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essex_jim

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Post by essex_jim » Tue May 25, 2010 8:28 am
Hi, completely new to all this so looking for some helpful advice.

I have around 10k worth of debt. 3 loans totalling 7k and the rest in payday loans. I rung this firm moneyexpert.com up yesterday and they've worked out my outgoings and they've offered me something called a 'full and final programme' is that the same as an IVA? They've said it can be paid within 9 months, I can afford to pay over £700 a month due to living at home so 9 months for me to be debt free sounds fantastic. Is this to good to be true? How does it affect my credit rating longterm? I'm expecting it to stick on file for a few years but one day I would like to buy my own house, is that impossible if I go down this path?

Also, a number of the payday loans seem to have 'scare tactics' that I've read up about online, if I hand all power to this firm am I likely to hear from the firms much again?
Thanks in advance, Jim.
 
 

kallis3

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Post by kallis3 » Tue May 25, 2010 8:38 am
Hi Jim and welcome to the forum.

You can pay off an IVA in less than 12 months if you have the money available. However, if you are able to make your contracted payments to your loan company and the payday loans then it may not be accepted. Also, if you can pay £700 a month the creditors may ask for you to do a Debt Management Plan so that they get their money back in full.

If you did do a full and final, your credit rating would still be shot for 6 years as you have done an IVA.

If you do an IVA then your creditors cannot chase you for the money.

I suggest that you seek further professional advice. Visit www.iva.com for a list of companies and reviews and give one or two a ring. The advice is free and impartial.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

wannabedj

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Post by wannabedj » Tue May 25, 2010 8:41 am
Not sure on the answer to this but I know all about them pay day loans. Complete W@nk**s! How they get away with advertising on TV I never know. I learned my lesson the hard way. They came round my house at all hours trying to get £££ out of me. Letters and phone calls! Ended up going to HSBC bank and litterly get on my hands and knees begging them to help me! In the end they did but had to surrender my bank card for 12 months, only way I could get my wages out of the bank was going inside the branch!
I think how hard they push depends on how much you owe. I owed £1200 in year 2000.
If Football was meant to have been played in the air then God would have put Grass in the Sky
 
 

essex_jim

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Post by essex_jim » Tue May 25, 2010 8:46 am
Many thanks for getting back to me so quickly!!

The bit you said ‘However, if you are able to make your contracted payments to your loan company and the payday loans then it may not be accepted.’ I’m a bit lost there? Are you saying if I’ve kept up to date on payments recently (which I have, it’s just I’m only paying the interest and the debt is increasing as a result) then the loan firms will just say no to any agreement? Presumably the reason is because they think they can still get the money in full?

My credit rating being shot for 6 years is something I can live with, in all probability it’s shot to bits anyway with missed payments etc over the years, at least I could save once the debts paid off. What happens after that? Can you rebuild it?
 
 

kallis3

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Post by kallis3 » Tue May 25, 2010 8:55 am
If you are struggling then no, there shouldn't be a problem.

I'm not saying that they would refuse you but if you can pay them back in full in a short period of time as well on a DMP then they may want that.

You can rebuild your credit rating afterwards, just takes a little time.

I would speak to a few more companies though.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
 
 

MelanieGiles

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Post by MelanieGiles » Tue May 25, 2010 9:01 am
If your debt is only £10k and you can afford £700 per month, surely you are in a position to afford normal contractual repayments without the need of external assistance? How much are your normal monthly repayments to these loans?
Regards, Melanie Giles, Insolvency Practitioner
 
 

jtomo64

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Post by jtomo64 » Tue May 25, 2010 9:07 am
If you only have 10k of debt and can afford payments of £700 I doubt an IVA would be acceptable to creditors. It appears that you are not insolvent and therefore can manage payments as they become due.
If the interest rates you are paying are high and cause no decrease in capital owing after payment then as suggested it may be worth seeking a Debt Management Plan.
Creditors will ultimately want the highest return on their money and by means of a Debt Management Plan would achieve a full return. Although they are not legally obliged to freeze interest charges, an arramgement can usually be made with negotiation.

If you payed £700 for 9 months then you would be paying £6300 into the IVA, with fees this amount would reduce dramatically. I doubt this would be acceptable to creditors considering your ability to pay more.
I would suggest talking to several other companies before making a decision. Good luck!!
 
 

Michael Peoples

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Post by Michael Peoples » Tue May 25, 2010 9:07 am
Surely it would be worth speaking to your bank. If they can consolidate the debt over a two year period you would be much better off and your credit file would be enhanced and not destroyed for six years.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

essex_jim

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Post by essex_jim » Tue May 25, 2010 9:08 am
Trouble is with the payday loans, they charge extortionate fees, and I can only end up paying back the interest. The 3 loans are high interest also. £700 is not enough to pay these off without the debts increasing. I could write all of them down to show you but trust me I’ve tried to work out a way of doing this but it’s proving impossible. Like I told you I’m new to this so I’m genuinely all ears if you think a better solution can be had. I’ve written to some of the creditors but they don’t appear to listen. The payday loans for example just take the money from my account and then I have to end up reloaning just to have enough cash for the other loans.

The company I suggested above told me to cancel all direct debits to these firms and open up a new bank account which I plan to do today.

Do you think if I do that anyway (pretty much close my current account so none of these firms know where my wages are) and THEN contact them and say I will pay ‘XYZ’ out of the £700 I can afford (through a standing order or giros) they would buy it?

I just don’t fancy taking on 10 or so companies with all the letters, phonecalls that are likely to come with it. I think it would stress me out no end if they don’t agree.
 
 

Michael Peoples

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Post by Michael Peoples » Tue May 25, 2010 9:11 am
If may be a good idea to open a new account to protect your wages. However, I do believe you should at least consider consolidation and it may be worth getting a copy of your credit file. Not all companies use the credit reference agencies and previous problems with payday loan companies may not show on your credit file.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

jtomo64

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Post by jtomo64 » Tue May 25, 2010 9:11 am
Good advice from Michael.
If you can afford payments of £700 per month, you would surely benefit long term by consolidation.
Why destroy your credit file if you dont have to.
If you want to buy your own house in a few years then having an excellent credit file will help no end in obtaining a mortgage.
 
 

essex_jim

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Post by essex_jim » Tue May 25, 2010 9:21 am
I don’t think I can speak to my bank, my credit rating is terrible and I don’t think they’ll loan anything to me. People have mentioned a DMP, excuse my ignorance but what’s the difference between this and an IVA?
 
 

essex_jim

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Post by essex_jim » Tue May 25, 2010 9:39 am
To clarify

Welcome Finance - £4,500 outstanding, currently paying £280 a month
Speedloan Finance - £600 outstanding, currently paying £88 a month
Trident (a collection agency on behalf of Natwest) £2k outstanding. £90 a month. This debt is rising though. The £90 doesn’t even cover the interest so it just keeps going up.
Pounds till payday - £500 outstanding £120 interest a month.
Quickquid - £500 outstanding £100 interest a month.
Wageday Advance - £500 outstanding £100 interest a month.
Payday Express - £250 - £60 interest a month,
Lending stream - £400 - £125 a month
Payday Bank - £500 outstanding £110 interest a month.
Perfect Payday - £250 - £50 interest a month.
£50 a month in Overdraft charges.

So in all that’s around £1200 a month. The payday loans don’t go down at all with the repayments and if I need more cash then I borrow more and the problem worsens. I’m shocked at the amount of responses I’ve had on here already, I’m very very grateful.
 
 

Michael Peoples

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Post by Michael Peoples » Tue May 25, 2010 9:39 am
Your bank can only say no so it may be worth a try. However, if they cannot help a DMP is where you pay your creditors what can afford each month until the debts are cleared in full. Interest and charges normally stop and creditors are paid according to the size of their debt. For example if Bank A is half your debt they get half your surplus and a small payday debt will receive a small monthly payment. At £700 per month you should be debt clear in less than a year and a half even if you paid a DMP company to administer it for you.
Michael Peoples | McCambridge Duffy Insolvency Practitioners
http://www.mccambridgeduffy.com
If you would like to talk to me about proposing an IVA or have any questions at all please visit www.mccambridgeduffy.com
 
 

essex_jim

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Post by essex_jim » Tue May 25, 2010 9:42 am
A DMP sounds the best option then, I think that was what I googled and ended up with the company I mentioned at the top of this thread. Do you have any recommendations of who to go with?
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