To borrow or not to borrow?
Question
My boyfriend is having real money problems. First, he took out a loan for £10,000, and then another for £9,000 to pay off some debts. Ideally, he hoped to consolidate the original loan with whatever money was left from the second loan, but there isn't any. So, now he's in a financial mess.
We live together and I'm worried he can't afford to pay off his debts and consolidate all his debt into one affordable loan. What should we do? Should he take out another consolidation loan?
Answer
Firstly, it's important your boyfriend carefully considers whether or not to take out a further consolidation loan because it could result in further debt and large repayments that are hard to meet. There are other, cheaper solutions that may be open to him. These may take much longer to repay, but in the end he will have more control of his out-goings to his creditors. It's important he gets further advice and information about these options from an organisation like his local Citizens Advice Bureau (CAB), National Debtline on 0808 808 4000 or the Consumer Credit Counselling Service (CCCS).
In the short term, you might want to make sure that none of the debts are in joint names as you could be liable for those. In addition, because you're living with him, it's important you make sure your rent and council tax are paid, if they aren't, you could end up without a home. To help ensure you can do this it might help for you to work out a budget you can both stick to.
Updated: 12/04/2010
Question answered by CAB
