Ask a CCCS counsellor a question

dirtydavey

jamesd wrote: »

dirtydavey, it sounds as though you aren't yet at the point where arrangements through CCCS are the best approach. Assuming that your credit record really is that good you should be able to obtain 0% balance transfer deals from credit cards. Virgin's 0% for 15 months with 2.98% fee allows transfers to a current account and might get you a limit sufficient to eliminate the overdraft and costs from that, as well as possibly reducing the cost of other debt.

These deals can be very helpful but you must ensure that you don't increase borrowing while using them to reduce debt issues. If you find that your borrowing is still increasing then you will need to take the CCCS route and should do so sooner rather than later.

Someone with an unblemished credit record might expect to be able to borrow up to half of their salary on 0% credit card deals, and to be able to get repeat deals as the old ones expire. Depending on your income it's possible that you could mostly eliminate the interest cost.

You may also find the Debt-free Wannabe and Old Style Moneysaving sections of interest. The Debt-free Wannabe people are good at squeezing money from budgets but do be aware that many there have had significant major debt issues and will not accept borrowing, even to reduce debt costs, because they were unable to manage to stop borrowing more when they did it themselves. It's vital that you do avoid increasing your total borrowing, or promptly seek CCCS assistance if you can't do that!

Hi,

Thanks so much for your help.

I would not say that my credit file to perfact. Its just getting better each month I make a good payment and has not had a bad point agenst it for over a year (had quite a few before)

What i would like to know is, If I come up with a payment plan with CCCS would I had bad marks on my credit file and ruin the good work i have done to repair it?

Dave

jamesd

Simply working on a budget with CCCS would have no effect on your credit record. If you moved from there to make arrangements to suspend interest or reduce interest rates that would be likely to have a negative effect. The negative effect would probably be greater than one or two late payments but less than many late payments on many different accounts for many months. At the moment it sounds as though it's not necessary for you to take that step but it would be if you found that you were unable to get balance transfer deals that could reduce your debt costs.

Most important is to take one of the steps, trying for lower cost borrowing or seeking CCCS assistance, since your current situation is unstable and getting worse. If you don't get the deals, then you should move on to CCCS.

CCCS_Matthew

gandl wrote: »

Hi - I tried to PM the message below to CCCS, but can't work out whether it has gone or not, so am trying this as well.
Any advice greatly appreciated.

---

My father-in-law (T) was recently forced to reveal to us and to my mother-in-law (C) that he has run up total debts of ca. £46k (ca. £18k on 2 loans and ca. £28k on about 6 credit cards). C was unaware of this (they have separate current accounts) and is inevitably very upset, as she hates debt of any kind.

I did a rough run through of figures with them and it seems that just based on essential outgoings and repayments, his outgoings are currently ca. £400/month more than his net earnings. Until this came out he also regularly spent significant amounts on non-essential luxuries and this is how he has got into the debt cycle and ended up with such a large total.

I advised them to seek proper debt counselling, but CCCS, CAB, etc. were unable to provide much help because they are not yet formally in debt crisis, because he has so far been able to keep up the payments and not default. However, according to the Experian credit report we got for him, he has now used up well over 90% of his available credit, so it is a matter of months before he will have to start to default, if something is not done.

The average % rate on the credit cards is ca. 18%, so most of the monthly payments on these are just going on repaying interest.

He has the opportunity to increase his loans by another ca. £7.5k with Black Horse finance (I don't know at what %), keeping similar repayments but spreading the loan over a longer period. This will allow him to clear some of the credit card debt, but not enough. They are also insisting C countersigns the form, which she is unhappy about, as she will then be jointly liable for the debt.

A few key points are: 1. T is now 63, but expects to (and needs to) be able to continue working after his retirement; 2. C is 62 and retired, but she has now started looking for a job again; 3. they have a house worth ca. £160k-£180k with no mortgage on it. 4. The situation is very tense and could potentially split them up (C has already had valuations on the house, but really does not want to move). 5. The person who seems least concerned by all this is T, who still, in the face of all the figures, seems to think it is under control and that he could have sorted it out on his own. He is effectively being forced into these changes (including having to hand over all his credit cards to stop him spending any more on them!).

Could they and should they be considering a mortgage or home equity loan or some other form of debt consolidation, or should they avoid any sort of secured debt? Is the only answer to do the credit card shuffle, etc. to try to get everything onto the lowest possible %? Is there anything else that can be done?

One of our biggest concerns is that it seems inevitable that C will have to take on joint responsibility for some or all of T's debts. She is obviously very worried about this (having never knowingly been in debt before) and wants to try to get some sort of insurance protection (to the extent possible). Is there any way to sort this out without putting her and/or the house at risk?

I apologise for such a long message, but would be very grateful for any advice you can provide.

Hi there, sorry to hear about the situation.

Debt consolidation is rarely the best way to deal with such a situation, particularity when considering taking out a secured loan or another mortgage. Converting unsecured debts into secured debts is always best avoided. By doing so, they would be putting the property at unnecessary risk should they then not be able to afford to make the repayments.

T may also find it very difficult to borrow any more money given the outstanding amount owed and his age, which may suggest that shuffling debt between lower paid cards isn’t really a viable option.

There is absolutely no need for C to sign any kind of documentation to accept joint liability for these debts so I would strongly advise against this. It seems as though one of his lenders are trying to gain extra security in ensuring they get their money back.

It’s impossible for me to give judgement on the best way to deal with the situation at this stage, but I think it’s likely to come down to one of the following options:

· Sell the property/downsize and use a portion of the proceeds to clear the debt, perhaps by offering settlement offers.

· Consider making reduced payments to the creditors based on an affordable amount after T’s priority living costs. Whether this would be a realistic option would depend on how much he’s got to offer, and how long this is likely to clear the debt.

· See whether they can qualify for equity release. They need to be very careful with this, and be aware of how much equity they are signing over and ensure they have absolute security in living in the house for as long as they like.

Has T actually gone through the process and spoke to us yet? The fact he’s not defaulted as yet has no significance in determining the fact he still needs advice. I’ve spoke to many clients over the years that are completely up to date with payments but are still in a difficult position. If he hasn’t already done so, I’d suggest he calls our helpline on 0800 138 1111 to get an appointment booked in with one of our debt counsellors. If he would prefer for someone such as yourself to speak on his behalf, that can be arranged providing he gives verbal permission to do so. We’ll be able to discuss all the options that T has and how these are likely to impact.

Hope this helps for now,
Matthew.

CCCS_Matthew

graduategeo wrote: »

Hi I am looking for some advice. I had taken out a loan with a student provider and after hearing nothing attempted to contact them and discovered they had gone under. I continued to try and get in touch with someone to no avail. Last week my parents (I live abroad currently) rang to say I had a payment schedule from a Canadian debt agency called Total Crediting. They only provided a list of payment dates and no other info. They also will only accept payment by cheque. As my first payment is due in 2 days I tried calling but the number was not accepted. I then emailed and got a very short reply back saying it was my fault they could not get in touch despite having my current address, email and phone on their records! My main concern is if there is a way to confirm the validity of the company? They are difficult to contact and deal with, do not accept bank payments and use emails which are listed as spam. I haved saved up so that I can make full early settlement but am not confident to do so until I know they are the real deal.

Any assistance greatly appreciated

Hi there,

Was the debt taken out in UK or Canada?

Matthew.

CCCS_Matthew

jamesd wrote: »

Simply working on a budget with CCCS would have no effect on your credit record. If you moved from there to make arrangements to suspend interest or reduce interest rates that would be likely to have a negative effect. The negative effect would probably be greater than one or two late payments but less than many late payments on many different accounts for many months. At the moment it sounds as though it's not necessary for you to take that step but it would be if you found that you were unable to get balance transfer deals that could reduce your debt costs.

Most important is to take one of the steps, trying for lower cost borrowing or seeking CCCS assistance, since your current situation is unstable and getting worse. If you don't get the deals, then you should move on to CCCS.

Couldn't have put it better myself!

Matthew.

jillie1974

we have a mortgage break due me being on maternity leave. this would mean each month we could keep up our existing monthly payments. can we do this or do we need to a proper review as my salary is obviously lower than what the records have it as.

gandl

Matthew

Many thanks for your prompt response and good advice.

I have just found out that T has been rejected for the loan increase, even with C's signature, but the person they were dealing with again suggested debt consolidation (onto a mortgage?), so they are just starting to look into this with a mortgage/finance adviser. I will quickly pass on your advice in this respect.

Regarding your suggested options:

- property sale/downsize has to be the last option - C really does not want to leave the house. It is also not very big and the amount they would have left would be insufficient to buy another property where they live.

- making reduced payments could potentially be an option, but only if there was also a way of significantly reducing the amount of interest T is currently paying, otherwise realistically he has nothing to offer and the overall debt will continue to grow.

- I have heard nothing but nightmare stories about equity release up to now, so appreciate they would have to be extremely careful. If they did want to consider this option can you recommend any reputable organisation/adviser they could speak to in order to see if they can qualify?

T rang one of the debt counselling services recommended by Which? and MSE (I thought it was CCCS) and was told that they couldn't help because he has not defaulted on any payments yet. T and C also jointly went to the CAB to see a debt advisor and were essentially told the same thing - the only real advice they were given was to ring all he credit card providers and ask for a lower rate of interest.

I wil pass on the CCCS helpline no. to them to get an appointment booked with one of your debt counsellors - whilst C might prefer me to speak on T's behalf, I don't think T will want me to. I presume the appointment would be for a telephone consultation - if so, my only concern is that I would prefer the consultation to be with both T and C jointly, rather than with just T. Does CCCS do any face-to-face consultations?

Again, many thanks for your help and advice.

Regards
Graeme

CCCS_Matthew

jillie1974 wrote: »

we have a mortgage break due me being on maternity leave. this would mean each month we could keep up our existing monthly payments. can we do this or do we need to a proper review as my salary is obviously lower than what the records have it as.

Hi Jillie,

Are you on a DMP with the CCCS?

Matthew.

CCCS_Matthew

gandl wrote: »

Matthew

Many thanks for your prompt response and good advice.

I have just found out that T has been rejected for the loan increase, even with C's signature, but the person they were dealing with again suggested debt consolidation (onto a mortgage?), so they are just starting to look into this with a mortgage/finance adviser. I will quickly pass on your advice in this respect.

Regarding your suggested options:

- property sale/downsize has to be the last option - C really does not want to leave the house. It is also not very big and the amount they would have left would be insufficient to buy another property where they live.

- making reduced payments could potentially be an option, but only if there was also a way of significantly reducing the amount of interest T is currently paying, otherwise realistically he has nothing to offer and the overall debt will continue to grow.

- I have heard nothing but nightmare stories about equity release up to now, so appreciate they would have to be extremely careful. If they did want to consider this option can you recommend any reputable organisation/adviser they could speak to in order to see if they can qualify?

T rang one of the debt counselling services recommended by Which? and MSE (I thought it was CCCS) and was told that they couldn't help because he has not defaulted on any payments yet. T and C also jointly went to the CAB to see a debt advisor and were essentially told the same thing - the only real advice they were given was to ring all he credit card providers and ask for a lower rate of interest.

I wil pass on the CCCS helpline no. to them to get an appointment booked with one of your debt counsellors - whilst C might prefer me to speak on T's behalf, I don't think T will want me to. I presume the appointment would be for a telephone consultation - if so, my only concern is that I would prefer the consultation to be with both T and C jointly, rather than with just T. Does CCCS do any face-to-face consultations?

Again, many thanks for your help and advice.

Regards
Graeme

Hi again Graeme.

Should T have an appointment with us and equity release be a possibility, we actually have our own in-house equity release company that could help (CCCS Equity Release). It’s a service we’ve recently set up within the charity.

We generally provide the majority of our appointments over the telephone, although we can provide a face-to-face service if T would find it particularly difficult to be able to conduct the appointment over the phone. Such appointments are limited based on the offices that have the facilities to be able to provide these.

Cheers,
Matthew.

gandl

Many thanks again Matthew
I will forward all your excellent advice to T & C.
Best regards
Graeme