Struggling with debt? Ask a debt advisor a question

Hi

Thanks for your post.

I can understand why you’d be eager to clear the debt as soon as possible with the large monthly payments. However as you’ve mentioned it would leave you in your overdraft then it’d be possibly just moving the debt from one creditor to another and not necessarily resolving the issue, especially if it would cause you to struggle with household bills and general living costs by doing this.

It’s always the best scenario where the minimum payments can be met and extra paid towards the balance to reduce the repayment time without it impacting payments to your essential living costs.

If you felt some of the refund could go towards paying a chunk off the loan but without causing you to go into your overdraft it might help alleviate the pressure and still reduce the term length without causing a further debt.

It’s worth checking the interest rate as this could help determine the best course of action. If there is no charge on your overdraft and you feel you’d be able to realistically repay it back then it could worthwhile choosing that option.

However, if you have debts other than the loan then it might be worth looking further into your options if repayments are a struggle.

For tailored debt advice, taking into account your full situation you can use our anonymous online Debt Remedy tool.

Take care,
Rachael

PoisonGirlSasa wrote: »

I am looking for your professional advice please? I have a loan which has £878.78 outstanding. Due to illness I wasn't making full payments for some of the loan term and whilst the repayments are now up to date and I am paying extra where I can each month the loan is now over it's term. I received a refund of solicitors fees this month totalling £576.05 which was an unexpected surprise. Do I use this extra money with some overtime hours this month to pay off this loan - total due would be £1026.78 due to legal fees? This would leave me in my £200 overdraft (I'd be using every penny on bills and bare minimum) for the next couple of months and things would be tight but I would be 1 loan down and wouldn't have to pay out £300.00 each month.

Or, do I keep the £576.05 to keep me out of my constant overdraft and continue to pay the £300 loan repayment each month until it is fully paid off?

I honestly, don't know what's best to do. I am not aware of the interest rate as I type this and don't know if it is better to continue to use my overdraft and clear the loan or vice versa.

Please help I am so keen to be debt free! Thank you in advance.

Hi

Welcome to the forum and thanks for your post.

When a debt goes through the court and a county court judgement (CCJ) is set the creditor then has further rights of collection.

Notes on your credit file normally will come off after 6 years but it doesn’t mean the debt has been cleared. The debt total left will still be outstanding and a creditor can still take further action to reclaim the debt at any point through the court.

This means the creditor if they decide to, can ask the court to send enforcement agents to reclaim the debt, set an attachment of earnings to take a monthly regular payment from an income. If you have a mortgaged property they could also look to secure the debt as a charging order. This means if the house was sold the debt would be paid from any equity from the sale first.

To prevent any further action from the creditor once a CCJ has defaulted then the debt would need to be sent back through the court to set an affordable payment arrangement. To do this a N245 form would need to be completed and there is a court fee of £50 for this. It’s possible to apply for help with the fee.

If you follow this link you’ll find more information on CCJs and a link to the N245 paperwork to download, also how to check if you can get a fee remission.

If you’d like to look at what options you have to deal with the debt now the IVA has failed we'd be happy to help discuss the best way forward for you.

You can find our contact details here.

I Hope this helps.

Rachael

sarahb101 wrote: »

Hi, I am looking for a bit of advice. Back in the early 2000s myself and my husband got ourselves into quite a lot of debt which we were managing to pay until our circumstances changed and we suddenly couldn't afford the minimum payments. One of our debts was a personal loan with Natwest for £23,000. The account defaulted in Feb 2011 and we were issued with a CCJ in May 2011. In August 2011 we entered an IVA. Unfortunately the IVA failed long before the term was up. It officially failed in March this year but had defaulted a couple of years before. Since the IVA failed earlier this year we have not been contacted at all for the money we owe to Natwest. I have read that the CCJ is removed from your credit file after 6 years which will be May next year. What happens to the debt at that time? As I say we have had no communication with Natwest since the CCJ was issued in May 2011.