Struggling with debt? Ask a debt advisor a question

Dannii75 wrote: »

Hi,

Can I get some advice please?

I have debt credit cards & the interest rates are battering me so I'd like to do something else! Details are:
£4853 in Barclaycard Visa @ 26.9% :mad: paying £152 pcm
£3925 on Virgin @ around 19.4% paying £65 pcm. (different rates for different amounts)
£925 on HSBC cc paying £24 pcm

Just moved address & registered on the electoral roll last week (not sure
how long it takes to appear on that).

I earn £25k.
I have a Capital One card with nothing on it but £19k available credit but 19.9% int rate.

I also have a motorbike loan & pay £75 pcm.

What's the best thing for me to do?

Thank you

Dannii

Hi Danii,

Thanks for posting. It looks like you’re paying out a fair amount on credit at the moment.

The first suggestion I would make would be to not spend any more on credit. Having money available on a credit card can be very tempting but if you’re struggling with the debt that’s already there then getting that down should be priority. (sorry if I'm stating the obvious)

The other things that strikes me is that your payments seem fairly low compared to the balances on your debts. This will more than likely mean that your balances will not be coming down much, if at all.

The obvious solution would be to start paying far more to these debts every month, but that is easier said than done. If you're finding it a struggle to pay more than the minimums it is often a sign that you need some debt advice.

We can help you with this. The first thing to do is visit our online debt advice service Debt Remedy (http://www.stepchange.org/msehelp) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

Hope this helps.

James

john10001 wrote: »

In these difficult economic times in the early stages of a great decadal depression does it make sense to sign up for income protection insurance (ASU or U only), especially ahead of any possible IVA you may be considering applying for?

As I comprehend it, an IVA is an alternative to bankruptcy but not quite as severe, however if you ultimately default on any of the IVA payments you are essentially !!!!!!ed and they can put you into bankruptcy?

I have a reasonably secure job, albeit on a low income, but I am just considering if the situation for my employer ever changed in the future for the worst and they had to make reduncancies I potentially would be up a creek if I could not make an IVA payment at any point during that 5 year period? If so I am thinking that even just £20 or £30 per month to protect some of my income would offer a little security and safety?

What do you think of this? Do you believe income protection insurance (either full ASU or just U) is a good thing or a waste of money?

John

Hi John,

Thanks for posting. I think with these sorts of policies they feel like a waste of money right up to the point you make a claim on them, then they feel like a wise investment.

Whether it was a good idea would depend on a few things, such as how much it costs, whether it would provide enough income to get by, what benefits you could claim if you were out of work, whether your creditors would accept this spending in a budget on an IVA.

So bascially it's hard to say if such a policy would be worthwhile. An Independent Financial Advisor would be able to give you a better idea about what options are available and if it would be useful for your situation.

Obviously most people on IVAs don't have this sort of cover. If you were to lose your job while on an IVA it is usually possible to get a brief break from payments while looking to get back into employment. We've a blogpost about what happens if you're finances change during an IVA: http://moneyaware.co.uk/2012/08/what-if-my-circumstances-change-during-my-iva/.

If you are considering an IVA we can give you advice. We can do this online with our advice tool Debt Remedy (http://www.stepchange.org/msehelp) or you could give us a call (http://www.stepchange.org/Contactus.aspx).

Hope this helps.

James

Sharon-andrew wrote: »

hello i am in a debt management owing £14.000+ i have had a phone call telling me that the resolve company can reduce my debt by 70% is this true..am i being foolish is going with this company please advise....

Hi Sharon,

Welcome to the forum.

As a general rule with debts, if something sounds too good to be true, it is. I don't know much about this company but there are many people out there who makes fantastic claims but often aren't offering anything you couldn't find elsewhere for less money.

It's hard to say exactly what they are suggesting, but it may well be an IVA (though it's usually less than 70% that gets written off). These can be a reasonable debt strategy but don't suit every situation.

If a company is cold calling you trying to get your business then it's usually a sign that they are looking to make money off you, so I would advise being very cautious.

I would also suggest that you get some advice from us and we can talk you through all the various ways you can sort out your debts. Because we're a charity we'll give you impartial advice about what suits your situation.

You can get advice from us online by using our Debt Remedy tool (http://www.stepchange.org/msehelp) or you can speak to us over the phone (http://www.stepchange.org/Contactus.aspx).

Hope this helps.

James

I_will_win wrote: »

i am considering going thro a DMP with payplan, I have some large debts and some small debts, What way is the money I pay distributed amoung them?? Also if i came into a lump sum of money ie a bonus etc Can I Offer to pay off a small debt by foning them or do I go through Payplan, I have seen people posting on here saying about full or part settlement?? Any advice would be great. Thanks

Hello,

Payplan will be able to confirm this for you, but Alice in her post above said she asked them and they said the monthly payment is divided up proportionately based on the outstanding balance of each debt.

As for lump sums, I'm afraid I don't know what Payplan's policies are. If you were on a DMP with us then we'd ask you to call us and then look at which option would suit you best.

Thanks for posting.

James