Struggling with debt? Ask a debt advisor a question

1RandomMind wrote: »

Hi - would appreciate some advice on my options with my £14,400 debt with a building society.

This debt is approx. 6 years old and I have had contact with the company only once - 2 years ago where their offer was to unreasonable for my current circumstances. During all this time no money has been repaid.

I had a letter from them about 6 months ago (from 1st Credit ) offering for my to pay just 10% of what is owed to 'clear' the debt - however is this too good to be true ? At the time I did not have access to that money, however now a friend has offered to help me out with this if it is really that simple.

I have also looked into a DRO - I think I qualify as I have done the calculations and have less then £50 a month after bills. However I quite often work more then my contracted hours, this is not ever guaranteed - does this count ? My other concern with my salary is that I do get a bonus every 12 months - however I use this to pay for my car MOT / Insurance etc.

My personal circumstances is that I live with my girlfriend - and my bills are the rent I pay her towards bills etc (she owned the house before we met)

Basically the questions that I have are -

1. Is the 'pay 10% deal' really what they claim ?
2. Do you think they would offer this again if I contacted them ?
3. Is a DRO for me, with the fact I earn extra money thru overtime and my bonus ?
4. What is my financial outcome of the above scenarios ?(eg I would like to get my 'rating' sorted and be free of the mistakes I have made in the past and get a mortgage at some point)

Many thanks for your advice

Hello,

Thanks for posting. The first thing I'd recommend doing would be to read this article that we published today about statute barred debts: http://moneyaware.co.uk/2013/10/statute-barred-debt/. If it's more than six years since you made a payment then there's a chance this debt might be unenforceable.

I'll answer your questions using the same numbers as you, assuming that the debt is still enforceable:

1. 10% is a small amount to pay as a settlement but if the account is very old and they've not heard from you for a while then some companies are willing to offer big discounts.

2. It's down to the company but I think there's a reasonable chance they'd be willing to negotiate. They may offer the same deal again, be willing to go even lower or not want to negotiate at all.

If you do agree a settlement I'd strongly recommend getting any deal confirmed in writing before you send over any payments.

3. It sounds like you've read up on DROs and there's a possibility that you might qualify. Variable incomes and one off payments can impact on eligibility for DROs but don't always rule them out.

I'd recommend using getting in touch with us for more in depth advice to get a firm answer on this one: http://www.stepchange.org/Contactus.aspx

4. A DRO is a form of insolvency and would be registered on your credit file for six years - during that time people who check your history will see that you've had trouble with debts. So this isn't great for your credit history.

Settlements are a bit more complicated. Often companies will report that the debt has been partially settled to your credit rating, which will show you've come to an arrangement over the debt.

However I've heard of people having different information reported to their credit history following a settlement, so it's probably best to discuss it with company first.

If the debt is statute barred then there's a good chance it won't be showing on your history at all.

Hope this helps.

James

hi, i have over a period of over a year run up £850 of debt on my nationwide flex debit card that i use for everyday use.
I wanted to put this into a place where i could pay off over the period of the next year, now my spending is more organised.
So I opened a halifax all in one credit card last week and tried to move this debt as a balance transfer onto it. I was then told balance transfers can only be done with another credit card and they offered me a loan instead! (which i didnt take)
So I feel like I'm back to square one, but am worried that i will affect my credit rating by applying for anything else? Any advice please. H.

Constantinople wrote: »

Hi,

I'm intending to apply for a DPP (just used the debt remedy tool and thi was recommended) and was wondering what happens in the intervening period between the DPP actually being set up and my application - can creditors still keep adding interest/charges until it is formalised? I'm a little concerned as I have a couple of Payday loans so another 1-2 months of interest/charges would ramp the total amount up massively.

Can I offer to make a token payment to suspend charges?

What's to stop my creditors from selling the debt on? I'd much rather the money be going to my real creditors rather than a debt collection agency who have bought the debt for next to nothing.

Thanks in advance!

Hi there, thanks for posting.

Creditors can continue to add interest and charges until the DPP proposals have been issued. Sometimes they will freeze it however as a gesture of goodwill.

Once the DPP application is made, no further payments should be made to an unsecured creditor (priority debts are treated differently!). This is due to creditors having to confirm the debt amount and if payments are continued to be made this will naturally alter.

It's really important for the process that the balance does not change. Once the debt amount is confirmed by the creditor this should remain the same until the DPP is approved.

Unfortunately, creditors can sell debts on during the set up process and also once the DPP has been approved. If this happens and you get a letter notifying you, simply let us know and we'll take it from there.

Hope this helps

Good luck with everything,

Rachel

DBB_22 wrote: »

Hi,

I am finally beginning to see the light at the end of the tunnel. I was recently approved for a Barclay Card Platinum Credit Card with a limit of £5,000 and an 18 month 0% balance transfer deal. I was able to transfer £4,500 over from 2 high interest cards - Vanquis and Captial One Visa. Those two cards are now at £0 balance.

My question is - in terms of my credit file - is it better to close down the 2 other credit card accounts completely OR should I leave them open to demonstrate 'head room'?

My inclination is to close the accounts and cut up the cards but any advice is greatly appreciated.

Hi there

Thanks for posting.

With us being a debt advice charity, we would recommend that once you've paid a credit card off, you should cut the cards up to prevent any temptation to use them in future.

Hope this helps

Best regards

Rachel