells me I am 'soring high' and a good 60 points above my area average and the UK average.
    My wife has multiple small loans in her name, a poor credit rating and has been poor with money control, prior to our marriage. She is not on the mortgage, and dose not contribute towards the household services bills, but does do the shopping.


    We both have a car each, and the youngest is in nursery (with a monthly bill). other bills are the usual phones, internet etc.


    Now, the problem.
    Only one of my loans is for me. I took the other two out to cover my wife's debts. At the time this was not an issue and she paid me the monthly cost. But then Her father died and things got off track and out of hand. The outcome of this, a few months on, was that she became dependant on 'payday loan' companies instead of talking to me. This went on for a short while until it all came to light and we talked it through and sat down to make a spreadsheet of all the debts. After we had worked out a total of her debts and the 3 loans I have, I started looking at one loan to cover them all, to pay off my wife's payday companies and to consolidate my 3 bank loans into one loan to leave us with one easy payment split between the two of us. I have been looking for this loan in my name only, as I am under the impression (from my clear score app) that I have a very good credit rating and that will give me more opportunity or chance of being accepted.


    Except I am not being accepted.


    Now, I feel like I have worked all my numbers and figures out correctly, and the new loan total and monthly payments (split between the 2 of us) would be lower than what we are both paying currently. But I am still being rejected. I feel like our total debt is not high, even though its higher than I would want it to be, in comparison to some cases I have read about on this site.


    Im Looking for what im doing wrong, or where I can turn to next. Thank you
Page 2
    • Lungboy
    • By Lungboy 16th Aug 19, 7:18 AM
    • 1,826 Posts
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    Lungboy
    Have you spoken to your own bank? The only possible chance of a consolidation loan happening would be with your own bank because they could personally cover the other 3 outstanding loans to them, ensuring you don't end up with double the debt. However even that is unlikely to be accepted. The Debt free board people are very very good at this kind of stuff, so as others have said, post a Statement of Affairs over there and be prepared for some temporary belt tightening.
    • MEM62
    • By MEM62 16th Aug 19, 8:24 AM
    • 2,769 Posts
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    MEM62
    I agree that i have debts, but this one loan would cost us less and be easier to pay, im not sure why that cannot been seen by a lender. For as complicated as money lending is, this seems to be a pretty obvious fix.
    Originally posted by ChocolateLabOwner
    The lender sees it much clearer than you do. They know that consolidation loans often do not work and, in many cases, only free up paid off credit cards for further spending, hence fuelling the debt spiral.

    You cannot borrow you way out of debt. At some point you have to stop living beyond your means, bring your spending under control and take steps to address the debt.

    And if a credit rating is made up, why is it so bloody important to everyone?!
    Originally posted by ChocolateLabOwner
    Because they believe the advertising.

    I'm not trying to get rid of my debt fast, I'm just lost on how to make my monthly payments easier
    Originally posted by ChocolateLabOwner
    You can only do that by addressing your over-spending. You need to make some life changes.

    I've tried to cut back all our spending but its hard with 2 kids.
    Originally posted by ChocolateLabOwner
    Post up an SOA and you will be given lots of useful advice to help you.

    I'm failing my family because i cannot fix this, even tho 75% of the debt is my wife's i still see it as my duty to fix this
    Originally posted by ChocolateLabOwner
    That needs to change if you are going to resolve this. It is not your duty to address this. You have done that in the past an look where it's got you. As your wife has not had to deal with the consequences of her spending she has not learnt from the experience. You both need to fix this. You need to stop enabling her to run up debt and you both need to work out a plan for addressing the debt.

    You have had some very good advice from other members of this forum. Heed it or things will just continue to spiral out of control.

    You will not be able to borrow your way out of this situation. It's time for a different approach.
    Last edited by MEM62; 16-08-2019 at 8:37 AM.
    • ChocolateLabOwner
    • By ChocolateLabOwner 16th Aug 19, 8:43 AM
    • 10 Posts
    • 2 Thanks
    ChocolateLabOwner
    I have only listed/described our situation as 'me and her' to show the totals for each person.

    Her previous debt issues were under control like i said untill her father past away.

    I decided to take on her debts to help her rebuild, but things have taken a turn for the worse.
    • bigisi
    • By bigisi 16th Aug 19, 8:50 AM
    • 709 Posts
    • 1,317 Thanks
    bigisi
    I have only listed/described our situation as 'me and her' to show the totals for each person.

    Her previous debt issues were under control like i said untill her father past away.

    I decided to take on her debts to help her rebuild, but things have taken a turn for the worse.
    Originally posted by ChocolateLabOwner
    Yet you say you're the one failing your family whereas it's her who's done all the damage and you're left picking up the pieces.

    As has been said, unless she sees any consequences of her overspending she's not going to stop so you'll consolidate only for her to keep increasing the debt.
    • lindens
    • By lindens 16th Aug 19, 8:54 AM
    • 2,464 Posts
    • 7,220 Thanks
    lindens
    go over to the debt free wannabee board and read up about doing a statement of affairs (SOA). Gather together all your debts, the total o/s and the interest rates. same for any credit cards. get wage slips and bank statements
    fill out the SOA completely truthfully. this is important - if you dont do it truthfully its a pointless exercise and the only person losing out will be you.
    If you are brave post the sOa on the DFW board and ask for advise on areas where you can cut back on outgoings. Even if you arent, it will be a worthwhile exercise
    Now both of you must keep a spending diary for a month and see where you are spending your money. every . single . penny
    On the DFW is a diary section - read peoples diaries and see where and how they cut back each month
    You're not your * could have not of * Debt not dept *
    • AliceBanned
    • By AliceBanned 16th Aug 19, 11:24 AM
    • 2,576 Posts
    • 1,218 Thanks
    AliceBanned
    You have posted here at the right time because it's not too late to get a grip on this.


    Speak to Stepchange and go on the DFW Board to start budgeting. Your income looks sufficient to repay the debts but probably only just. You need advice. Consolidation may be possible down the line to make things easier but once you are in a position to get a consolidation loan you may by then have changed your attitude and may want to try to get rid of debt altogether (which doesn't require consolidation) and start saving. Progress can be slow so be patient and take it one step at a time.
    DFW. PayDBX 2019#163
    Debt at LBM: 18,335
    Current debt: 8,630
    Mort overpaid 800 EF: 200
    _________________________
    • pelirocco
    • By pelirocco 16th Aug 19, 12:19 PM
    • 7,728 Posts
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    pelirocco
    You need to look at this as joint debt / joint income and account for every penny you both spend . You cannot keep taking on her debt if her spending is an issue
    Vuja De - the feeling you'll be here later
    • MEM62
    • By MEM62 16th Aug 19, 12:58 PM
    • 2,769 Posts
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    MEM62
    I have only listed/described our situation as 'me and her' to show the totals for each person.
    Originally posted by ChocolateLabOwner
    And to show where the debt was built up and what you have previously done to try and resolve the situation.

    Her previous debt issues were under control like i said until her father past away.
    Originally posted by ChocolateLabOwner
    I do not understand how that event impacted her finances?

    I decided to take on her debts to help her rebuild, but things have taken a turn for the worse.
    Originally posted by ChocolateLabOwner
    As you have pointed out, you took on her debts and that did not lead to a positive outcome. You therefore need a different approach this time round. If you repeat what you did last time you can expect the same result as last time - ie further debt.
    • iolanthe07
    • By iolanthe07 16th Aug 19, 1:41 PM
    • 5,230 Posts
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    iolanthe07
    The problem with a consolidation loan is that the lender had no guarantee that you will use the loan to pay off your existing debt. Lenders know that some people will take out a consolidation loan and then blow it on a new car or a holiday or some such, and end up with twice as much debts as they started with.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • sourcrates
    • By sourcrates 16th Aug 19, 2:11 PM
    • 18,233 Posts
    • 17,140 Thanks
    sourcrates
    Consolodation of debt is not a recognised debt solution that any advisor worth their salt would ever recommend.


    Most bankrupts or insolvents have consolodated their debt at least once, most more than that, the biggest single problem with it, is that the consolodated lines of debt do not get closed down, as the debtors do not change their spending habits once they consolodate, so the temptation to use those credit lines increases with time, then bang, all of a sudden the cards are maxed out again.

    We see it all the time on the debt boards, the only way to successfully deal with problem, unafordable debt, is to change your spending habits, and then possibly make use of one of the following formal, or informal debt solutions :

    Bankrupcy (formal)

    Individual Voluntery Arrangement (formal)

    Debt Relief Order (formal)

    Debt Mangement (informal)

    Of course it may just be better budgeting or maybe stoozing of the debts thats required, a Statement of affairs (SOA) usually tells us what we need to know.
    Why not pop over and ask for some advice.
    Last edited by sourcrates; 16-08-2019 at 3:14 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".

    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views expressed are mine and not the official line of MoneySavingExpert.com.

    Helping you deal with problem debt.

    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
    • Kentish Dave
    • By Kentish Dave 16th Aug 19, 3:04 PM
    • 783 Posts
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    Kentish Dave
    Looking at how much easier it would be on lower payments misses the point. You have show yourself to be someone who gets into debt problems, and you are on the edge of defaulting.

    You are asking a company with no or small exposure to you to expose themselves to your risk, and for a lower return than did lenders when you were in less trouble.

    Why would they do that? They know that you are a risky proposition, what would make them want to lend to you.

    Until you sort yourself out you are going to struggle I think to find a lender so lax as to want you on their books.

    What is your plan B?
    • enthusiasticsaver
    • By enthusiasticsaver 16th Aug 19, 4:16 PM
    • 9,034 Posts
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    enthusiasticsaver
    Repaying your wife's debts was the first mistake. She needs to sort out her overspending and whilst there may be reasons/excuses for why this happened she and you both need to address this. The situation will not improve whilst she continues with this destructive financial incontinence.

    You need to be working as a team so your wife should be contributing to the bills especially if two of your loans were taken out to clear her borrowing. If 50% of your wife's income is going towards debt repayments she may need to look at some debt solution like an IVA or DMP. If she is not named on the house then even bankruptcy might be an option.

    One thing for sure though is debt consolidation does not work as you have already seen. You have already consolidated twice by taking out loans to repay debt and still the debt is getting higher rather than being repaid. Stop now and address the core reason for you getting into debt which is overspending. Look at your budget and maybe your wife should phone stepchange or put a soa on here to get more detailed advice.

    People often come on here and say as you have that borrowing more to repay old debt will sort out their problems. It almost never does and inevitably in a few years the debt is higher again. It just delays the inevitable which is cutting back on expenditure or increasing income is the only way out of the debt spiral.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • cymruchris
    • By cymruchris 16th Aug 19, 4:32 PM
    • 154 Posts
    • 91 Thanks
    cymruchris
    I would like to add that all the advice you are hearing is really good advice - but it might not be advice you want to hear. You might have it in your mind that consolidation is an option - and you'll manage your way out, and will then get frustrated further as no lenders will consider you. As an ex-bankrupt - please do consider very strongly the advice you've been given above. In some cases you're going to have to make significant lifestyle changes if you want to begin attacking your debt mountain - as that's what it is right now. Kids or not - unless you do something - and soon - the 'kids' might not have anywhere to live if you carry on at your current rate. You have to face up to the changes needed, no matter how challenging it's going to be. There are plenty of recommendations as to how you can save money - are you on a satellite tv package? Do you have a huge internet deal? Can you go freeview? Cut yourself down to a much cheaper internet package without the bells and whistles? What do you spend each month on socialising? The questions - and ways to potentially save are quite considerable - so do as people have said and start listing it all in a statement of affairs - people here will be more than happy to help advise on how you can make improvements that shouldn't be too painful (and some that might be painful but will get the mountain down quicker)
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects Happy to help others going through what I've been through!
    • Onemanandtwolittleladies
    • By Onemanandtwolittleladies 21st Aug 19, 3:29 PM
    • 33 Posts
    • 39 Thanks
    Onemanandtwolittleladies
    Great advice on this thread. I just wanted to add my support as you sound in a difficult position.

    Most important thing is sitting down with your wife and ensuring you’re both on same page as else it’ll never work. Then accept you cannot borrow your way out a debt problem. It’s a long hard road of cutting back and paying off ASAP.
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