Just a quick question

[petec33]

Just a quick question i have debt totalling about £16,000 pounds with various companies and am about to consolidate with one loan over 5 years paying around £340.00 per month do you think this would be the best option or to look at doing an IVA??

[MelanieGiles]

Hi Pete

So long as you can be disciplined with this loan, and cut up all of the credit cards you have amassed which it is intended to pay off, then the loan is a good idea as it will be paid off in the same time period as an IVA. But do not fall into the common trap of starting to use your cards again. Tell the credit card companies to close your accounts.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[MelanieGiles]

Hi Pete

So long as you can be disciplined with this loan, and cut up all of the credit cards you have amassed which it is intended to pay off, then the loan is a good idea as it will be paid off in the same time period as an IVA. But do not fall into the common trap of starting to use your cards again. Tell the credit card companies to close your accounts.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Pete
This is a very important point that Melanie states regarding cancelling your credit cards.
From my own experience once you "pay off" a credit card it is still available to you with the balance cleared and if you are not careful you will start to use them again.
Conslidate your debt and chop up those credit cards.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[gimmewine]

I have a question here. How does closing the account affect your credit file? I read quite a few websites so can't remember the exact link but I read somewhere that if you have an entry reading account closed this in itself is a negative point?

I know my friend consolidated, then kept one credit card for emergencies but insisted the credit limit was reduced to £500. She uses the card for petrol and pays the balance every month. She is sensible though, and every time her limit gets raised she rings the company and asks them to reduce it again. I would probably falter and have that holiday, then struggle again, so for me that would simply not be an option.

[Adam Davies]

Hi
I would not think that closing an account will affect your credit file unless you had been in arrears.Most credit profiles will show a payment history,0000000S,with the S representing that the account has been settled,the row of 0s will show that there has been no arrears on the account whereas a I,2 or3 etc in the profile will show how many months arrears there had been.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[iva_squirrel]

Hello Pete,

Welcome to the forum.

Taking out a debt consolidation loan will not, of course, make you instantly debt free. However, it may be that such a loan will give you a chance to structure your finance plan over a 5-year period. With the correct attitude, this may be an excellent opportunity to improve your finances in the long term, resulting in being debt free by the end of the loan period.


The consolidation loan will reduce your monthly outgoings, thus giving you the opportunity to save. By getting into the saving habit instead of debt habit, you will be able to set aside money to pay cash for the things you need in the future; if you are determined and disciplined, even that next car purchase can be in cash, rather than an expensive loan. The result: you become debt free. However if you carry on borrowing and using your credit cards, debt consolidation loans can be financial suicide.

Kindest regards,

Julia


For more information about IVAs, please visit my website:
www.supersonicsquirrel.net