Debt and all it entails

  bluto1 21:38 13 Jan 07
Locked

An old ex-service friend of mine asked me this evening if I knew anything about these firms advertising on TV and in the press that if you have large debts you could have most written off.
He`s in dire straits, so, because there`s such a large and diverse knowledge here I told him I`d ask you. Do you know anything about them?

  anskyber 21:42 13 Jan 07

Not written off but consolidated usually.

The consolidation is usually over a very long period (similar in some ways to a mortgage).

The result.....

large, very large interest payments over the pay back period.

Advice
go and speak to citizens advice about debt management.

  bluto1 21:52 13 Jan 07

That`s what I suggested to him, but his worry is that at the age of 74 what other chance has he of clearing these debts before he dies? I also suggested taking some of his property`s equity.
I`ve read one of the adverts and it actually states writing off 75% of the debt, not consolidating, and paying the remainder over a set period. He has the income, but he`s using all of his spare cash to pay off loans etc.
If it were me I think I`d go the equity route.

  amonra 21:53 13 Jan 07

Dont believe a word of those firms that advertise "Clear all your debts", they only want you to take out a "loan" from them to clear your existing debt, then pay them for the rest of your natural. STEER CLEAR !!!
Go see the C.A.B.

  Forum Editor 21:53 13 Jan 07

Me too, and that's the best advice you can give.

  anskyber 21:55 13 Jan 07

At his age the equity route has a lot of attractions and works well unless he expects to live to three figures.

  bluto1 22:04 13 Jan 07

Thanks everybody, I`ll see him tomorrow and put him on the right path. Many thanks for help.

  LastChip 00:38 14 Jan 07

There are some "right cowboys" jumped on the band wagon with this and you've had very good advice to steer clear.

The Citizens Advice Bureau are without question your friends best option. They will offer unbiased advice with no strings attached!

  GANDALF <|:-)> 08:38 14 Jan 07

1) 'Debt consolidation' firms will only tell you what the CAB will tell you except that they charge around £1500. The sooner the Govt close them down the better and I will say it...they are a CON.
2) Equity release through a reputable firm such as Lloyd's TSB etc. is the way forward. What is the point of having money tied up in a house when you can hardly pay the leccy? In the last 3 years I have completed probate for 5 people and 3 of them had equity release charges on their property. All that happens is that a solicitor releases the money owed as and when the house is sold. This is refereed to as a first charge so any capital from the sale of the house is paid to a solicitor firstly. In all three cases the capital had to be paid back plus interest which was at the normal rate for a loan (around 6% IIRC). Of course any beneficiaries from the will receive a reduced amount but this is not something the deceased is likely to worry about and why worry about leaving money when you can hardly make ends meet?
3) Under no circumstances should bankruptcy be ever contemplated. It seems easy these day and it can be but you will be financially castrated for many years and you will soon realise how much we all rely on finance. It is much, much, much better to enter a voluntary repayment contract over a given period. You do not need a company to help you do this as CAB will do it for nothing.

G

  BigAl127 08:48 14 Jan 07

Your friend could try either of these places for advice. They are both free, though extremely busy, so may take a while to get through on the phone.

click here

click here

  egapup 09:49 14 Jan 07

DONT ANYWHERE NEAR THEM !!!!!!!!!!!!! There was a financial expert talking on radio 2 about debt and he strongly warned against using these services. There is plenty of FREE financial help open to people in debt....Citizens advice bureau, magistrates court to mention just two and , i believe, bankruptcy laws have changed and its not so harsh now.....better then being in crippling debt.

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