Ok, my mate has managed to completely shaft himself! He owes some £3000 to the bank, has to pay his £750 rent in the next week or two and has a few other debts mounting as well.
My question is this, is there a magic bullet?
He is in a situation where he will soon be clobbered with immense amounts of interest payments (at the end of the month, one assumes) which obvious just makes the situation worse! Is there a way to get the interest capped? I have seen adverts on the TV offering people in these sorts of problems a way out, utilising some government legislation (though i didn't catch what).
Is there anyone out there who is in the know about these things, advice would be much appretiated. If he gets hit by interest this month, he's sunk, simple as that. 🙁
Originally posted by MarinkatombThere is a good book by Dave Ramsey called "Total Money Makeover" which I would recommend.
Ok, my mate has managed to completely shaft himself! He owes some £3000 to the bank, has to pay his £750 rent in the next week or two and has a few other debts mounting as well.
My question is this, is there a magic bullet?
He is in a situation where he will soon be clobbered with immense amounts of interest payments (at the end of the month, one a ...[text shortened]... ould be much appretiated. If he gets hit by interest this month, he's sunk, simple as that. 🙁
Originally posted by MarinkatombDon't do the debt reducers, most of them are con artists, they'll take your money and rip you off. He'd be better off calling his debtors directly and seeing what he can work out. Regardless, his credit rating is going to tank, but, it sounds like he's got bigger problems. If he's got family, perhaps they can help him dig himself out of the hole. If he's got credit cards, he need to cut them up immediately.
Ok, my mate has managed to completely shaft himself! He owes some £3000 to the bank, has to pay his £750 rent in the next week or two and has a few other debts mounting as well.
My question is this, is there a magic bullet?
He is in a situation where he will soon be clobbered with immense amounts of interest payments (at the end of the month, one a ...[text shortened]... ould be much appretiated. If he gets hit by interest this month, he's sunk, simple as that. 🙁
As a last resort, blood and semen are fetching quite a price lately... he'll have to act fast, the holidays are a busy season and the market will be saturated before you know it.
Originally posted by MarinkatombCAB are the best people to ask. avoid those dodgy ads...you usually need to be a homeowner anyway. this website might offer some good advice:
Ok, my mate has managed to completely shaft himself! He owes some £3000 to the bank, has to pay his £750 rent in the next week or two and has a few other debts mounting as well.
My question is this, is there a magic bullet?
He is in a situation where he will soon be clobbered with immense amounts of interest payments (at the end of the month, one a ould be much appretiated. If he gets hit by interest this month, he's sunk, simple as that. 🙁
http://www.nationaldebtline.co.uk/england_wales/
i suppose the best thing is not to avoid debtors. get in touch and explain your circumstances. things will only spiral out of control if ignored.
Declaring bankruptcy should be avoided
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=29_debt_management_plan
Here is another good site:
http://www.moneysavingexpert.com/
If your mate can still get credit cards, it might be worth applying for interest free ones (but do not use them for purchases!) and transfer between them. There are interest free for purchases as well, but there is a strong temptation to let that balance build up and end up in a lot more debt.
He will have to make sure the minimum payments (although strongly advisable to pay a lot more than the minimum if he can affort it) are paid every month, otherwise he could end up with paying hefty late fees.
He will also have to make sure that about a month before the interest free period, he applies for another one to allow for time for them to process it (and the possibility that his application could be rejected).
There is huge amounts of advice on this site. It is frequently updated and gives information about saving money on a wide variety of things. There is a lot you can do before you even consider bankrupcy.
Also get him to note down ALL his incomings and outgoings. Do this for things that might be weekly, monthly and annually. Keep updating this information. He might be surprised as how much money he is throwing away needlessly.
It just would require your mate to become very disciplined. Cut back heavily on luxuries at least until he has things under control again.
Once the debt is cleared, cancel all your credit cards. You can keep one but you will have to be very discipined in paying it off completely every month.
Once you are out of debt, do not be tempted by getting more interest free credit cards. They can be useful tools in getting rid of already existing debt, but a honey trap if you do not need them.
This is the kind of thing I get for being a son of a retired financial advisor. 😉
Originally posted by wucky3Thanks for that, i'll check that out. 🙂
CAB are the best people to ask. avoid those dodgy ads...you usually need to be a homeowner anyway. this website might offer some good advice:
http://www.nationaldebtline.co.uk/england_wales/
i suppose the best thing is not to avoid debtors. get in touch and explain your circumstances. things will only spiral out of control if ignored.
Declaring bankrupt ...[text shortened]...
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=29_debt_management_plan
Originally posted by Red NightAhh, that's interesting, don't suppose you have a link?
The UK just changed their Credit Card laws. I am not sure about all of the specifics, but part of the change would allow people to get out of credit card debt without declaring bankruptcy.
I think you go to the office of the ombudsman?
Originally posted by Marinkatombhttp://www.opsi.gov.uk/acts/en2006/ukpgaen_20060014_en.pdf
Ahh, that's interesting, don't suppose you have a link?
The bill is called the Consumer Credit Act of 2006. I believe it is still a proposal, but is expected to be enacted.
You may want to search under that title and see what comes up in terms of specific advice.
Originally posted by MarinkatombYour mate? Yeah, right.
Ok, my mate has managed to completely shaft himself! He owes some £3000 to the bank, has to pay his £750 rent in the next week or two and has a few other debts mounting as well.
My question is this, is there a magic bullet?
He is in a situation where he will soon be clobbered with immense amounts of interest payments (at the end of the month, one a ...[text shortened]... ould be much appretiated. If he gets hit by interest this month, he's sunk, simple as that. 🙁
Has anyone looked into the illicit bank charges part of this site? It seems extremely optimistic about reclaiming bank charges that have been 'unlawfully' imposed on people and has a grand array of letter templates and spread sheets for the use of the public to help reclaim such charges.
It does however have a link to an on line service for settling small claims issues.
My question is, is this a con in itself to get people to make claims against these people, even if they have no chance of winning, just to get people to use this service and pay monies to them?
Any help appreciated. Even if it's ill placed humour.
Cheers
Jim
I work as a debt collector for a major credit card providor in the UK. (they shall remain nameless as I don't need the hate mail😛)
1st and foremost he needs to contact his creditors and advise them of his difficulty. He's not the only one and i'm sure his bank has whole departments paid to deal with people in such situations.
The first thing he needs to do is sit down and prepare a financial statement, this is basically a breakdown of his income, expenditure and a list of creditors. It is normally on a monthly basis and should include any neccesary expenditure ie. rent/mortgage, household bills(gas, electricity, council tax etc), food/housekeeping, travel(car expenses, petrol, train fares or anything he needs to spend to get to work), insurances(car, buildings, health etc), maintenance, tv licence.... basically anything he NEEDS to spend money on within a calendar month including debts secured on his home. his list of creditors should include the up to date balances of what he owes.
The creditors will use this information to work out his disposable income each month > Total household income- neccassary expenditure = disposable income
then we work out what the pro-rata amount should be paid to each creditor based on the creditor balance. ie if he has a disp income of £200 and he owes 10,000 in total. if he owes my bank £5000 we would want £100 per month.
If the pro-rata amount is less than the minimum payment required by the creditor the creditor is obliged to help the customer, in my bank by reducing interest to 0%, stopping all fees/charges and agreeing a reduced payment arrangement.
I would strongly advise your friend to seek advise direct from his creditors, IF he feels that he cannot deal with all his creditors directly(or he has not gotten any help-this does happen unfortunately) he will need to seek help elsewhere, there are many debt management companies out there, many of whom charge extortionate fees to help you. some of the free ones are:-
payplan
the cccs(consumer credit councelling service)
the C.A.B
all of these are non profit organisations, all of these are as slow as hell as they are extremely busy.
with regards to the magic bullet... no.
there are ways to make yourself insolvent through bankruptcy but this must be agreed by a judge and is only granted in times of extreme difficulty. there is something called an IVA which is a voluntary arrangement brought to your creditor by an insolvency practitioner(who makes a load of money out of it) NEVER TAKE FINANCIAL ADVICE FROM SOMEONE TRYING TO MAKE MONEY OUT OF YOUR SITUATION.
PM me if you want more information about this, that goes for any of you in the uk.
A few companies to be wary of
Spectrum...fees galore, currently under investigation, recently featured by watchdog
Harrington brookes.... Fees galore
gregory pennington...Fees galore
ANY company trying to sell you an IVA, for some people an IVA is the correct way to deal with mounting debts, for a lot of people it isn't, do your own research and make up your own mind.
Hope this helps.