Large debts, and I'm about to default on a bank loan. Panic ensues. (UK filter).
This is for UK MeFites.
Summary: large debts, and I'm about to default on a bank loan. Panic ensues.
Aged 38, I graduated in September 2011 with a supposedly vocational degree. Since then, work in this field has spectacularly failed to materialise despite considerable effort on my behalf. Graduating in a global recession sucks. I'm not prepared to say exactly what field I graduated in, but let's pretend it's physiotherapy. Practice is private only, I have no option to work within the NHS. While I appreciate many people here will want to know more and offer advice on how to get this job being productive, I'm working hard on that with colleagues and would prefer to focus on what I mention below. Much appreciated :)
Anyway, to cover the last 2 years of full time education, I took out a professional development loan from NatWest amounting to £20,000. It hadn't been my plan, but I had no option if I was to complete my studies. This was a second degree for me, so I was not eligible for government loans or any other aid.
Now my loan repayments are due, and I am about to run out of cash. I can no longer afford to make the loan repayments. In addition, I have a credit card debt of £3000 with HSBC, and an overdraft with NatWest that is close to the £2000 limit. I'm going to look into transferring the credit card debt to a 0% interest card. If I can't do that (transfer fees, or other unforeseen hassles) then I'll phone HSBC and plead with them to reduce the interest rate. Wish me luck.
My total monthly repayments (loan, credit card, and other sundries) are probably close to £500. My income is variable, but I'm claiming Job Seeker's Allowance, so as you can imagine I'm absolutely incapable of meeting the loan repayments.
Having spoken to NatWest about the loan several times, they say the repayments cannot be delayed. Even if they refactor the loan (spread the repayments over 10 years instead of 8, but at higher interest rates) the monthly repayments reduce only by £20 or so. This is the only offer they have put on the table.
So currently I'm facing defaulting on the loan. This would adversely affect my credit score, potentially preventing me from getting a mortgage in the future, any loans e.g. for a car, or becoming a company director (something I may wish to do in a year or so if my career ever picks up), as I understand it. I would very much like to avoid this.
I'm trying to contact my local Citizens Advice Bureau
, but they are extremely difficult to get hold of. I'm also going to investigate the Consumer Credit Counselling Service
Is there anyone else I should (or shouldn't) be speaking to?
In the mean time, if any MeFites have words of wisdom for me, I would be hugely grateful. A friend has suggested declaring myself insolvent, I think it's called an IVA. Would this be of any benefit to me at all? Would it harm my ability to operate as a sole trader in a partnership, or potentially starting a limited company in the next year or two?
I am also speaking to family about getting help covering my repayments until I can afford it myself. This is galling, since I've lived independently for the past 20 years, but I'm swallowing my pride and doing it anyway. I doubt they'll be able to cover the full repayment amounts even if they wanted to, and anyway I'd end up owing them the money.
I appreciate that Y-probably-ANAL, but any advice would be helpful. I'm currently totally lost and experiencing sleepless nights about this. Personal stories from people who are or have been in similar situations would also be helpful. I shall also be joining Money Saving Expert
where I'll ask the same question, and trawl through the forums. Needless to say I'm Googling my heart out and making phone calls.
Reading through this MF thread
is proving entertaining! I currently work two weekdays and a Saturday, so other work would have to fit into this. I also live in London, where travel costs are significant.
Since people may not wish to share personal details on here, you're welcome to email me here: firstname.lastname@example.org
Many thanks for taking the time to read this sorry tale :)