debt consolidation

[smithsmith]

I owe about �20,000 on various credit cards etc... I have recently cut up all my credit cards and would like to pay this sum of within the next 3/4/5? years. I earn approx �1,400 per month (after tax) how can I get this whole amount together and pay it off, whithout paying massive amounts of interest, and who is the best (most honest?) person to go to (I do not own a house) ?

[TTFresh]

Got called into my bank under the pretence that my bank manager could save me money.  He ran through everything i owed and I was very honst about it.  It helped me see what I had where and how much I had each month to deal with it.  It was, alas, a big sales pitch and really he only wanted to offer me a loan.  In short, i saw the APR and laughed but he had given me valuable advice.

I suggest you go to your bank, as their advice and then go find what they recomment cheaper on the net.  My bank offered me 15.9% on a loan whereas an internet bank offered 5.6% for the same.

Find out the interest rates you're paying and only consolidate those debts with high APR.  if you have an overdraft, chances are a loan rate would be higher than the rate you currently pay.

Managers are pushy and don't feel rude by not accepting.  They are salesmen as well as advisors so best to tell them to await your call.

Citizens Advice Bureaux are also a good place to start

[Didwot]

If you explain your difficulties candidly to the credit card companies they will sometimes agree to waive interest while you adhere to an agreed repayment programme.

[Steb]

Smithsmith,

You've already done the most difficult thing... you've admitted you've got a debt problem and you're trying to sort it out.

The first thing you should do is see a debt advisor at the Citizens Advice Bureau.  They'll be able to negiotate with your lenders on your behalf - they've done it a million times over for others, so know what to say etc.

They should help you come up with a repayment plan.  The snowball theory is good.  That way, you make sure you pay your debts with the higest APR first.  Depending on your credit score you may be able to get a 0% deal and shift a couple of balances over, or like a previous poster said, the CAB may be able to get your creditors to waive interest.

But getting your finances sorted takes more than sorting out a repayment plan.  If you can, talk to your friends and family etc so they know that the next couple of years are going to be tough.  Focus on what you want to do with all your spare cash when you've paid off your debts - buy a house, travel the world??? 

And break your journey to a debt free future into small steps, aim to reduce your debt by X thousand in X months, so you can get motivation from small steps forward.

Its going to be hard.  But once you've done it, you'll be cursing yourself you never did it sooner!

Steb