Struggling with debt? Ask a debt adviser a question

joeysmum · 27 January 2017 at 2:47PM

Well, where to start. I have a house, worth about 450k, a mortgage of 100k, all up to date with payments. However, we have about 35k debt on credit cards and a 14k unsecured 0% loan. Payments on the credit cards are high and I estimate that we pay about 1,400 a month on these debts. The mortgage is 1,050 a month, plus the usual bills which are all up to date.

I am falling behind with the credit card payments on one card and I know this has defaulted. However I am now too frightened to open the statements and letters that come in about this - total owing on that is 2,200 - so not massive compared to a 10k one which is up to date but has 250 a month repayment. The 0% loan is with another bank who are very understanding but have issued a final demand which they aren't acting on and I am meant to call them today. I have completed a budget planner with what I think we spend, but obviously paper figures and reality don't seem to match. We have had all sorts of problems over the last year and most recently my husband faced the sack due to a disciplinary at work. he wasn't sacked so now I feel I can concentrate on sorting this mess out. I should add he doesn't actively participate in sorting this out, so we are both to blame really. We earn between us about 54,000k per year and yet we still have not a penny in savings.

What can I do. I have a bag of unopened letters here with me and I go into a cold sweat even if I think about them. My husband would be against any payment plan and I'm not keen to move to free up capital that way. We have grown up children, one of which is at home and does pay into the pot for housekeeping.

Anyone got a magic wand to make this all go away - what do I do? I am beginning to feel physically sick even thinking about it.

StepChange_Rachael · 30 January 2017 at 10:24AM

Hi

Thanks for your post.

Unfortunately there's no magic wand but there is help available so that you can explore the best way forward to deal with the debts.

I know it can be difficult to face the debts and finding a way forward can be the hardest part, but ultimately if nothing is done then the creditors are highly likely to take further action to reclaim the debt.

Once debts default and nothing is in place with the creditors then they are more likely to go through the court to set a payment, defaults on county court judgements (CCJs) mean the creditors can ask the court to take further action such as securing debt to assets such as a house, enforcement agents or an attachment of earnings.

By doing something proactive at this stage it greatly reduces the chances of further action by the creditors and you can explore your options with an advisor who’ll give you impartial and free advice.

It’s important to remember you’re not alone in dealing with the debts and creditors, support and help is available whenever you’re ready.

You can find a link to our website here if you’d like to get in touch.

Take care,
Rachael

joeysmum wrote: »

Well, where to start. I have a house, worth about 450k, a mortgage of 100k, all up to date with payments. However, we have about 35k debt on credit cards and a 14k unsecured 0% loan. Payments on the credit cards are high and I estimate that we pay about 1,400 a month on these debts. The mortgage is 1,050 a month, plus the usual bills which are all up to date.

I am falling behind with the credit card payments on one card and I know this has defaulted. However I am now too frightened to open the statements and letters that come in about this - total owing on that is 2,200 - so not massive compared to a 10k one which is up to date but has 250 a month repayment. The 0% loan is with another bank who are very understanding but have issued a final demand which they aren't acting on and I am meant to call them today. I have completed a budget planner with what I think we spend, but obviously paper figures and reality don't seem to match. We have had all sorts of problems over the last year and most recently my husband faced the sack due to a disciplinary at work. he wasn't sacked so now I feel I can concentrate on sorting this mess out. I should add he doesn't actively participate in sorting this out, so we are both to blame really. We earn between us about 54,000k per year and yet we still have not a penny in savings.

What can I do. I have a bag of unopened letters here with me and I go into a cold sweat even if I think about them. My husband would be against any payment plan and I'm not keen to move to free up capital that way. We have grown up children, one of which is at home and does pay into the pot for housekeeping.

Anyone got a magic wand to make this all go away - what do I do? I am beginning to feel physically sick even thinking about it.

annabanana17 · 30 January 2017 at 2:27PM

Hello. I have been out of work for some time and am scrambling for a job. I am behind with some of my cc bills. Cap1 has been brilliant but I have received a letter from MBNA saying they are closing my account. I owe £14k on it. I was making minimum payments until last month. I am wondering what they next steps are? Will they send a debt collector to me? I have asked if I can enter into a DMP with them but they have refused. What should my next steps be? In addition, I received a letter from them about 6 months ago saying I had PPI with them. I have mislaid the letter - should I call them and see if any amount can be applied to my outstanding debt? Thank you

StepChange_Allen · 1 February 2017 at 10:07AM

annabanana17 wrote: »

Hello. I have been out of work for some time and am scrambling for a job. I am behind with some of my cc bills. Cap1 has been brilliant but I have received a letter from MBNA saying they are closing my account. I owe £14k on it. I was making minimum payments until last month. I am wondering what they next steps are? Will they send a debt collector to me? I have asked if I can enter into a DMP with them but they have refused. What should my next steps be? In addition, I received a letter from them about 6 months ago saying I had PPI with them. I have mislaid the letter - should I call them and see if any amount can be applied to my outstanding debt? Thank you

Hello Anna

Welcome to the forum and thanks for posting.

Your credit card terms and conditions will state at what point the agreement will be terminated by the company - it's usually 3 months - so I'm surprised if MBNA are closing your account after just one missed payment. If they do end your agreement it means a number of things happen or become a possibility:

1. A default will be put on your credit file and will stay there for 6 years. This will affect your credit rating.
2. MBNA might pass the debt onto a debt collection company or sell the debt to a third party. Nothing really changes in either situation other than who you negotiate payment and deal with.
3. Further action can be taken, for example a county court judgment (CCJ). If you own a house, they could then place a charging order on your property, and if you don't pay what you're ordered to on the CCJ (you do get the chance to offer an affordable payment), further enforcement can be used. Please see this page on our website for more detailed information on the debt collection process and what creditors can do.

Regarding the PPI, you can put a claim in if you feel it was mis-sold. This isn't something that we advise on as it's not our area of expertise, but Martin Lewis always advises to claim yourself and don't use a company to do it. For more details please have a look on the main MSE site. If you do successfully claim PPI back, most commonly it's then deducted off the current balance.

If you'd like any advice regarding your debts, you're welcome to register with us free of charge. You can find details of how to get started on our website.

I hope this helps.

Allen

Wooders1997 · 1 February 2017 at 12:48PM

Hello I'm in need of a bit of advice,

I'm 19 and currently in full time employment living at home, however I lost my previous job back in April 2016 and had a few bad debts that I know have affected my credit score.

My Lloyds Bank card expired today and I haven't been sent a new one, I had called them up and asked how to solve it and was directed to go into my local Lloyds branch. So I went there and spoke to the branch manager, added and changed some of the dated details on my account and tried to get a new card sent out to me.

I'm unable to get a new card as I have some outstanding payments with my bad credit score from last year. The manager handed me a leaflet and told me to sign up to Experian or any other credit report service. I've tried to sign up but I'm required to enter my card details and the details I have can't be accepted because it's past the expiration date. I called Experian and asked about any other ways around it and they have directed me back to the bank.

I'm really unsure on what to do and how to sort my finances out, because I appear to be going around in circles.

Any help would be greatly appreciated.

StepChange_Allen · 1 February 2017 at 1:46PM

Wooders1997 wrote: »

Hello I'm in need of a bit of advice,

I'm 19 and currently in full time employment living at home, however I lost my previous job back in April 2016 and had a few bad debts that I know have affected my credit score.

My Lloyds Bank card expired today and I haven't been sent a new one, I had called them up and asked how to solve it and was directed to go into my local Lloyds branch. So I went there and spoke to the branch manager, added and changed some of the dated details on my account and tried to get a new card sent out to me.

I'm unable to get a new card as I have some outstanding payments with my bad credit score from last year. The manager handed me a leaflet and told me to sign up to Experian or any other credit report service. I've tried to sign up but I'm required to enter my card details and the details I have can't be accepted because it's past the expiration date. I called Experian and asked about any other ways around it and they have directed me back to the bank.

I'm really unsure on what to do and how to sort my finances out, because I appear to be going around in circles.

Any help would be greatly appreciated.

Hello

Welcome to the forum and thanks for posting.

Yes, when you look to sign up to a credit reference agency they ask for your current card details to check your identity, so if you can't provide any, they're unlikely to open you an account. A possible way to solve this would be open a new account elsewhere and then you'd soon have an active card to use for this purpose. If your credit rating isn't the best and you have a few debts, a basic bank account might be the best option. I'd also recommend to choose a bank you have no debts with in order to avoid future problems.

If you'd like some free help and advice regarding your debts, you could register with us, details of how to get started are on our website. We would need to know how many creditors you have and the balances, so if you need the credit report to get these, it's be good to do that first.

I hope this helps.

Allen

sugarfreefarm · 1 February 2017 at 10:12PM

i had a payday loan with Toothfairy. I havent heard from the company for 3+ years and now a company called advanced collection systems are ringing me to recover the old debt. Are they empowered to recover the old debt please is anyone has any information it would be much appreciated.

steve811 · 2 February 2017 at 11:37AM

Hope someone can help here! I have an old debt with JD Williams (home shopping) that was passed to Lowell solicitors on the 20/12/2012. The loan was defaulted some time before that and I am sure we are coming to the end of the 6 years from the last payment. Today I received a claim form from MCOL and I need to know what is the best way to proceed? Do I request details from JD Williams regarding the account, or from Lowell? What is the best way of defending the claim (it contains some money relating to a PPI scheme which we were unable to use)?

StepChange_Rachael · 3 February 2017 at 10:22AM

Hi

Thanks for your post.

Once the contractual payment to a creditor has been missed or a reduced payment made, the creditor will at some point default the debt, this means the creditor can take further action to collect the debt. One of these options is to pass the debt to a collections agency.

This can be months or years after the debt has defaulted. It’s important when this happens to ask the collections agency for the details of the debt. They should have the original agreement and information of any payments made as evidence of the original debt and that they are now authorised to collect for the debt.

Passing a defaulted debt to a collections agency is normal collections procedure and they are legally entitled to do this.

If you need help to find a way forward with any debts you have or would like any further advice on how to deal with creditors you can find our contact details here for impartial and free debt advice.

Hope this helps.

Rachael

sugarfreefarm wrote: »

i had a payday loan with Toothfairy. I havent heard from the company for 3+ years and now a company called advanced collection systems are ringing me to recover the old debt. Are they empowered to recover the old debt please is anyone has any information it would be much appreciated.

StepChange_Rachael · 3 February 2017 at 1:08PM

Hi

Thanks for posting.

It can be difficult defending a County Court Judgement. To defend the debt you’d need to respond the MCOL with a reasonable defence.

If you believe the debt to be Statute Barred under the Statute of Limitations Act then this could be a reasonable defence. A debt would be Statute Barred if it falls under the consumer credit act and you’ve made no acknowledgement of the debt or payments within a 6 year period.

This would stop a debt being sent through the County Court but doesn’t write of the debt and the creditor can still contact you to request payment.

It’s not uncommon for a creditor to take a debt through the court just before the 6 years are up to secure a payment before the debt is Statute Barred.

The collections agency should have details of the debt and be able to send you the details including a record of any payments made.

If you believe you have PPI outstanding then you can contact JD Williams directly to find out how to make a claim, however it’s unlikely to stop the County Court Judgement claim going forward.

If you decide to defend the claim you’d need to complete the defence part of the claim form. You can ask for more time to form the defence. Here you can find details on completing a county court claim form.

When defending a claim it can be useful to get some legal advice first.

Thanks
Rachael

steve811 wrote: »

Hope someone can help here! I have an old debt with JD Williams (home shopping) that was passed to Lowell solicitors on the 20/12/2012. The loan was defaulted some time before that and I am sure we are coming to the end of the 6 years from the last payment. Today I received a claim form from MCOL and I need to know what is the best way to proceed? Do I request details from JD Williams regarding the account, or from Lowell? What is the best way of defending the claim (it contains some money relating to a PPI scheme which we were unable to use)?

Struggling with debt? Ask a debt adviser a question

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