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  • FIRST POST
    • sash_berry
    • By sash_berry 29th Sep 16, 1:35 PM
    • 22Posts
    • 14Thanks
    sash_berry
    Is StepChange the best option?
    • #1
    • 29th Sep 16, 1:35 PM
    Is StepChange the best option? 29th Sep 16 at 1:35 PM
    Hi All,

    Could please someone advise if there is a better option to get rid of debt that is already getting paid off via StepChange?

    My partner had few CC and loans after divorce. So he went to StepChange and paying around GBP450.00 per month now. Total debt is around 35k. What as I see will be around 7 years before he pays everything off.

    Also Credit rating is very bad. But no missed payments or CCJs.

    Is there anything we can do to pay these debts off? Or just try to pay them off as much as we can?

    Thank you
Page 1
    • sourcrates
    • By sourcrates 29th Sep 16, 1:47 PM
    • 8,408 Posts
    • 8,227 Thanks
    sourcrates
    • #2
    • 29th Sep 16, 1:47 PM
    • #2
    • 29th Sep 16, 1:47 PM
    Hi,

    The law provides three regulated debt solutions, they are :

    (1) Bankrupcy

    (2) Individual voluntery arrangement

    (3) Debt relief order

    Plus the unregulated DMP your partner is on now.

    If you have savings you can try full and final settlement offers to his creditors, I suggest you Google the options available, see if any are more suitable.

    For free debt advice please call National Debtline on
    0808 808 4000
    Monday to Friday
    9am to 9pm
    Saturday 9.30am to 1pm
    • sash_berry
    • By sash_berry 29th Sep 16, 1:50 PM
    • 22 Posts
    • 14 Thanks
    sash_berry
    • #3
    • 29th Sep 16, 1:50 PM
    • #3
    • 29th Sep 16, 1:50 PM
    Thank you Sourcrates,

    So the best option would be try to pay debt by debt off as I see.
    Loan £6700.00
    ISA £3000
    SAVINGS £2100
    • Magi74
    • By Magi74 29th Sep 16, 10:21 PM
    • 74 Posts
    • 75 Thanks
    Magi74
    • #4
    • 29th Sep 16, 10:21 PM
    • #4
    • 29th Sep 16, 10:21 PM
    Make sure that your partner's DMP doesn't contain debt that continues to charge interest. One of my DMP debts charged interest that was more than the payment I was making (thanks again Lloyds) - I ended up practically begging them to default that loan.

    Most debtors will suspend interest. They don't have to, but why pay extra when the credit file is taking a massive hit as it is?
    • Thistle-down
    • By Thistle-down 30th Sep 16, 8:47 AM
    • 908 Posts
    • 3,105 Thanks
    Thistle-down
    • #5
    • 30th Sep 16, 8:47 AM
    • #5
    • 30th Sep 16, 8:47 AM
    Hi,

    The law provides three regulated debt solutions, they are :

    (1) Bankrupcy

    (2) Individual voluntery arrangement

    (3) Debt relief order
    Originally posted by sourcrates
    DRO's are only available for debt less than 20K
    • chevalier
    • By chevalier 30th Sep 16, 9:36 AM
    • 7,690 Posts
    • 17,798 Thanks
    chevalier
    • #6
    • 30th Sep 16, 9:36 AM
    • #6
    • 30th Sep 16, 9:36 AM
    whilst 7 years seems ages, he may get a pay rise, could sell stuff, get a second job, do surveys all sorts to get those payments down. It just depends on how hard he wants to work at it. Not being snarky, just to say that don't take the 7 years as being set in stone.
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
    • sash_berry
    • By sash_berry 30th Sep 16, 9:58 AM
    • 22 Posts
    • 14 Thanks
    sash_berry
    • #7
    • 30th Sep 16, 9:58 AM
    • #7
    • 30th Sep 16, 9:58 AM
    Thank you Magi74
    It is his post-divorce debts. Been left with all the credit cards, storecards, lawyer expences...Had to buy a house for Ex.. So its not just missed payments or smth like that. But very hard indeed Will check the interest.

    chevalier,
    We both have a good income and he has his own business. Just cant decide would it be better to squeeze the most possible out and then be free of debts or pay a bit every month and enjoy the life?
    That`s the question
    Loan £6700.00
    ISA £3000
    SAVINGS £2100
    • chevalier
    • By chevalier 8th Oct 16, 12:03 AM
    • 7,690 Posts
    • 17,798 Thanks
    chevalier
    • #8
    • 8th Oct 16, 12:03 AM
    • #8
    • 8th Oct 16, 12:03 AM
    If the debts are paid off quicker then wouldn't the defaults drop off the credit file faster? Sorry I am a bit hazy about that so maybe someone else could advise. That being the case I would be paying them off as fast as I could.
    regards
    chev
    I want a job that is less than an hour driving away from my house! Are you listening universe?
    • fatbelly
    • By fatbelly 8th Oct 16, 5:48 AM
    • 10,093 Posts
    • 7,568 Thanks
    fatbelly
    • #9
    • 8th Oct 16, 5:48 AM
    • #9
    • 8th Oct 16, 5:48 AM
    If the debts are paid off quicker then wouldn't the defaults drop off the credit file faster? Sorry I am a bit hazy about that so maybe someone else could advise. That being the case I would be paying them off as fast as I could.
    regards
    chev
    Originally posted by chevalier
    If there's a default on the credit entry then the whole entry drops off six years from the default date.

    Nothing you do, short of a specific agreement with the creditor to remove it (and that's rarely going to happen), is going to change that.

    The problem with a dmp is that sometimes the creditor DOES NOT default, but puts an arrangement to pay marker. Then the entry stays (with its marker) until six years after it is satisfied/settled.

    This is the debt-free wannabee board so we're unlikely to say 'pay your debt off more slowly and enjoy life a bit more'. Your plan (if Sourcrates' insolvency options are not appropriate) should allow you a reasonable standard of living and clear the debt in a reasonable period. Seven years is the far end of what is considered reasonable.

    Is there a better option than Stepchange? Not really, if you want a debt management company to handle things and not charge a fee (Payplan is equivalent), But many consider a better option to be a self-managed plan, and to use any lump sum to do full & final settlement.

    A self-plan also makes it easier to check enforceability (via a CCA request maybe) and to stop payment if they can't comply,
    • DrWatson1
    • By DrWatson1 8th Oct 16, 7:23 AM
    • 53 Posts
    • 31 Thanks
    DrWatson1
    I owe a similar amount of money to you (around £30k) and I'm also with Stepchange.

    Overall I've found them pretty good. It does what it say's on the tin, and I've certainly no complaints.

    However, I take a different view to paying my debts back. Over the last two years, I've tried to pay as little as possible to my creditors, and save whatever spare money I have. I now have around 6k saved up, which not only gives me some security if I need some money urgently, but I'm also now in a position to start offering F&F settlements.

    I owe up to £8k to some of my creditors, and for two years they have been getting £5 per month. The way I see it, I have a far better chance of them accepting a lowish F&F settlement if I'm paying them £5 than if they are getting £100 a month.

    In my experience, paying your debts off quickly isn't about paying them as much as you can each month. It's about adopting an approach that gives you flexibility and the greatest amount of leverage in any potential future negotiation.
    • fatbelly
    • By fatbelly 8th Oct 16, 10:13 AM
    • 10,093 Posts
    • 7,568 Thanks
    fatbelly
    That certainly is an effective approach.

    I'm surprised Stepchange have allowed you to take it, though; and I don't think they would do that now that the FCA have stamped on them.

    But it's certainly something the op could try with a self-managed plan and I agree with your comments.

    Good luck with the F&Fs and you should also try cca requests where they are appropriate.
    • Little Miss_Sunshine
    • By Little Miss_Sunshine 8th Oct 16, 3:01 PM
    • 103 Posts
    • 206 Thanks
    Little Miss_Sunshine
    I owe a similar amount of money to you (around £30k) and I'm also with Stepchange.

    Overall I've found them pretty good. It does what it say's on the tin, and I've certainly no complaints.

    However, I take a different view to paying my debts back. Over the last two years, I've tried to pay as little as possible to my creditors, and save whatever spare money I have. I now have around 6k saved up, which not only gives me some security if I need some money urgently, but I'm also now in a position to start offering F&F settlements.

    I owe up to £8k to some of my creditors, and for two years they have been getting £5 per month. The way I see it, I have a far better chance of them accepting a lowish F&F settlement if I'm paying them £5 than if they are getting £100 a month.

    In my experience, paying your debts off quickly isn't about paying them as much as you can each month. It's about adopting an approach that gives you flexibility and the greatest amount of leverage in any potential future negotiation.
    Originally posted by DrWatson1

    That is exactly our approach. We're self managed.
    LBM 2/12/15 - total debt £62500:
    2/216 £29500 unenforceable.
    DMP - 1/9/16
    • blisteringblue
    • By blisteringblue 9th Oct 16, 11:16 AM
    • 988 Posts
    • 1,791 Thanks
    blisteringblue
    Self managed if you want to call the shots. Looking like I'm going to have to find 2k in Jan Feb as been a bit rubbish collecting my annual mortgage payment (capital reduces annually) so we are not going without, but my creditors will. They will moan and call, but who cares. I've long since stopped worrying about my creditors, they get what I am prepared to pay.
    Debt is not a crime
    Estimated DFD - OCT 2018
    Self-Managed DMP 47.58% Paid
    • TimeToDoIt
    • By TimeToDoIt 9th Oct 16, 9:57 PM
    • 211 Posts
    • 472 Thanks
    TimeToDoIt
    Keep on going. Step change are wonderful.
    ~~I am debt free~~
    • sash_berry
    • By sash_berry 10th Oct 16, 10:00 AM
    • 22 Posts
    • 14 Thanks
    sash_berry
    I owe a similar amount of money to you (around £30k) and I'm also with Stepchange.

    Overall I've found them pretty good. It does what it say's on the tin, and I've certainly no complaints.

    However, I take a different view to paying my debts back. Over the last two years, I've tried to pay as little as possible to my creditors, and save whatever spare money I have. I now have around 6k saved up, which not only gives me some security if I need some money urgently, but I'm also now in a position to start offering F&F settlements.

    I owe up to £8k to some of my creditors, and for two years they have been getting £5 per month. The way I see it, I have a far better chance of them accepting a lowish F&F settlement if I'm paying them £5 than if they are getting £100 a month.

    In my experience, paying your debts off quickly isn't about paying them as much as you can each month. It's about adopting an approach that gives you flexibility and the greatest amount of leverage in any potential future negotiation.
    Originally posted by DrWatson1
    Thank you for your reply. My partner says that he better pays it slowly without interest rather than throwing big chunk of money in 2 years to pay it off. Also banks are open to the negotiations later...

    At some point I agree and understand it but want to be debt free so much

    Thank you and good luck
    Loan £6700.00
    ISA £3000
    SAVINGS £2100
    • DrWatson1
    • By DrWatson1 10th Oct 16, 10:32 AM
    • 53 Posts
    • 31 Thanks
    DrWatson1
    Thank you for your reply. My partner says that he better pays it slowly without interest rather than throwing big chunk of money in 2 years to pay it off. Also banks are open to the negotiations later...

    At some point I agree and understand it but want to be debt free so much

    Thank you and good luck
    Originally posted by sash_berry
    No worries, and thanks

    The way I see it, if you make up some reason (hours cut, redundancy, going back to education, etc) why you have to cut payments to £50 pm (start by saying it's temporary, say 6 months, then string it out), you can save the £400 a month and in 2 years, you'll have £10k. This is more than enough to start offering F&F settlements with a reasonable chance of success.

    So, you could be debt free in 2 years using this method. Obviously, the key is being disciplined enough to save the extra money - if you don't feel confident you can do that, then it's probably better to stay on your current repayment.

    Good luck
    • sourcrates
    • By sourcrates 10th Oct 16, 12:26 PM
    • 8,408 Posts
    • 8,227 Thanks
    sourcrates

    So, you could be debt free in 2 years using this method. Obviously, the key is being disciplined enough to save the extra money - if you don't feel confident you can do that, then it's probably better to stay on your current repayment.

    Good luck
    Originally posted by DrWatson1
    This is a good route to take, in fact its a method i`ve pushed quite a bit in the past on these forums.

    You can save yourself a whole load of money doing it this way.

    Making small payments encourages the lender to offload the debts quicker, once the debt collectors get a hold of them, the discount options can vary, but i have seen between 40-60% offered regularly, some even let you pay this reduced amount over time.

    So i wish you good luck with it all Herr Doctor !!

    For free debt advice please call National Debtline on
    0808 808 4000
    Monday to Friday
    9am to 9pm
    Saturday 9.30am to 1pm
    • NewcastlePaul
    • By NewcastlePaul 10th Oct 16, 1:25 PM
    • 142 Posts
    • 326 Thanks
    NewcastlePaul
    Will never be able to praise Stepchange enough
    31st December 2004 - Debt was £128,596.72
    1st October 2016 - Debt Free
    12 years of Stepchange + PPI +F&F
    http://forums.moneysavingexpert.com/showthread.php?t=4862915
    • sash_berry
    • By sash_berry 10th Oct 16, 5:01 PM
    • 22 Posts
    • 14 Thanks
    sash_berry
    Will never be able to praise Stepchange enough
    Originally posted by NewcastlePaul
    NewcastlePaul,

    Wow, just Wow!
    Well done!!! x
    Loan £6700.00
    ISA £3000
    SAVINGS £2100
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