Huge Debt - What are my options please

[DebtIssues]

Hi,

I am currently struggling with huge debt approx £47000 and am looking for possible options on how to deal with them. I found this site searching for various pieces of information and it has been very helpful to read the posts and the suggestions. My current situation is as follows:

- Full time employed with salary of £73k; monthly net approx £4k
- Live in privately rented home with my wife and 2 kids. I do not have mortgage or own a property
- I am so far up to date with my payments and have not missed any. My monthly outgoing in terms of loan installments and credit card payments is approx £1500.
- However since major chunk of salary goes in the paying the installments and credit card bills, I am not left with enough to go through the month, hence new credit or balance transfers every now and then. This cycle is not coming to an end and I have decided to do something about it. I am hoping to get some advice here on my options. But before that following are the different debts I have. They are all within last 3 - 4 years.

Ratesetter	Personal loan	£9,412.00
Ratesetter	Personal loan	£7,835.00
EUI Limited	Personal loan	£4,821.00
HSBC	Personal loan	£7,500.00
Paragon	Hire purchase	£8,000.00
Creation Credit Card	Credit card	£3,438.29
HSBC	Credit card	£4,500.00
PayPal	Credit card	£3,353.87
Santandar	Credit card	£3,400.00
MBNa	Credit card	£1,227.00
NewDay	Credit card	£2200.00

I have spoken with PayPlan, StepChange, National Debtline and Citizen Advice. They have all told me about DMP (Step Change suggested to go with this option), IVA (PayPlan recommended this option) and Bankruptcy.

I can make payments of £600 per month towards the lenders. If I go with DMP it takes me about 7 years to clear the debt. If I go with IVA it takes me about 5 - 6 years to clear the debt. I am not sure about bankruptcy.

I am confused on which option should I take. Should I opt for IVA or DMP?

I am renting and am also concerned which option would make it worse for me to find a rented property in the future.

Please advice.

Thank you.

[The Tech Clerk]

wow - unaffordable lending comes to mind??? @Diana Mayhew ????????????????

[The Tech Clerk]

Await responses but have you ever requested a CCA1974 with a pound to everyone of them? also look to make diaries for each one as then confusion in answer?? look around site get the idea

[JustAboutMad]

Just looking at list suggests you probably have a bank account with one of those lenders.

My advice would be to open a basic bank account with someone not on your debt list, and do it now whilst you're keeping up payments and your credit rating is still intact.

That way you can get your salary paid into the new account and it can't be touched by any of those lenders whilst you're sorting out how to proceed.

Whichever route you go down from here will affect your credit file, and that will make it more difficult to move house if your renting privately. There really isn't a way around that unfortunately.

What's the credit limit on your MBNA card? Just that seems like a really small balance for them considering your salary.

[DebtIssues]

Thanks The Tech Clerk and JustAboutMad.

I have not requested CCA1974. Should I do that? Can you please advise how that would help?

The credit limit on MBNA is 1500, quite old card - they probably have been smart not to offer me more.

I have opened a new account in Monzo so they are not in my debt list.

I am really interested to understand that in my case which option should I opt for - or is there another option I should go for?

Thanks

[The Tech Clerk]

Await Diana Mayhew

[JustAboutMad]

Thanks The Tech Clerk and JustAboutMad.

I have not requested CCA1974. Should I do that? Can you please advise how that would help?

The credit limit on MBNA is 1500, quite old card - they probably have been smart not to offer me more.

I have opened a new account in Monzo so they are not in my debt list.

I am really interested to understand that in my case which option should I opt for - or is there another option I should go for?

Thanks

I'm not best placed to advise you on the insolvency options, I'm here from getting myself into similar situations previously and getting myself out of it with the help of guys like Niddy on here and other older forums.

The CCA thing is basically to work out whether or not your debts are enforceable. That's Niddy's department. That would also probably depend on when the accounts were opened etc. A lot of lenders didn't stick to the rules and therefore left themselves open to loopholes. Di is the best placed to advise on the other options.

Just don't go and jump into any agreements with any of the debt charities just yet, they may seem like they know it all, but they really don't, and they can make things worse for you in the long run if you don't fully understand what you're signing up to.

I was just thinking with MBNA etc they quite often/almost always have balance transfer offers available. In the short term, you could bounce those around on 0% until you've worked out exactly how to proceed.

[Joanna Connolly Solicitors]

The credit limit on MBNA is 1500, quite old card - they probably have been smart not to offer me more.

^ ^ ^ ^ This comment catches my eye.

How old is this MBNA credit card account?

Di

[DebtIssues]

MBNA is around 5 years old. The oldest account is HSBC around 7 years old.

With the Credit Cards, I am bouncing the balances around with 0% offers etc.

[JustAboutMad]

I wasn't trying to 'teach my granny to suck eggs' with the 0% comment. Just there's bouncing them around, and then there's like I survived 12-18 months without really paying anyone a penny a few years ago when I was deep in it. I had a spreadsheet, debt got transferred from A to B several times a month, so it mainly resulted in no interest being added. Not recommended long term, but just creates breathing space whilst you deal with it.

What's your own thoughts on the IVA vs DMP dilemma?

[Warwick65]

Hi

Just a couple of comments

1) While an IVA may look appealing, a high percentage end up failing and then you are left owing almost or if not more than you started with- most of the payments go towards the IVA practitioners and the lenders start adding interest again. What happens if your salary drops?

2) Again, while BR may look appealing some points to remember, it may affect your job depending on what that is as some jobs do not accept undischarged bankrupts and I anedotally some jobs do not even accept discharged bankrupts; for the period of the bankruptcy (often a year) you will have to love on probably a lot less than you do now, of course I do not know what your rent is etc so can not say for certain but get some advice.

3) If you opt for a DMP- again your credit rating will be shot for 6 years maybe longer, also I would maybe err on the side of caution when deciding what you can or can not afford

If you decide to keep paying one option is what some call snowballing- pay the minimum on the lower interest rates and as much as you can on the higher rates. My guess is that some of the rates will be much higher than others.


So if you stop paying you will be bombarded with calls etc so it is not an 'easy option'. Again, if you do stop paying try to be disciplined and save a significant sum each month so if you have to you could make offers in a few months time. With regard to debt advice charities, I have little time for most of them, certainly not pay plan but that is just my opinion. I am sorry I can not give concrete advice but we will offer help and support where we can

[February17]

- Full time employed with salary of £73k; monthly net approx £4k

You have a good salary so don't let the debt get you down too much.

- Live in privately rented home with my wife and 2 kids. I do not have mortgage or own a property.

Is your wife aware of the debt problem ? Not being nosey just that hiding this debt when the collection phone calls start wont be easy.

[DebtIssues]

Hi,

Thanks for the input all.

My rent is 1000, I have budgeted that I need 3000 (including rent) every month as minimum. Which means if I keep paying I am add 400 more debt every month. This will mean that the balance wont go down fast enough. The credit cards as it stand except for Santander and PayPal are all on 0%, but they are due to end soon. I am worrying this would mean the interest will start adding and the total will become too much.

BR is not a good option for me due to my job situation. Also my wife and kids are not yet British citizens and there can be impact of my BR on their application as I understand.

Wife didnt knew till last week, but I decided to come clean. Was not easy but I am glad I did. She is not happy but is supportive.

So I cannot figure out if I should opt for DMP or IVA.

[Warwick65]

Hi,

Thanks for the input all.

My rent is 1000, I have budgeted that I need 3000 (including rent) every month as minimum. Which means if I keep paying I am add 400 more debt every month. This will mean that the balance wont go down fast enough. The credit cards as it stand except for Santander and PayPal are all on 0%, but they are due to end soon. I am worrying this would mean the interest will start adding and the total will become too much.

BR is not a good option for me due to my job situation. Also my wife and kids are not yet British citizens and there can be impact of my BR on their application as I understand.

Wife didnt knew till last week, but I decided to come clean. Was not easy but I am glad I did. She is not happy but is supportive.

So I cannot figure out if I should opt for DMP or IVA.

No judgement on my part - all I will say is that if you were to go the IVA or BR route I doubt they would give you 2K a month for expenditure even with 2 kids.

Assuming you are a British citizen I would really check up on the situation regarding your wife and kids. Immigration law is a bitch to understand. If they were born here to a British father then I do not see the problem but there again I am what some would call a snowflake- a Marxist lefty who hates this government and their hostile environment with a passion.

[The Tech Clerk]

^ ^ ^ ^ This comment catches my eye.

How old is this MBNA credit card account?

Di

Not an Old CCA then (makes a vast difference if was)??