Getting out of debt

United Kingdom
May 24, 2008 4:05am CST
I wasn't sure where to put this but I think here is as good as any. I am not in very much debt and, in a way, this makes it a whole lot worse that there seems to be no way of getting out of it. I am trying everything I can think of. I've applied for jobs so we've got extra income - can't get one. I've applied for loans but, because we don't have enough money coming in, we can't get a loan either. I have been looking for a consolidation loan so that we have one smaller repayment than a few larger ones. There appears to be no company who thinks I can afford the repayments on a consolidation loan even though I am already paying more in other debts. I, personally, am in around £2000 worth of debt. That's not much and I am really trying to get rid of it but it seems impossible. It appears that there is no company within the UK that can understand that if you are paying £200 a month in debts then you can afford to pay £100. I hope I have explained what I meant and if anyone has any ideas of what else there is to do, please tell me.
2 people like this
3 responses
24 May 08
The good news is that you're trying to do something about the problem this early, before you build up a really massive debt - and believe me, it's not uncommon for people to owe tens of thousands. Do you mind if I ask if it's credit card debts? If it is, the first thing to do is to cut up the credit cards and send them back. This will stop you getting any further in debt, and you'll also feel slightly better for it (I know this from experience). If you can't get a consolidation loan, it sounds like your credit score is no good. DO NOT apply for any more products that require credit vetting (this includes bank accounts). The banks don't tend to tell people this, but every time you are credit checked, it actually counts against your credit rating. I also suggest that you write to the credit reference agencies requesting copies of your credit record, just to make sure there's nothing on there that doesn't belong. You also need to keep a record of you income and expenditure, make it as accurate as possible, figure out what you can actually afford to pay, then send this information to your creditors along with an offer of reduced payments. A lot of creditors will be reasonable if you approach them honestly. And obviously try to earn a bit more money. I hope this advice is useful to you. Good luck.
• United Kingdom
24 May 08
Thanks for your comments. I know I am not in a lot of debt compared to many but I don't intend to get into any more. I am keeping the credit cards for emergencies - yes, really for emergencies. I'm not a spendaholic so I can do that. I shop for necessity, I don't enjoy it and the closest thing I get to a luxury is a bar of chocolate! I can make the repayments on the cards. My debts are two credit cards and a catalogue. I do manage to make at least the minimum payments but it would make more sense to pay one amount rather than several and, theoretically, the monthly payments would be lower over all. I have contacted credit reference agencies. There were a few inaccuracies on there and I, basically, got passed between the credit agency and the company who put the information there. I've tried to sort that out and I am still trying. I keep a very accurate record of income and outgoings at all times and it just about equals out. I know all about the credit vetting. We were almost turned down for a house we will be renting because of a bad credit record. I'm not applying for anything else. I think the inaccuracies should be removed after a certain amount of time anyway so, if that's right and the time is 4 years as I think it is, they will be removed soon anyway, not that it will help a lot because lenders seem unwilling to lend to people who don't have a landline telephone. (I know that's silly but it's still true). It's also difficult for self-employed or part-time employed people to get credit. And, as I mentioned, making extra money is not that easy. I have applied for part time jobs and been unsuccessful. (Part time because of my children so even if I wanted to leave them with someone else - which I don't - I'd be working just to pay for childcare) and, as I said to a previous responder, I'm doing a few online things to make a bit extra but, despite what some people claim to achieve, I can not seem to be able to make more than a few pounds. Thank you for trying to help.
2 people like this
25 May 08
Sounds like you're on the right track. You should be OK in the long run, barring disasters. If you can't get a consolidation loan, one thing you might consider is using any extra money that comes your way to reduce the smallest debt you have, so you pay it off quicker. Then when that's paid, you can use the money freed up from that to pay the other debts more quickly. You may already be aware of it, but there's a website called the Motley Fool which gives a lot of good advice in this area: http://www.fool.co.uk
1 person likes this
• United Kingdom
25 May 08
I'm already doing that too. Every spare penny that comes in goes towards debts - not that there are many spare pennies coming in! I have heard of Motley Fool and already use it. Thank you anyway.
@dorypanda (1597)
24 May 08
Whatever you do, don't use 'Provident or Vanquis' to get a loan or a credit card, their interest rates are astronomical! I can't really think of how to advise you really, but you could possibly go to your local credit bureau (I think that's what it's called) and set up an account with them, they are specifically there to help people who are in your position so hopefully they'll help you too. Unfortunately you do need to have an account with them before they'll help you though. I agree it's difficult to get out of debt once you're in it, especially if it's just a 'small' debt like yours. I don't know why banks etc don't understand that if you're paying a larger amount already then you can obviously pay a smaller amount. I hope everything works out for you, I'm sure it will. ;)
1 person likes this
• United Kingdom
24 May 08
Well, I have no intention of getting another credit card anyway and I am certainly not going with Provident for anything. Not only because of their ridiculous interest rate but their maximum loan for a new customer is only £500 which is a bit pointless, especially when, at their average interst rate, you would be paying £885 back on it. I know people won't believe that but, yes, they really do rip people off. It doesn't make sense that no one can help anyone pay off a small debt. It's especially frustrating when there is help for people in silly amounts of debt to get out of it and those people have to be in such a position that they had no reason to get that far in debt in the first place. It seems one of many things where help is available for those who shouldn't need it but not for anyone trying to help themselves. It is the Credit Union that you are thinking of. I forgot about them. I know you have to save so much with them. I think they lend something like double the amount you save with them. That's ok if you actually have something to save in the first place! Thank you.
1 person likes this
@dorypanda (1597)
24 May 08
Ah, that's the one! I didn't realise that, I thought they lent to you on a basis of how much your income/expenditure was, but of course not, that would make sense. :)
1 person likes this
@RieRie (820)
25 May 08
Could you get a loan from the catalogue you use, I got one from a catalogue company, but that was the only place that let part-time workers on a low wage get a loan, I can't remember the minimum, but I think it's £2000 or £3000.
1 person likes this
• United Kingdom
25 May 08
No, I tried that. Because I am not working, they didn't want to know. They told me I had to have a joint claim with someone who is working full time and I can't do that. That's another silly thing as well. My catalogue has raised my credit limit on the catalogue to over £4000 but they won't give me a loan.