Struggling with debt? Ask a debt advisor a question

ShinyShoes wrote: »

Hi, this last year has been difficult. Hubby was redundant for 6 months, I've just had a baby, plus we had borrowings before all this happened! Yesterday I added up all loans, and credit cards and overdrafts in my name and was shocked that it comes to £22,000. It's in my name as hubby has bad credit rating and at this rate I'll be the same too! I also need to borrow £3,000 to get a 5 door car as my 3 door is no longer practical with a baby.

I'm not sure what the best thing to do is. Should I get a loan for £25,000 over 5 years? Would I get turned down for this because of the loans and credit cards even though they are going to be repaid?

I also noticed on a credit report that I'm not on the electoral roll, this puzzles me as we got a voting card for the police thing. I'm going to send off the form and wondered how long it takes to go on my credit file and if it's a problem at the moment.

I'm going back to work soon, and have childcare costs to pay. However, due to level of earnings will not qualify for tax credits etc even though I could really do with the help.

I've done some budgeting, and our income only just covers bills and shopping, however if I go back 4 days a week there is a chance I'd have £500 per month to allocate to debts.

I really don't want to borrow any more, in my profession I can't go bankrupt or I lose my qualifications. I'm getting quite depressed about it all as I feel like I've been playing a game and am about to get the Game Over message come up.

Any hints and tips would be great.

Hi there, Shinyshoes

I’m really sorry to hear that you both have been struggling lately. It certainly sounds like you would benefit from some confidential debt advice.

In regards to the £25k loan, be aware that consolidating your debts in this way can make things more difficult. The interest can be much high on a consolidation loan, sometimes even higher than your present debts combined.

I'd also advise you to take some advice before borrowing more money to buy the car.

As for your credit file not mentioning that you’re on the electoral roll, you can usually get this amended if you get in touch with a credit reference agency (which you have done). If you’re receiving voter cards, then you should be on the electoral roll already.

I would consider getting in touch with us so we can have an in-depth look at your finances. We’re a free debt advice charity and we can have a look at what debt solution is best for you long-term.

You have already explored your finances which is great. It means you’re doing your best to make sense of your expenditure. We can help you further in putting together a budget that’s both realistic and reasonable for you.

To get free debt advice in just 20 minutes, you can use our online advice service Debt Remedy. It’s completely anonymous and you can save it for another time if you can’t finish your session in one go. http://www.stepchange.org/msehelp


If you would prefer to have a chat with an advisor, call us on our free Helpline – 0800 138 1111. We’re open Monday to Friday 8am to 8pm. We’re also open on Saturdays between 9 am and 3pm.

Best wishes


Rachel

houseiseverything wrote: »

I hope you can help me! My partner is doing a self managed DMP. All the debts are from his business which has now gone into liquidation- it was a limited company but he used personal credit cards to fund the business, and also had to personally guarentee the company overdraft. The 2 credit cards have frozen interest and have agreed to the plan. However the bank the overdraft is with have refused, and say they will only accept and reduce interest if they put a charging order on our house. They have asked to see copies of our mortgage statements. When my partner guarenteed the overdraft he specifically said that he didn't want to secure anything against the house, and they stated to him that it was not secured against the house. He was not given an agreement, and can't even remember signing anything. We don't know what to do. We have asked to see the agreement which they say they have. Should he just keep paying what we worked out they should get if they had agreed to the DMP? Should he not pay anything until he sees the agreement? Should he complain to the ombundsman? is there anything we should be doing to?Looking on the forums I have not seen this situation exactly before. is it common that banks ask for charging orders in this way? even the (ex) business account manager says he doesn't understand why the collections people are asking for this. Thanks so much.

Hello,

I have heard of this happening before but it is quite rare. They are asking for a "voluntary charge" which is where you agree to let a creditor secure a debt against your house without the courts being involved.

Obviously you don't have to accept this request and most people in this position don't.

If you've requested a copy of the original agreement they should give you a response within 12 days. If they don't the debt is technically unenforceable until they provide you with it.

In terms of whether to make payments or not, if your partner knows this is definitely his debt and he owes the money then we would recommend making payments of whatever he can afford towards the debt, even if they don't agree with the amount.

I'm impressed that he's managing to organise his own DMP as this takes a fair bit of work. If ever he wants to talk about a free DMP with us he can get in touch (http://www.stepchange.org/Contactus.aspx).

All the best.

James

houseiseverything wrote: »

Thanks so much James. Do you know if this means they will definately take him to court if he doesn't agree to the order? If they take him to court will the consequences be worse?
I forgot to say in my first post that they have said they will reduce the interest if he allows the charging order, but if not they will charge full interest.
I feel very strongly that as they promised that the overdraft would not be guarenteed against the house they should not try to do this. Is this grounds for a complaint do you think?
Also, have you any idea why they would have picked him to do this to, as it is so rare? I feel that if I knew the reason I would be better equipped to deal with it!
I really appreciate any advice you can give, thanks.

Hello,

I'm afraid I can't think of an obvious reason they would be using these tactics for this debt in particular. If it was a particularly large debt that might be a reason.

They might want to go through the courts for a county court judgment(CCJ) to arrange a monthly installment for this debt but many creditors don't because the courts will look to set up affordable payments which are often less than what they want.

To get a charging order through the courts they would have to have a CCJ first, then they would request a hearing with a judge where you'd get a chance to try and defend it going through. It would only be worse in terms of the CCJ making your partner's credit rating worse. The debt might also have the court fees added too.

It is far from certain that they would take it to court though. You mentioned in your earlier post they've not yet provided a copy of the original agreement, so until they've sent that the debt isn't legally enforceable anyway.

Hope this helps.

James