In need of some friendly advice please-don't know where to start!

Dancingthroughlife · 9 February 2015 at 3:49PM

Hi,

I need to sort out a few different debts, ideally to make one payment per month towards all of them. I have applied for a few personal loans but been declined. Here's the figures:

CC 1 £1564
CC 2 £2258
CC 3 £3938
Business Loan £1419

All are defaulted. I am currently beating myself up for letting it get to this and running away from it.

I am self-employed and part time employed so my income varies month to month. However, in the past couple of months I have taken on a little extra work so things are a bit more steady and a have a bit more to put towards debt.

I just don't know who to talk to first. I have moorcroft and apex chasing me but have read bad things about them. Who can I phone and discuss 1 payment per month within my budget?

My partner also has debt which he pays every month through Debt Advisory Line, so he is charged for it, which I would really like to avoid if possible.

We are engaged and wanting to start a family but I can't move forward until I have this in hand

Any advice would be very much appreciated.

Thanks x

twiggy86 · 9 February 2015 at 4:59PM

Hi - I didn't want to read and run!

I haven't got any experience in defaults/DMP so can't really offer much advice. I will however say that most people say not to pay for a debt management plan (I assume that is what Debt Advisory Line is) but instead I've seen StepChange spoken of very highly on here - which is free. I would definitely have a look on here for more information and then maybe your OH should consider changing, and it may be an option for you.

Sorry I cant be more help.

Good luck.

weebit · 9 February 2015 at 5:33PM

Are you currently being charged interest on your debts, if so, what are your interest rates?

Are you able to make at least the minimum payments on an average month?

I think both you and your partner need to contact one of the free debt charities and whatever you do, DO NOT PAY ANYONE TO MANAGE A DMP. Your partner should cancel their agreement with Debt Advisory Line and use a fee-free charity such as Stepchange

bargainbetty · 9 February 2015 at 7:27PM

Do a budget, based on your actual income and your essential outgings (rent, council tax, food, utilities etc. Work out how uch you have left over for debt repayments.

Work out the total of your debts, and then what percentage each debt represents. Take the surplus of your budget and work out how much each one can have, base on those percentages..

Write (don't phone) to each creditor. Use the templates available on the National Debt Helpline (free services) to create the letters, and offer each creditor what you can afford. Eplain that you are sorting out a self-managed DMP, and that you can afford that much per month and no more. Ask that they freeze any interest or additional charges for at least six months to enable you to enforce the new plan.

Advise them that you will only communciate in writing, and ask for their bank details so that you can set up a standing order to pay them. Alternatively, send them cheques. Do not let them set up a direct debit. Ever.

They might be tetchy and threaten over it, but as long as you are making an afordable offer, they should eventually accept it (they don't have to freeze interest though). If you can save more to make overpayments on the debts, save it for any that keep charging interest, or save it up for full and final settlements with debt collectors.

Your credit file will be badly damaged for six years - do bear in mind you won't be able to do anything big during this time.

Or, you and your partner can go to Stepchange or Payplan and they will help you for free. Get your partner away from the fee paying company as soon as possible.

Best of luck

Puzzcat · 9 February 2015 at 7:35PM

Another vote for stepchange here. They have an online debt remedy you can use, you don't even need to speak to anyone. Also get OH to dump the fee paying company asap, waste of his money which could all be going to pay off the debts.
Puzz

National_Debtline · 9 February 2015 at 8:46PM

Hi there,

There has been some good advice on this thread, particularly about using a free debt management company and not a fee charger. If your OH has debts too then it may be possible to consider a joint, free debt management plan to deal with the debts. This is the option that allows you to set up one regular payment per month, which you mentioned you are keen on. You may have other options that you can consider as a couple that you wouldn’t be able to consider separately so I think a joint budget would be worth doing.

Because you have some self-employed income a Business Budget Sheet is going to be the most helpful. You can access this at www.businessdebtline.org and make sure you have approximately 3 months’ worth of books in front of you when you complete this to help you take an average. Allow for all of your essential daily living and business expenses such as rent/mortgage, gas, electric, council tax, food, travel, suppliers etc. but do not include any payments to any debts at this stage. bargainbetty also gave some great tips about how to work out a fair and pro rata offer based on the money that is left over.

It is ok to have a small budget of emergency money on a SOA but it is very unlikely that creditors will accept an actual “savings budget” when the accounts are in a state of default. Therefore, it is more likely you will need to be debt free before you can move forward.

Laura
@natdebtline

In need of some friendly advice please-don't know where to start!

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