Struggling with debt? Ask a debt advisor a question

unsound_methods wrote: »

Hi People!

1st time post so go easy on me!

Right why I'm here is this:

I'm currently about £20,000 in debt to various lenders. They all defaulted in 2010 and to be honest I haven't done much since then to sort it. I was out of work so just got used to the idea of letters & phone calls coming through. The people I owed money to haven't really tried that hard to get me to pay.

Ok, so here we are in 2014 - I'm now after a mortgage (which my IFA has got me on a great rate - I just have to pay a 15% deposit) all fine there! Until yesterday, one of my lenders sends a CCJ notice for immediate payment of £714. Totally out of the blue, its been in arrears for 4 years.

My Question is, by applying for a mortgage have I just opened the floodgates on my credit file for all my other lenders to see and therefore present me with more CCJ's? By creating this activity have I angered the wasps nest? Will I get more now from other Companies?...

I can sort this £714 one out but the others at £5000, £2500, etc I cant, the good lady and I have a baby on the way and this could be a major stop to our plans.

On a side note my IFA said if they haven't chased you that much over the 4 years keep going for 6 and you'll be debt free!... Here's hoping.

Hi there,

Thank you for getting in touch with us.

It’s quite common for debts to sit dormant for years and then suddenly ‘spring to life’ down the track. Your creditors have to update your credit file at least every six weeks with new balances, payments made, if the debt gets passed to a collection agency etc. It’s quite possible that some of your creditors have seen that you’ve applied for a mortgage and have decided to pursue their debt with you on the belief that you have available funds to pay them.

If I’m honest, I would say that your IFA was a bit irresponsible in their advice to you. By recommending the six-year period for you to ‘keep your head down’ as it were, they’re referring to what’s known as the Limitation Act.

This is the legislation concerning the 6 year window that a creditor has to establish payment with you since the last time you paid them. If you went longer than 6 years without paying a creditor, and they had ample opportunity to contact you in writing but didn’t, but then tried to initiate a payment arrangement with you after the 6 years had passed, then the debt would be unenforceable under the Limitation Act. You would make them aware by sending them a statement headed ‘without prejudice’ and telling them that further contact would be deemed as harassment.

The Limitation Act does not apply however if the debtor has ignored all attempts by the creditor to arrange payment, or if that creditor takes the debt to county court. Once there’s a county court judgment lodged against you, the county court can pursue further enforcement such as bailiffs, attachment of earnings or applying a charging order to available equity on your property.

You can read more about Limitation Act here: http://moneyaware.co.uk/2011/08/your-debts-written-off-is-it-too-good-to-be-true/

We as a charity advise people to deal with their debts rather than avoid them. We give free and confidential advice and help you work out a solution to your debts that’s realistic and fair for all concerned. Our online advice tool Debt Remedy can advise you in just 20 minutes: http://www.stepchange.org/msehelp

Best of luck

Rachel

Notsosharp wrote: »

Hi,

I'm not really struggling to pay my debts but I am unhappy about having them. I was declared bankrupt in 2007 and I would really like to improve my credit rating so that one day I am able to get a mortgage (once I earn enough but that's a whole other thread!)

My debts are:

Vanquis Credit card : £1400
Very.co.uk : £165
Simply Be : £35
British Gas : £2000 (I'm not sure of the exact figure because I'm paying off what I owe them a bit at a time)

I don't earn very much (about £1300 per month) and my outgoings at the moment are £1015 so that leaves around £80 a week for food and everything else.

Is there anyway I can start to reduce those debts at all? I'm just looking for advice on where to begin really. I know it's not a lot of debt but it'll start growing if I'm not careful and I don't want it to.

Thank you in advance.

Hi there,

Thanks for getting in touch.

I think it would be a good idea for you to go through your budget with us. It's really important that you're able to stay on top of your most important bills (rent, council tax, utilities, food) before working out what you can realistically afford to your creditors.

We help thousands of people each month in very similar situations to the one you've described. We can help you too. When you get chance, please consider using our online advice tool Debt Remedy. It can help you work out a plan to take care of these debts for good: http://www.stepchange.org/msehelp

Best of luck,

Rachel

daydream_believer wrote: »

Hi, this is my first post, and would just like to say that reading other peoples experiences on here has helped me realise that I am not alone in the situation I am in, which I have really thought I was!! I have now got to the point that debt is insurmountable, and have to do something! It is due to a bad investment in a property in the US that was in terrible negative equity that has bled us dry trying to keep it hoping the market would improve...we have been having to use credit to pay normal things due to having to send money to pay for this property, and now have nothing left. I have been looking at the option of DMP or DRO through stepchange, but have lots of questions...

We currently live in EU, but have maintained a postal address in UK, which is my parents. Will we be accepted for a DMP or DRO as living abroad, and will it have any impact on my parents credit rating (really don't want this to happen!!).

DRO says debts need to be below 15,000. Is this total for me and OH, or individully.

Will the house in US be taken into account in either instance? We are trying to sell it, and will not be able to make any more mortgage payments on it after March.

As we currently earn an income in the EU not UK, will this be OK when working out our disposible income.

We are self employed, and our income is very erratic, so we would probably have to go worst case scenario, and pay extra as and when we can, is this possible?

I personally would rather go down the route of DMP, as I feel the need to be responsible for the mess we're in!
Any advice gratefully received!!

Hi there, thank you for posting.

It’s wonderful to hear that you’ve felt reassured by the posts you’ve seen here on the forum. It’s always a comfort to know you’re not alone in your problems and that help is available.
As you live abroad, you would not qualify for a DRO. However, we can still look into your options and see what else might be suitable for you.

Please don’t worry about your parent’s credit rating. They will not be affected simply for sharing the same postal address so long as the debts you have are not joint with them.

The house in the US does need to be taken into account as it is currently an active asset that you are making a payment on. Should the house be sold or repossessed, and there is a mortgage shortfall, you will need to seek advice on it from an American based debt advice service. Luckily, there are CCCS offices in every state that can give you this advice.

We advise hundreds of self employed individuals every month (both sole trader and limited company). All we need to do is take a good look at your budget.

Our online advice tool Debt Remedy can advise on what you’re best doing moving forward. You will need to put together a budget on Debt Remedy in order to do this but it should only take 20 minutes: http://www.stepchange.org/msehelp

Hope this helps

Best regards

Rachel

huskypup wrote: »

Hi

We are in a DMP with stepchange nearly there only another £24K to go:o. We get statements each month from all of our creditors and update balances monthly for Barclaycard as they are changing interest - not alot but some - there parogative they arent a charity and I borrowed money so happy to pay it back.

The one we are struggling with is Egg card x 2 which I believe was bought out by Barclaycard we have had no correspondence from them for over 2 years so we have no idea if interest is being charged. I have read on another page that they are legally bound to send an arrears notice every 6 months - have checked my files all other creditors do except Egg/Barclaycard, Barclaycard do for their own credit card but none for the ex Egg cards.

I have no contact details for them - when I had my review in dec the stepchange advisor suggested I write to the address I have for Barclaycard and ask them for a statement - but why should I have to do that when by law they are supposed to provide me with a statement and arrears notices.

Any advice xx

Thank you

Hi,

Well done on the progress of your DMP, glad to hear it’s going well.

Barclaycard did take over Egg credit cards yes. They should provide you with a statement which includes the final balance and recent payment history. Sadly though, if they’re not sending it to you, you may have to chase them up. Here is how to contact Barclaycard. Start by sending them an email.

I hope this helps.

Thanks,
Jess