Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Former MSE Wendy
    • By Former MSE Wendy 13th Nov 12, 7:12 PM
    • 868Posts
    • 1,782Thanks
    Former MSE Wendy
    StepChange #debtmyths
    • #1
    • 13th Nov 12, 7:12 PM
    StepChange #debtmyths 13th Nov 12 at 7:12 PM
    Welcome to the new DebtMyths thread by StepChange Debt Charity (formerly Consumer Credit Counselling Service). We'll leave them to explain the idea but do let us know what you think...


    Hi everyone,

    Sometimes it can be very hard to get the truth about debt. At StepChange Debt Charity (formerly CCCS) we hear so many stories that clients have overheard down the pub, on the bus, or found on the web that are, to be frank, rubbish!

    So we’ve been asked by MoneySavingExpert.com to help guide you through some of the myths that surround money and being in debt.

    Each weekday afternoon we’ll tweet a common debt myth on the MoneyAware Twitter channel (which by magic will also appear on the MSE Debt Problems page) and then debunk it on this forum thread. You’re very welcome to add your own thoughts, myths you’ve heard, or ask us questions.

    If you’d like to retweet us we’re using the hashtag #debtmyths on Twitter.


    This Forum Tip was included in MoneySavingExpert's weekly email

    Don't miss out on new deals, loopholes, and vouchers

    Last edited by Former MSE Debs; 21-01-2014 at 4:11 PM.
Page 1
  • StepChange_James
    • #2
    • 26th Nov 12, 3:46 PM
    • #2
    • 26th Nov 12, 3:46 PM
    The myth:

    An IVA is a magic solution to sort out my debts #debtmyths

    The reality:

    A lot of people try to research debt solutions before contacting us, something we actively encourage. However, as anyone who’s ever googled a medical condition will know the web can sometimes give you iffy information.

    Just like you can convince yourself that your stubbed toe could lead to needing your leg amputating, searching online debt solutions can convince you that IVAs are a great idea.

    Don’t get us wrong, IVAs can be an appropriate solution, but only under the right circumstances. The problem is that there are companies out there that are willing to promise you all sorts to get you to agree to one. You’ll be told an IVA is ideal for you by someone who barely knows your finances and hasn’t looked into your situation.

    As with all debt charities (see http://www.moneysavingexpert.com/loans/debt-help-plan for a full list of recommended organisations) we go through your current situation as a whole, checking your income and expenditure in detail, and recommend the debt solution that’s best for your individual circumstances.

    Have you ever been “sold” an IVA by someone who didn’t understand your finances?
    Last edited by StepChange_James; 27-11-2012 at 9:25 AM. Reason: Formating
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • StepChange_James
    • #3
    • 27th Nov 12, 4:01 PM
    • #3
    • 27th Nov 12, 4:01 PM
    The myth:

    I only need to pay the minimum payments on my card to clear it #debtmyths

    The reality:

    If youíve got £3000 balance on a credit card and pay off the minimum payment every month youíll still be paying it back 28 years later. Most mortgages donít last that long!

    Many people think that repaying the initial minimum payment - £71.50 (assuming a 17.9% APR on a £3,000 debt) will clear the credit card debt in about 4-5 years (41 months of £71.50 equals about £3,000, then add on a few months for interest that you think youíll accrue).

    However, because of compound interest on credit cards the amount you pay back falls each month, while the interest rate continues to add on costs.

    You need to be aware of this when borrowing on a credit card and ask yourself, before spending on it, can I afford the repayments, and can I repay a higher amount than the minimum each month (preferably all)?

    Have you ever got stuck in the minimum payment trap?
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • StepChange_James
    • #4
    • 28th Nov 12, 4:07 PM
    • #4
    • 28th Nov 12, 4:07 PM
    The myth:

    Overspending is the main cause of debt problems #debtmyths

    The reality:

    Itís easy to think that people who get into financial difficulty have got there because theyíve been daft with their money, frittering their cash on handbags and plasma screen TVs.

    However the realityís very different; the main causes of debt are job losses or pay cuts. We've an infographic that shows the difference between the perception and the reality: http://www.stepchange.org/infographics/causesofdebt.aspx#.ULY1t4dg95o.

    Do you think people with debt problems are unfairly judged to be bad with money?
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

    • rising from the ashes
    • By rising from the ashes 28th Nov 12, 4:59 PM
    • 12,326 Posts
    • 59,545 Thanks
    rising from the ashes
    • #5
    • 28th Nov 12, 4:59 PM
    • #5
    • 28th Nov 12, 4:59 PM
    Hi James

    There's some good tips on here .... just wondering if it could be made a sticky?

    Unfortunately, it quickly falls down the board / off the first page and therefore probably isn't reaching as many people as it could.
    Grocery Challenge £211/£455 (01/01-31/03)
    2016 Sell: £125/£250
    £1,000 Emergency Fund Challenge #78 £3.96 / £1,000
    Vet Fund: £410.93 / £1,000
    Debt free & determined to stay that way!
    • Former MSE Wendy
    • By Former MSE Wendy 28th Nov 12, 5:07 PM
    • 868 Posts
    • 1,782 Thanks
    Former MSE Wendy
    • #6
    • 28th Nov 12, 5:07 PM
    • #6
    • 28th Nov 12, 5:07 PM
    We can't make this a sticky unfortunately rising from the ashes, we've a few already on DFW and we try to limit the no.

    We're lucky enough to be getting a new post every day though so the thread will keeping getting bumped up the list
    • rising from the ashes
    • By rising from the ashes 28th Nov 12, 5:13 PM
    • 12,326 Posts
    • 59,545 Thanks
    rising from the ashes
    • #7
    • 28th Nov 12, 5:13 PM
    • #7
    • 28th Nov 12, 5:13 PM
    Yup, there are a few!

    As the boards are really busy (which is great!) it unfortunately it does drop down really quickly - I know I didn't see it at all yesterday (and I'm around a lot just now as off work!).

    Could another post with a link be added to one or more of the current sticky threads? (Maybe Fermi's really useful "Newbie's Guide" one?)
    Grocery Challenge £211/£455 (01/01-31/03)
    2016 Sell: £125/£250
    £1,000 Emergency Fund Challenge #78 £3.96 / £1,000
    Vet Fund: £410.93 / £1,000
    Debt free & determined to stay that way!
    • fermi
    • By fermi 28th Nov 12, 5:21 PM
    • 38,958 Posts
    • 46,750 Thanks
    fermi
    • #8
    • 28th Nov 12, 5:21 PM
    • #8
    • 28th Nov 12, 5:21 PM
    I've temporarily added a post for now.

    Really need to have a bit of a reorganisation on the stickies, but as Wendy says, to keep the board usable and accessible on a busy board like this the number is strictly limited.
    I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards and Loans boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com | > New to Forum? Click for Guide <

    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
    • Former MSE Wendy
    • By Former MSE Wendy 28th Nov 12, 5:24 PM
    • 868 Posts
    • 1,782 Thanks
    Former MSE Wendy
    • #9
    • 28th Nov 12, 5:24 PM
    • #9
    • 28th Nov 12, 5:24 PM
    Thanks fermi
  • Lensman
    A suggestion for a tip.

    Doorstep collectors.

    Most people - especially those spiralling in to debt and not dealing with it yet - live in fear of the "doorstep visit". Commonly they will have spoken on the phone to some careless DCA representative that will have suggested that a doorstep "visitor" has rights - sometimes the same as those of a bailiff.

    So my suggestion is an official outline of what rights a "Doorstep Collector" has and doesn't have. And whether paying them money will help your case.
  • StepChange_James
    Good suggestion Lensman.

    I have a sneaking suspicion there might be a debtmyth about doorstep debt collectors next week (wink, wink).
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • archived user
    The myth:

    New government legislation can write off your debtĒ #debtmyths

    The reality:

    We all see adverts from dodgy debt management companies that promise to write off 80%, 85%, 90% or even all your debt in one fell swoop. If it sounds too good to be true then it probably is.

    These adverts are usually referring to formal (or statutory) debt solutions; in England and Wales this means individual voluntary arrangements or bankruptcy and debt relief orders. Often the promise of this ďnew legislationĒ is a company dangling a carrot to try and tempt you into a discussion so they can try to make money off you.

    Have you ever been tempted by a promising debt repayment offer to only find it wasnít what it seemed?
  • StepChange_James
    The myth:

    “Self-employed people rarely struggle with their finances” #debtmyths

    The reality:

    We recently commissioned research from Bristol University looking into employment and debt. Their findings showed that the finances of self-employed people are actually more vulnerable than people in employment. While working for yourself may seem like a dream come true, it can become a nightmare if you can’t bring in enough money and end up using credit to survive.

    Have you ever had a business that has led to a personal debt problem?
    Last edited by StepChange_James; 30-11-2012 at 4:03 PM.
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

    • MummyRivett
    • By MummyRivett 2nd Dec 12, 6:00 PM
    • 350 Posts
    • 3,659 Thanks
    MummyRivett
    Great thread thank you for this.
    CHALLENGES FOR 2015
    12K for 2015 Member No: 141 / £1 a Day for Xmas 2015 £500/£365 / 12lb in 12 Weeks 9 /12
  • ChopinonaBudget
    Thanks for the one about self employment. My income is terrifyingly variable, I get no sick pay, no holiday pay, and if I need to take an afternoon of to attend a medical appointment it can cost me my entire day's income (my contact hours being from 4pm till 6.30pm), making it oddly cheaper to often go private for medical stuff than use the NHS.
    I love my job, and I bring in enough (just), but it's frightening how fragile my income actually is compared to a PAYE job with a contract and benefits.
    Overdraft £150 Smile PAID! Natwest £679 M&S £2,347 Halifax £2,665 Nationwide £5,579 Mum £5,390 Library Fines £21
    Tax Fund £288 House Fund £170 Yearly Spends Fund £65 Emergency Fund ISA £191
    Long Hauler #325 DFW Nerd #1448
    "In our house, when things break, we just pretend they still work"
  • stuff_the_mattress
    Another myth about debt that the CCCS / Step Change could do with busting is that taking out a DMP means that the bank have to stop interest and charges.

    They do not.

    Banks don't treat customers on DMPs any differently from those dealing with it themselves and therefore will only freeze / lower interest and charges in certain situations - having a DMP makes no odds as to what the bank will do.
  • StepChange_James
    Another myth about debt that the CCCS / Step Change could do with busting is that taking out a DMP means that the bank have to stop interest and charges.

    They do not.

    Banks don't treat customers on DMPs any differently from those dealing with it themselves and therefore will only freeze / lower interest and charges in certain situations - having a DMP makes no odds as to what the bank will do.
    Originally posted by stuff_the_mattress
    Hi Stuffthemattress,

    Thanks for posting, thatís a good suggestion. We always make it clear to our DMP clients that their creditors donít have to stop interest and charges on a DMP. We regularly speak to people whoíve taken advice from elsewhere and have been given the impression that a DMP guarantees their interest will be frozen, which can lead to them being very disappointed if it doesnít happen.

    Iíd say that we find the majority of the time creditors are willing to stop or reduce interest. The biggest factor tends to be if they can see that there is a genuine debt problem and the payment being offered is reasonable. This doesnít guarantee a payment will be accepted but it certainly improves the chances.

    Kind regards

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

    • FredWhispers
    • By FredWhispers 3rd Dec 12, 11:30 AM
    • 83 Posts
    • 24 Thanks
    FredWhispers
    Interesting stuff.

    One question, how much did the rebranding of CCCS cost? Do you think this was good use of this money?
    • Former MSE Wendy
    • By Former MSE Wendy 3rd Dec 12, 12:15 PM
    • 868 Posts
    • 1,782 Thanks
    Former MSE Wendy
    Can we keep this thread on the topic of debt myths please folks.
  • archived user
    The myth:

    A doorstep debt collector can come in and take my stuff #debtmyths

    The reality:

    The idea of some beefy guy in a bomber jacket coming into your home and taking all your possessions is something that causes many of our clients sleepless nights. However the reality is very different. A doorstep debt collector is not a bailiff and they donít have the power to enter your property.

    The truth is that doorstep debt collectors have very little actual power. They can knock on your door and ask for a payment but they donít have the power to come into your property, and canít take your things away.

    Itís fairly rare that creditors send doorstep debt collectors because itís expensive to send someone from one house to the next and they often donít collect very much money. If a doorstep collector does pay you a visit itís better to not pay them anything and tell them youíre getting debt advice.

    If you have debts that have gone to bailiffs then the rules are different. Weíve got a blogpost about dealing with bailiffs.
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

6,015Posts Today

5,157Users online

Martin's Twitter
  • I'm signing off for the evening. Have a wonderful weekend and try and say something nice to someone who voted the other way to you!

  • There's no crystal ball but if its the right house for you and you can afford the repayments - why not? https://t.co/3YMd7hTneJ

  • RT @dylcojones: @MartinSLewis your video posted this morning gave me a bit of hope that things might be ok!

  • Follow Martin