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| The independent answer to your debt problems | login join |
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frantic_shopper
| 04-05-2007 12:39 PM |
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Joined: 04 May 2007 Posts: 2 | I hate to admit this but I have run up debts of about £18,000. I love shopping and I have 4 credit cards and 5 store cards all in use. I keep applying and getting rejected for a loan due to my poor credit rating. I am now struggling with the repayments on my cards. I'm also getting a lot of hassle from the creditors. I'm off work with all the stress. Someone mentioned to me about using the equity in my house. Can I use the equity to pay off my debts? Not sure how this works. Please, any advice? I am at my wits end. |
| DW George | 04-05-2007 02:37 PM |
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Joined: 01 May 2007 Posts: 148 My Profile | Frantic You've done the best thing regarding your debt and that is talking about it by posting here. Hopefully you will find some help here. There are a few things which jump out from your post: 1. You have store cards which are notoriously expensive ways of getting credit, APR's around 25%. Balance transfer may be an option but since you have found it hard to get credit this will be difficult. At least try and negotiate a lower interest rate with your current credit card companies. They may be even receptive to accepting a balance transfer of all your debts. 2. Creditors are pestering you. Check out my post for tips on dealing with them. 3. Off work with stress. If you feel that your stress is linked with your debt problem then you need to take affirmative action. Ignoring your debt problem will only make things worse. Believe me when I say there is always a solution to your debt problem. Stress can always be reduce by having a plan. Draw up an SOA and post it here and we will see if we can help. 4. Equity. You could use your equity to pay off all your debts. But remember you may lose your house if you don't keep up with repayments. Either consider re-mortgage or a secured loan. Do this only if you are happy adding your credit card debts to your mortgage; that it lowers the monthly payments on your debt, and the loan is cheaper than your existing debts. As you can see there are options available to you. Next step. Examine each of my points and see if they apply to you. If you need some more help or you think you may have a "daft" question don't worry just ask. No one will judge you. George |
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frantic_shopper
| 08-05-2007 11:16 AM |
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Joined: 04 May 2007 Posts: 2 | Thanks for the advice. Looks like I have several options. I will look into these. I'm going to try the creditors first to see if they can help me with a lower rate, it's a start. Back soon with more questions. Thanks, Frantic. |
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UpToMyEyesInIt
| 12-05-2007 09:35 AM |
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Joined: 12 May 2007 Posts: 5 | Newbie here. Hi all I have been reading all the posts and was drawn to add some of my own experiences. Frantic, I hope you have benefited from the advice. If you are struggling with getting credit I would write to them. I have a simple letter which worked for me. Post this letter to the credit reference agencies and they will supply you with a copy of your report. Hope it all works out for you Experian Ltd Consumer Help Sevice PO Box 8000 Nottingham NG80 7WF Dear Sir / Madam, Under section 158(1) of the Consumer Credit Act I am requesting a copy of my credit report. Please find enclosed the statutory fee of £2. My personal details are: Name: Current Address: Date of Birth: Your contact details (Phone / Email): In the last 6 years I have lived at the following addresses: Yours Faithfully |
| DW George | 12-05-2007 10:08 AM |
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Joined: 01 May 2007 Posts: 148 My Profile | Thanks for that Upto... Frantic Read this article for more information on improving your credit rating. Here, you'll find some more information, addresses to write to, and why it's necessary to check your credit rating. |
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Jack05
| 14-05-2007 08:23 AM |
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Joined: 02 May 2007 Posts: 2 | I remember seeing a program on TV about being in this situation and they advised that you should attack the smallest debt first, then move on to the next paying the money you were paying to the first card into the next. Does that make sense? Wouldn't it be worth attacking the higher interest card rather than the low balance one first? |
| DW George | 14-05-2007 11:33 AM |
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Joined: 01 May 2007 Posts: 148 My Profile | Jack This strategy in dealing with your debt is called debt snowballing. This is a great strategy to deal with your credit card debt. As you have said this involves targeting the most expensive debts(the ones with the highest APR's), not the largest debts, whilst still making the min. payments on the rest. Once the most expensive debt has been cleared then you attack the next debt and so on. This strategy will reduce the time it takes to clear the debt and reduce save you money. I would definitely recommended this type of strategy. For more information of how to deal with your debts see my article on Debt Management Strategies. Good luck!! |
