Struggling with debt? Ask a debt adviser a question

Lam39 · 7 July 2017 at 11:51AM

Hi,

My husband and I purchased our first home in June of last year and managed to do so retaining about £4000 in savings. We underestimated how much things would cost to do up and how much more furniture we would need (coming from a small flat to a 3 bed house!). Since then we've spent what we had in savings and put a lot on the credit card/store cards.We managed to consolidate a lot of this into a loan which we are now paying back but we still have the following:

Store card 1: £600 (made up of various Buy no pay laters, £400 due in sept and £200 due next year)
Credit Account with Store: £435
Credit card 1: £1850 (limit £2000)
Credit card 2: £300 (limit £2000)
Overdraft 1: £300 (limit £390)
Overdraft 2: £175 (limit £200)
Overdraft 3: £100 (limit £150)

As you can see these all add up, and we appear to be ineligible for further lending so a balance transfer would not be an option. My husband works full time and I don't work, we don't have any children. I'm not sure what the best approach is to paying this off. We only have £200 in savings and at the end of each month we are only left with around £275 after all our bills and loan payments etc. go out. My husband is applying for a temporary promotion for 6 months which would give us an extra £430 per month were he to get it.

Please could we have a little advice on how to move forward? Many thanks for your time.

L

colemnic · 7 July 2017 at 1:44PM

Hi lauded experts!!

I'm hoping you can help me with a credit card debt matter that I've been working on recently ... I had got advice from another forum but seems it's now closed even though the steps advised and taken had worked to date.
Here's a quick summary of what's happened ... now I really need help on what to do next!

1. 26/04/2017: received a N1SDT claim form from County Court Business Centre, Northampton which details the claimant as Hoist Portfolio Holding 2 Ltd and also Howard Cohen And Co, Leeds (assume solicitors).!
This is related to a debt for Barclaycard of £11k which was originally taken out approximately 3 or 4 years ago.
2. 04/05/2017: Acknowledge Service with intention to defend within 14 days
3. 04/05/2017: Sent CPR 31.14 to solicitors
4. 04/05/2017: Sent a request for a copy of the agreement under Section 77-79 of the Consumer Credit Act to the claimant
5. 25/05/2017: Defence Submitted & Received
6. 29/06/2017: DQ sent to me

StepChange_Allen · 7 July 2017 at 4:52PM

Lam39 wrote: »

Hi,

My husband and I purchased our first home in June of last year and managed to do so retaining about £4000 in savings. We underestimated how much things would cost to do up and how much more furniture we would need (coming from a small flat to a 3 bed house!). Since then we've spent what we had in savings and put a lot on the credit card/store cards.We managed to consolidate a lot of this into a loan which we are now paying back but we still have the following:

Store card 1: £600 (made up of various Buy no pay laters, £400 due in sept and £200 due next year)
Credit Account with Store: £435
Credit card 1: £1850 (limit £2000)
Credit card 2: £300 (limit £2000)
Overdraft 1: £300 (limit £390)
Overdraft 2: £175 (limit £200)
Overdraft 3: £100 (limit £150)

As you can see these all add up, and we appear to be ineligible for further lending so a balance transfer would not be an option. My husband works full time and I don't work, we don't have any children. I'm not sure what the best approach is to paying this off. We only have £200 in savings and at the end of each month we are only left with around £275 after all our bills and loan payments etc. go out. My husband is applying for a temporary promotion for 6 months which would give us an extra £430 per month were he to get it.

Please could we have a little advice on how to move forward? Many thanks for your time.

L

Hi there

Thanks for posting and explaining the situation.

I'm sure there's a solution to this problem to get out of the debt situation you're in. We can only guarantee giving the best possible accurate advice with a full overview of your financial situation. We can then assess whether you need a debt solution or if you could manage these current debts in a different way.

You can register with us free of charge; all our contact details to register on the phone or online can be found here: www.stepchange.org/Contactus

I hope this is helpful.

Allen

Desperadoo · 7 July 2017 at 10:09PM

StepChange_Rachael wrote: »

Hi

Thanks for getting in contact.

A debt solution such as a debt management plan (DMP) should be based on what is affordable to offer the creditors after you’ve paid your household bills and general living costs.

Household and general living costs take priority over unsecured debts and a budget should always be based on what your essential living costs are. Then what is left over can be used to work out the best debt solution for you.

Where you can realistically cut back on household expenditure to help pay back the creditors sooner this is beneficial.

The creditors expectations for spending is based on something called the common financial statement. This shows average spending for households of various sizes. If your spending is outside of these averages it can make it less likely they will agree to accept reduced payment plans. The common finanacial statement isn't accessable to the public and as far as i'm aware there isn't a publically accessable list.

Our Debt Remedy tool, which is free and anonymous, works on averages for your household and will flag up any areas that are outside the averages creditors, would expect to see.

Debt Remedy can be used as a guide to building a realistic budget and to see if any areas of expenditure may be questioned by the creditors.

I hope this helps.

Thanks
Rachael

thanks will have a look at the site

StepChange_Allen · 10 July 2017 at 12:08PM

colemnic wrote: »

Hi lauded experts!!

I'm hoping you can help me with a credit card debt matter that I've been working on recently ... I had got advice from another forum but seems it's now closed even though the steps advised and taken had worked to date.
Here's a quick summary of what's happened ... now I really need help on what to do next!

1. 26/04/2017: received a N1SDT claim form from County Court Business Centre, Northampton which details the claimant as Hoist Portfolio Holding 2 Ltd and also Howard Cohen And Co, Leeds (assume solicitors).!
This is related to a debt for Barclaycard of £11k which was originally taken out approximately 3 or 4 years ago.
2. 04/05/2017: Acknowledge Service with intention to defend within 14 days
3. 04/05/2017: Sent CPR 31.14 to solicitors
4. 04/05/2017: Sent a request for a copy of the agreement under Section 77-79 of the Consumer Credit Act to the claimant
5. 25/05/2017: Defence Submitted & Received
6. 29/06/2017: DQ sent to me

Hi there

Welcome to the forum and thanks for posting.

As you'll know by now, the process for defending a claim isn't easy. From what you've explained the next stage is for you (and the claimant) to fill in and return the Directions Questionnaire (DQ).

An important thing to be clear on is whether you've received the N180 or N181, which determines whether you're going through the Small Claims Track or Fast Track. The process is a little more straightforward if it's the N180, but if it's the N181 it means you'd be liable for the creditor's legal fees if you lose the case. Because of that, if you have the N181 we'd advise seeking legal advice at this stage.

If it's the N180, then you'd fill in the form in the following way:

A - Settlement/Mediation - tick 'Yes' - mediation is free for small claims, and if both you and the creditor agree it's likely to be cheaper and quicker to resolve this way instead of needing a hearing.

B - Complete your contact details

C - Track - tick 'yes'

D - About the hearing - In D1, write your nearest court and state "This is my local court and the hearing should be here to ensure I can afford to attend and both parties are on equal footing (CPR 1.1(2)(a))"

The directions questionnaire should be sent with any supporting documents back to the court, ensuring it arrives before the stated deadline.

Please contact the creditor again to try and resolve the matter direct without need for the hearing, sending a copy of the N180 and any supporting documents to the creditor.

Should you resolve the dispute before the hearing, please let the court know straight away.

If not resolved still, once the court has the DQs back from both of you, a hearing will probably result and you'll be informed of this in writing.

I hope this helps. Should you require anything further please let us know.

Allen

100kdeep · 11 July 2017 at 11:20AM

Hi experts
I'm considering a dmp with step change I have 80k of credit card debt split between 8 accounts
And 12k of loan left
All credit is on promotional rates like 4.9 apt or 0 Apr the loan in 7 Apr
Because of circumstances and job being commission based. Which has no gauartees my payment would only be around £500 a month (0.5 percent of debt per creditor a month) ,17 years to clear debt.
The creditors are
Mbna x 2
Barclay card x 2
Hsbc
Tesco
Tesco loan
Nationwide
RBS
Would these creditors agree to freeze interest because even if they only charged 6 Apr my payment wouldn't even cover the interest?
I can't do an iva because my basic wage doesn't cover normal living expenses and commission veries a lot . Ie one month take home could be 1700 next could be 3000.
Also my job could be at risk if I was made insolvent.
Just wondered if anyone could answer on these creditors ?
I know 17 years is a long time but I would rather treat it like an extra mortgage. I'm 35 so debt would be clear by 50 as circumstance will improve when my wife goes back to work full time and kids go to school (No child care)

If I enter a dmp and creditors don't agree to freeze interest I would be adding £1200 a month interest charges as I would be breaking the promotional terms

colemnic · 11 July 2017 at 12:44PM

StepChange_Allen wrote: »

Hi there

Welcome to the forum and thanks for posting.

As you'll know by now, the process for defending a claim isn't easy. From what you've explained the next stage is for you (and the claimant) to fill in and return the Directions Questionnaire (DQ).

An important thing to be clear on is whether you've received the N180 or N181, which determines whether you're going through the Small Claims Track or Fast Track. The process is a little more straightforward if it's the N180, but if it's the N181 it means you'd be liable for the creditor's legal fees if you lose the case. Because of that, if you have the N181 we'd advise seeking legal advice at this stage.

If it's the N180, then you'd fill in the form in the following way:

A - Settlement/Mediation - tick 'Yes' - mediation is free for small claims, and if both you and the creditor agree it's likely to be cheaper and quicker to resolve this way instead of needing a hearing.

B - Complete your contact details

C - Track - tick 'yes'

D - About the hearing - In D1, write your nearest court and state "This is my local court and the hearing should be here to ensure I can afford to attend and both parties are on equal footing (CPR 1.1(2)(a))"

The directions questionnaire should be sent with any supporting documents back to the court, ensuring it arrives before the stated deadline.

Please contact the creditor again to try and resolve the matter direct without need for the hearing, sending a copy of the N180 and any supporting documents to the creditor.

Should you resolve the dispute before the hearing, please let the court know straight away.

If not resolved still, once the court has the DQs back from both of you, a hearing will probably result and you'll be informed of this in writing.

I hope this helps. Should you require anything further please let us know.

Allen

Hi Allen, thanks so much for this. It is in fact the N181 that I've received with notification of Fast Track.
Can you give me some more info on where to get advice on this and what the best next steps are?

Thanks

StepChange_Kirsty · 11 July 2017 at 2:51PM

Hi,

Thanks for your post.

When it comes to debt management plans (DMP) we can never guarantee that the creditors will agree to freeze interest and charges. This is because the DMP is an informal arrangement with the creditors and they are not legally bound to freeze interest and charges and not take any further action. However, in our experience where a DMP is an appropriate solution, creditors will often agree to freeze interest and charges to prevent further financial difficulty.

First of all we need to make sure that the DMP is a solution which is right for your circumstances and to do this we need to you to complete a budget with us.

There are a couple of ways you can do this. This easiest way is by using our online Debt Remedy tool where you can input details of your income, expenditure and list of creditors. From this Debt Remedy will provide you with advice in the form of a personal action plan.

Alternatively, if you’d prefer to speak to us over the phone, you can contact us and have a debt advice session with one of our specialist advisors.

I hope this information helps and we look forward to hearing from you soon.

Kirsty

100kdeep wrote: »

Hi experts
I'm considering a dmp with step change I have 80k of credit card debt split between 8 accounts
And 12k of loan left
All credit is on promotional rates like 4.9 apt or 0 Apr the loan in 7 Apr
Because of circumstances and job being commission based. Which has no gauartees my payment would only be around £500 a month (0.5 percent of debt per creditor a month) ,17 years to clear debt.
The creditors are
Mbna x 2
Barclay card x 2
Hsbc
Tesco
Tesco loan
Nationwide
RBS
Would these creditors agree to freeze interest because even if they only charged 6 Apr my payment wouldn't even cover the interest?
I can't do an iva because my basic wage doesn't cover normal living expenses and commission veries a lot . Ie one month take home could be 1700 next could be 3000.
Also my job could be at risk if I was made insolvent.
Just wondered if anyone could answer on these creditors ?
I know 17 years is a long time but I would rather treat it like an extra mortgage. I'm 35 so debt would be clear by 50 as circumstance will improve when my wife goes back to work full time and kids go to school (No child care)

If I enter a dmp and creditors don't agree to freeze interest I would be adding £1200 a month interest charges as I would be breaking the promotional terms

StepChange_Kirsty · 11 July 2017 at 3:13PM

Hi,

Thanks for your response.

As your case has been allocated to the fast track, this suggests that the claim is for more than £10,000 or it's complex. In fast track cases, whilst mediation is likely to be cheaper, it is not free so I would definitely suggest seeking independent legal advice at this stage.

There is a guide on the Court’s website which explains in more detail how the fast track process works and what to expect next. You can find the leaflet here. Whilst this is a very useful guide, it should not replace seeking specialist advice for your individual case. The government website contains useful information about where to get further advice.

I hope this helps. All the best.

Kirsty

colemnic wrote: »

Hi Allen, thanks so much for this. It is in fact the N181 that I've received with notification of Fast Track.
Can you give me some more info on where to get advice on this and what the best next steps are?

Thanks

haelen · 11 July 2017 at 4:42PM

Hi,

I'm self-employed, and was made redundant at the beginning of March, and am currently receiving JSA.

I have a small (in the scheme of things) number and amount of debts as follows:

Tax Credit overpayment: £1460
Leeds Credit Union Loan £700
Self Employed Tax payment on account £1200 (coming due 31st July)
Capital One Credit Card £1250

I have ban overdraft of £1500 (this has been the established amount for some years.)

At this stage, I'm thinking of asking Capital One to make a payment plan (despite interest still accruing) and the same with HMRC re: self-employment Tax.

I already have repayment plans with both Leeds Credit Union and HMRC for Tax Credit overpayment.

Any advice or recommendations would be most welcome.

Best,
T

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