Struggling with debt? Ask a debt advisor a question

StepChange_James · 22 February 2013 at 6:31PM

Missskint wrote: »

Thank you James that has give me a good starting point.

In total i get £149 a week, i am reluctant to open a new bank accountas it will mess up my payments and mean i might be without money whilst everything is transfering but it's worth looking into i also pay the interest from that account so my money has to be payed into it.

i'm not sure the bank will be onside if i leave them?

i will look into this further because i can't afford the interest.

Hi again,

Glad to help. I completely understand what you're on about with changing banks, it can be a faff. Some banks help you transfer to them with a switching service though, which I've been told takes a bit of the hassle away.

The reason we give the advice about changing banks is because of something called the right of offset. Martin's got an article on the main site about it: http://www.moneysavingexpert.com/banking/setting-off.

If anything, changing banks should make it easier to negotiate with your current bank. While you're still getting your income paid to them they can take your money without your permission, once you've changed they'll only get what you are willing to give them.

All the best and please get in touch if you'd like to talk further about things.

Kind regards

James

Spendthrift82 · 22 February 2013 at 10:29PM

Please could you help me, I'm really struggling.
I earn a decent wage of £19750 per year but I never have more than 200 a month for food and travel because my credit card, loan and overdraft are too piled up with debt. I can only afford the minimum payment on my credit card and that isn't covering the monthly interest so the minimum payment just gets higher every month even though I'm no longer using the card.
I really don't know what to do, I'm getting desperate.
X

GlitterQueen_2 · 22 February 2013 at 11:15PM

Hello James,
Thanks for your reply

Should i contact the credit reference agencies about the markers on the file or take it up with the creditor? If the debt is legally unenforceable after 6 years do you think I'd be able to argue to get the markers removed going back to 2009 while I'm dealing with the issue?

hopperson · 23 February 2013 at 2:55PM

I have a current account with Santander, having moved from Smile bank a couple of years ago. My overdraft with Santander has been increased to £900 this month; I also have two accounts remaining with Smile - both are overdrawn and I under 'overdraft reduction measures' with both accounts. I have an outstanding balance of £4,370 on my Barclaycard, and an Argos card with an £880 balance outstanding. Finally, I am paying off a fixed-sum personal loan with Smile for £2,000 which will be paid off in Nov 2014. So my total debts amount to around £7,800.
I went to Santander this week to apply for a bank loan (7.7% APR) for this amount but was rejected due to my credit score.
My monthly income is £1290, my outgoings amount to £1,230.
I would really like to be able to pay the whole lot off and start again.

Levej · 24 February 2013 at 10:53AM

Hi there,

I'm 25, in full time professional employment and earning £30,000 before tax.

I am £1,500 in my overdraft which is interest free for another year. I am really struggling to get out of my overdraft and I wondered what the best way to do this would be.

I have looked at some of the super balance transfer options on this site and they look like they might work well for me. I just wondered what your thoughts were on these?

Many kind regards

J

Lilypuppy · 24 February 2013 at 3:40PM

:(Hi there,

This is all new to me, so I do hope I am getting it right. I am writing to request help or advice and support. My husband and I both work, with ok jobs ( I am a part time primary teacher and he works for DWP), so our joint salary is £53,000 pa. We have 3 adult daughters, all living at home. The two who are working pay rent of £200 per month each. We have always supported the girls, paid for driving lessons, tests, insurance, first cars etc.

But we are in a mess. We have a mortgage of £160,500 and unsecured credit card debt of £28,000. We run a couple of old cars (needed for work which is 20 miles away), have Sky tv, but little else in terms of luxury. Our house is worth £220,000. We have a debt mountain and I don't know what to do for the best. At the moment everything is up to date, but any day now I will no longer be able to service the debts. This is because all credit is maxed and we are struggling to get more (fair enough!). I can't work full time as I have a degenerative muscle disease and even working 3 days is a challenge. I can't get DLA due to being able to walk ok.

I think I need to ask what we should do with regard to either shifting debt to a personal loan or a secured loan or a debt management plan. However, we need to be careful, as we have had the house up for sale for a year, in the hope we can move nearer to work and release equity for debts. Problem is, that no sale means no equity and we are going under, if not this month, then next.

Please can someone advise us? And before anyone says it, yes, we have been beyond stupid, but light bulb moment has arrived, so please be kind! Thanks for reading, Lilypuppy

I have now used the Step Change tool, which suggests either we downsize and use the equity to clear debts, or we take out a DMP. Both sound great, but what worries me is if we sell the house we will need a mortgage, which we will struggle to get on a DMP. Please can you still offer me advice? Thank you so much, Lily:)

StepChange_James · 25 February 2013 at 11:38AM

Spendthrift82 wrote: »

Please could you help me, I'm really struggling.
I earn a decent wage of £19750 per year but I never have more than 200 a month for food and travel because my credit card, loan and overdraft are too piled up with debt. I can only afford the minimum payment on my credit card and that isn't covering the monthly interest so the minimum payment just gets higher every month even though I'm no longer using the card.
I really don't know what to do, I'm getting desperate.
X

Hi Spendthrift82

It sounds like things are a bit of a struggle at the moment. I'd suggest the first thing to do would be to plan a monthly budget and see where you stand.

We can help you do this, either online using our Debt Remedy tool (http://www.stepchange.org/msehelp) or over the phone (http://www.stepchange.org/Contactus.aspx). We'll help you plan out your income and expenditure and from there offer you customised advice about how to move forward.

It depends how your finances stack up as to the best advice. If careful budgeting can lead to generating a bit more spare money every month then that might be all that's needed. On the other hand, if there's not enough money coming in to cover everything we can talk you through the various debt solutions and give you impartial advice.

All the best.

James

StepChange_James · 25 February 2013 at 11:44AM

GlitterQueen wrote: »

Hello James,
Thanks for your reply

Should i contact the credit reference agencies about the markers on the file or take it up with the creditor? If the debt is legally unenforceable after 6 years do you think I'd be able to argue to get the markers removed going back to 2009 while I'm dealing with the issue?

Hi GlitterQueen,

It seems really strange that a debt that is still showing your credit report. If you contact the credit reference agency then they may be able to explain why something that's over six years old is still there. They're the best people to speak to first to try to get to the bottom of what's on your file.

Or if you'd prefer you could call us (http://www.stepchange.org/Contactus.aspx) with your credit report on hand and one of our helpline advisors might be able to help you make sense of what's on there.

Hope this helps.

James

StepChange_James · 25 February 2013 at 11:58AM

Levej wrote: »

Hi there,

I'm 25, in full time professional employment and earning £30,000 before tax.

I am £1,500 in my overdraft which is interest free for another year. I am really struggling to get out of my overdraft and I wondered what the best way to do this would be.

I have looked at some of the super balance transfer options on this site and they look like they might work well for me. I just wondered what your thoughts were on these?

Many kind regards

J

Hi Levej,

I've not much experience of super balance transfers, the majority of people we speak to aren't in a position to apply for new credit so it rarely comes up.

If you've got 12 months of 0% on your overdraft then if possible it's probably best to try and clear the overdraft during that timescale.

Clearly I don't know enough about your finances to say if that's affordable for you or not, but if you bring the balance down by £100 a month you'll then have a 2 month cushion in case anything goes wrong.

There are two things I'd recommend that you consider doing. Firstly, and most importantly, plan out a monthly income and expenditure budget for yourself and try your best to stick to it. If you include at least £100 a month for the overdraft and plan all your other costs then it'll give you a plan to follow.

If you find creating an accurate budget difficult then you might want to start a spending diary. This is a pretty dull job but you basically write down every single thing you spend money on over the course of a month and then see how the reality matches up to your estimates.

The second thing that might be worth doing would be to move to a basic bank account with a bank you don't owe money to. Don't get a new overdraft and get into the habit of only spending what you've got in the account.

This will protect you from your current bank removing your overdraft at short notice and swallowing up your money in the account. After you've moved you can make regular installments to the account (standing order is probably the easiest way to do this).

I think there's a psychological advantage to having your overdraft separate to the account you pay your money into and should hopefully make it easier to get into the mindset of paying it back.

I hope this helps. If you're going to struggle to make regular payments on the overdraft then I'd suggest you get in touch with us for some in depth debt advice. The contact details are in my signature.

Kind regards

James

StepChange_James · 25 February 2013 at 12:12PM

hopperson wrote: »

I have a current account with Santander, having moved from Smile bank a couple of years ago. My overdraft with Santander has been increased to £900 this month; I also have two accounts remaining with Smile - both are overdrawn and I under 'overdraft reduction measures' with both accounts. I have an outstanding balance of £4,370 on my Barclaycard, and an Argos card with an £880 balance outstanding. Finally, I am paying off a fixed-sum personal loan with Smile for £2,000 which will be paid off in Nov 2014. So my total debts amount to around £7,800.
I went to Santander this week to apply for a bank loan (7.7% APR) for this amount but was rejected due to my credit score.
My monthly income is £1290, my outgoings amount to £1,230.
I would really like to be able to pay the whole lot off and start again.

Hi there,

It sounds like it's a struggle to get on top of these debts. Unfortunately, loan companies will often refuse applications if they see that you've struggled to maintain payments on your debts.

It's hard to say what would be the best way forward without knowing more about your finances. I presume that your outgoings figure includes debt payments, living costs and everything. If so then I'd suggest using the £60 surplus to pay extra towards your highest interest debt.

If your outgoings figure doesn't include debt repayments then I'd suggest getting in touch with us for advice as soon as possible. You can do this by using our online advice tool, Debt Remedy (http://www.stepchange.org/msehelp) or by giving us a call (http://www.stepchange.org/Contactus.aspx).

All the best.

James

Struggling with debt? Ask a debt advisor a question

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