Struggling with debt? Ask a debt adviser a question

Former_StepChange_Linsi · 17 February 2017 at 7:31PM

Hello

Welcome to the forum and thanks for your post.

You’ve certainly come to the right place to explore your options for debt management. There are many ways to deal with debt, so it’s really important to find the right way for you.

Moving the balance from your Barclaycard to MBNA would reduce the amount of interest you’ll be repaying, so long as you’re able to maintain the minimum payments to MBNA.

A consolidation loan isn’t something I would normally recommend. Whilst these loans tend to look good on paper, in reality they often involve higher interest rates, higher monthly payments and often make a situation worse. You can find more information about consolidation loans on our website.

Because you have to rely on your overdraft each month I think you’d benefit from receiving more in-depth debt advice by creating a budget online using our free Debt Remedy tool.

After putting a budget together you’ll be able to download your personal action plan. This contains your tailored advice about all the debt solutions available to you, along with our recommendations.

We’ll also let you know about any risks or consequences any solution may have, so that you can make an informed decision about the next steps. Here’s the link to our Debt Remedy tool.

I hope this helps.

Linsi

Lkhagerty88 wrote: »

Evening!

I am exploring my options for debt management. While my funds cover bills and repayments the progress feels terribly slow. I am trying to find if there are any further recommendations or quicker options.

I have:

£1000 overdraft that I end up at the bottom of every month. No savings. My pay goes into this account and tops the overdraft back up to positive, funds are used and I wind up back at -990.

£2786 on a barclay balance
transfer credit card. The limit was 8000 and I have gradually decreased this to £3000. The plan is to keep decreasing it. Repayment £80 pcm. Interest 18.5% currently about £15pcm

£4837 on an mbna balance transfer credit card, still in interest free offer on balance for approx another 30 months. Interest 18.5% apr. Limit increased by mbna to 8000. Paying minimum repayment at £46 pcm.

This was an accumulation of clearing the previous card, (balance transfer barclay to mbna) the debt built up by stupidly doing "money transfers" to my current account to get out my overdraft then not removing overdraft...falling back in again.

My question would be would it be wiser to keep these debt seperate and maybe juggle payment amounts, or combine the debts on to the mbna credit card and chop the other limits to maybe 100, or finally (least likely) try for a loan to consolidate. I think I could afford a max of 200 pcm to try pay funds back within 3 years. I don't want to do anything that may harm a potential mortgage in the future. I had considered something like payplan but the smaller repayments worries me.

Thank you for any thoughts or advice!

Former_StepChange_Linsi · 17 February 2017 at 7:36PM

Hi there,

Thanks for your post and welcome to the forum.

I’m sorry to hear about what’s happened and that setting up an affordable payment plan with giffgaff hasn’t been successful.

It’s worth checking the terms and conditions of the giffgaff account as this will explain what charges, if any, can be added when a person falls behind with their contractual payments.

Communication companies aren’t obliged to accept payment plans if someone falls behind with payments, but they should treat all their customers fairly.

If someone felt they’d been treated unfairly then I’d recommend making a complaint. The complaints procedure is available on the giffgaff website. If after 8 weeks the complaint hasn’t been resolved the next step would be to contact the Ombudsman Services: Communications, who may be able to help get things sorted.

Citizens Advice also has lots of consumer advice on their website which may be helpful, here’s the link. They also have a consumer helpline which can be contacted by phone or by filling out an online form. You can find their contact details here.

For more advice about repaying debts I’d recommend using our online Debt Remedy tool. It’s anonymous and free to use. The tool helps a person create a budget and then provides tailored impartial advice about the best way to manage their debts.

I hope this helps,

Linsi

Homegroup wrote: »

Hello,

Just wondered about rights a person may have if, they have an outstanding phone bill with GIFFGAFF, which started off as £35 pounds and now has been increased up to £201, due to monthly charges of £40 going onto the account.

This person has rang GIFFGAFF and arranged to make a payment plan but GIFFGAFF wouldn't accept anything less than the £40 a month. Are they able to do this and are they ways around them refusing a payment plan?

Many thanks.

muddyflumplepants · 20 February 2017 at 10:53AM

Good morning,
My partner got a weeks notice in probation period on Friday. He's in retail and the weeks notice with holiday owed does cover next months bills but from Friday, we have no income for April onwards.

Job searching is well under way, he's accredited and in a professional industry and should be able to concentrate on applications this week plus seeking temp work from a local agency.
Our mortgage company won't do a mortgage holiday but will make an arrangment for a few months - interest approx half our current payment.

We have £200 per month minimum credit card payment - barclaycard mostly plus tesco credit card.

My question is, will they make an arrangement without prejuice to bring down these payments? What effect does this have on credit for us in the future?

Thank you x

MarrenS · 20 February 2017 at 12:12PM

Hi I'm just wondering why I have a pension credit in my name I am only 26? This goes into my mums bank which I didn't know about until income support sent a letter with the amount I have to pay back from when I started claiming in 2008. I have had none of this money and I still don't get it so why are they deducting it from my universal credit I have 3 children and I can not afford it,
kind regards
Mrs Marren

StepChange_Kirsty · 20 February 2017 at 6:40PM

Hi there,

Thanks for your post.

I’m sorry to hear about your partner’s job situation. I hope he manages to find something new soon.

It’s good that your mortgage company has agreed to give you some flexibility during this difficult time. If your partner manages to find a job sooner than the few months they have given you, I would recommend getting back on track with your mortgage as soon as possible and pay extra to make up any arrears which may have accrued.

In terms of Barclaycard and Tesco, it makes absolute sense that these are the bills to try to reduce first. We call these your non priority debts and you should only pay these what you can afford.

I would recommend you get in contact with us so we can give you further advice about dealing with these credit cards. We can also help you to put a budget together to help you work out how much you can afford to pay on a monthly basis.

It’s difficult to say at this point if the creditors will accept the agreement or not but we can give you further advice on what to do if they don’t accept your offer when you call us.

Whenever you make reduced payments to your creditors, your creditors could look to start their collections process. Our website provides more information about how the process works but again we can explain this in more detail and answer any questions you have when you call.

We hope to hear from you soon.

Kirsty

muddyflumplepants wrote: »

Good morning,
My partner got a weeks notice in probation period on Friday. He's in retail and the weeks notice with holiday owed does cover next months bills but from Friday, we have no income for April onwards.

Job searching is well under way, he's accredited and in a professional industry and should be able to concentrate on applications this week plus seeking temp work from a local agency.
Our mortgage company won't do a mortgage holiday but will make an arrangment for a few months - interest approx half our current payment.

We have £200 per month minimum credit card payment - barclaycard mostly plus tesco credit card.

My question is, will they make an arrangement without prejuice to bring down these payments? What effect does this have on credit for us in the future?

Thank you x

StepChange_Kirsty · 20 February 2017 at 6:57PM

Hi Mrs Marren,

Thank you for your post.

I honestly don’t understand why you would have received pension credit when you are 26 and why this has been paid into your Mum’s account. Was your Mum herself entitled to pension credit at the time?

I would recommend contacting the Department for Work and Pensions (DWP) to find out what has happened here and why they have been paying you pension credit into your Mum’s account.

If it’s not clear what has happened when you’ve spoken to DWP or you need some further advice, I think you’d be best speaking to your local Citizens Advice Bureau who may be able to give you further help and advice in terms of disputing this debt.

I’m sorry we cannot be of more help on this occasion.

All the best.

Kirsty

MarrenS wrote: »

Hi I'm just wondering why I have a pension credit in my name I am only 26? This goes into my mums bank which I didn't know about until income support sent a letter with the amount I have to pay back from when I started claiming in 2008. I have had none of this money and I still don't get it so why are they deducting it from my universal credit I have 3 children and I can not afford it,
kind regards
Mrs Marren

AnnaMc8 · 22 February 2017 at 12:17AM

Hello,

I currently have 4 credit cards, a personal loan and an overdraft on my current account.
I need to get my debts in order and stop wasting money on interest.

I believe I should perhaps balance transfer my 2 credit cards (Santander and Ulsterbank) to one card with a lower rate and pay them off. Or perhaps a lower rate personal loan? I previously applied for another Tesco credit card and was declined as I don't believe my credit rating is great - shockingly....

Any advice appreciated.

Thanks!

Current Account
HSBC -1500 Overdraft - And will reach this by end of month (Just switched so this is 0% for 6 months and then I will get the £150 switching bonus)

Credit Cards
Santander -1106 Pay back 50 a month (18.9% APR I believe)
Ulsterbank -587 Pay back 30 a month (18.9% APR I believe)
Tesco -3400 Pay back 50 a month (0% period ends in March 2018)
Amex I pay this back in full each month

Graduate Loan
Ulsterbank -1336 Pay monthly 151.65 due to end November 2017

StepChange_Rachael · 22 February 2017 at 9:55AM

Hi

Thanks for your post and welcome to the forum.

I can understand your frustration when interest rates are high and it’s difficult to become debt free because of them.

If you’re managing to cover your household bills and general living costs and the minimum payments to the creditors without struggling then this is very positive position to be in.

Although as a Debt Advisors we don’t generally give advice on further borrowing, in this situation finding lower interest rates can greatly reduce the time frame of becoming debt free. If 0% interest isn’t an option due to being rejected then you may be able to transfer to cheaper forms of credit interest rates.

I’d suggest the MoneySavingExpert.come and look under cheap borrowing to get a good idea of your options. There is also a soft search you can do when applying for cheaper credit that won’t have a big impact on your credit file.

I’d suggest when maintaining the minimum payments to creditors and where there is extra to go towards the debts, then use this towards the ones with the highest interest rates to reduce these first.

I'd also suggest creating a budget and reducing any unnecessary monthly costs and using this towards the debts to reduce the interest and time frame for paying back the debts.

If at any point you feel you’re struggling with minimum payments to the creditors and keeping up with living costs then please do get in contact with us for free and impartial debt advice.

You can find our contact details here.

Take care.
Rachael

AnnaMc8 wrote: »

Hello,

I currently have 4 credit cards, a personal loan and an overdraft on my current account.
I need to get my debts in order and stop wasting money on interest.

I believe I should perhaps balance transfer my 2 credit cards (Santander and Ulsterbank) to one card with a lower rate and pay them off. Or perhaps a lower rate personal loan? I previously applied for another Tesco credit card and was declined as I don't believe my credit rating is great - shockingly....

Any advice appreciated.

Thanks!

Current Account
HSBC -1500 Overdraft - And will reach this by end of month (Just switched so this is 0% for 6 months and then I will get the £150 switching bonus)

Credit Cards
Santander -1106 Pay back 50 a month (18.9% APR I believe)
Ulsterbank -587 Pay back 30 a month (18.9% APR I believe)
Tesco -3400 Pay back 50 a month (0% period ends in March 2018)
Amex I pay this back in full each month

Graduate Loan
Ulsterbank -1336 Pay monthly 151.65 due to end November 2017

Vita_Brevis · 22 February 2017 at 10:23AM

Hello, this is my first post here.

I received a court summons last week, in respect of a Nationwide credit card debt from 6 years ago (almost, but not quite statute barred, sadly). The debt has been sold to a collection agency, so it is they who are taking me to court, not Nationwide. I do not dispute the debt - I was ill, buried my head in the sand and basically did a runner from my creditors. Not proud, but what's done is done - however, the original debt of £1300 is now just over £2000 after the addition of interest and fees.

My question is this - if I offer full and final settlement of the original debt amount of £1300, how likely is it to be accepted? I don't have that money spare, but could borrow it from family if needs be. Or is it too late now it's gone to court? The stress is making me ill again, and I just really want the whole thing resolved - especially as acknowledging this debt will no doubt open the floodgates to all my other creditors taking similar action.

Any advice will be gratefully received.

Salvaticus · 22 February 2017 at 12:26PM

Good luck to you @Vita Brevis! I hope you get the advice you need and a good resolution. Whilst I can't give you advice myself, try not to let it get you down in worrying you. Acknowledging it now and seeking advice before you take any action is (IMO) definitely the best thing to do, it's a positive step. Good luck to you!

Struggling with debt? Ask a debt adviser a question

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