Those Pesky Payday Loans

[Ric.ror]

My cousins girlfriend has a loan totalling £5k
She cannot afford the repayments and he is reluctant to help - it's not the first time she has done this
It's been suggested she declares herself bankrupt but will this affect his credit status should he need to increase his mortgage if he needs to move house

[AlwaysConfused]

I wouldn't bankrupt oneself for £5k. Get her to seek advice from the CAB, who could point her in the right direction for a reputable debt management company

[Buenchico]

The CAB often has long waiting lists for an appointment to see a debt counsellor. StepChange is a charity which can offer assistance straight away:
http://www.stepchange.org/
It can help with setting up a debt management plan or, if necessary, provide advice about IVAs, Debt Relief Orders and bankruptcy.

I managed to keep my creditors waiting for years, without the need to enter bankruptcy, when I had negligible income and debts of considerably more than £5k, so there's probably no need to rush into bankruptcy. (Plus it also costs many hundreds of pounds to file for bankruptcy, so many people can't actually afford to declare themselves bankrupt!)

[boxtops]

Does she have any sort of bank or building society account, ric? It'd be much cheaper for her to seek a loan from them to pay off the payday loan.

[ummmm]

If she's done it before and defaulted she probably has a bad credit rating.

It's her debt though, not his.

[ubasses]

As long as the mortgage will only be in his name it will not be affected by her credit rating which is probably bad if she has done it before. Agree with previous post, not worth going bankrupt for, get some good advice.

[Retrochic]

Any bad debt his girlfriend has will only effect his credit rating if they are thinking about getting a mortgage together.

[chrissa1]

She would need £700 in cash to go bankrupt, anyway. Not worth it for £5K.

[Buenchico]

>>>Any bad debt his girlfriend has will only effect his credit rating if they are thinking about getting a mortgage together

Not necessarily true. If they're already living together (or if it's clear that they intend to do so) a potential lender is entitled to assume a 'financial association' between the couple and assess the credit risk accordingly.

[weecalf]

my credit rating is nil because i owe nobody nowt ,so by borrowing her rating has probabaly gone up .wish i had some advice looks like she should try to come to some arrangement with the lenders if its possible

[Ric.ror]

Well I was thinking that if she went bankrupt it would stop her doing it again
As I said this is not the first time she has done this
His mortgage is in his name but they did intend to increase it to buy a larger place - they have a child
One suggestion was that he add the £5k to his mortgage but - as I said - what's then to stop her doing it again

[VHG]

Sorry to say this but she sounds like she is going to be "trouble" in the future if she keeps getting loans she cant afford to pay back.

If they are thinking of getting married then her "money troubles" become his "money troubles".

Pity they have a child because if not I would advise him to get out while he still can because people with money troubles like this don't often change.

[Retrochic]

Buenochico wrote: " If they're already living together (or if it's clear that they intend to do so) a potential lender is entitled to assume a 'financial association' between the couple and assess the credit risk accordingly."

Not true any more - things have changed

http://moneyaware.co.uk/2011/10/how-do-other-peoples-debts-affect-me/

[andrewhunter]

Whenever people apply for loans which they can't pay responsibly then that's obviously a proof that they're in trouble. I can suggest Payday loans UK though, for people who can pay back their loans as responsible as they can. They are personally of a great help right now in my financial status, if you may ask. Read the blog post and learn more about payday loans.

[andrewhunter]

http://www.trueblueloans.co.uk/fast-payday-loans-bad-credit.aspx