Struggling with debt? Ask a debt advisor a question

Tixy

Hi Shrimper
A little of what they say is true but most of it is signficantly exaggerated.

They are describing a debt management program. How A DMP actually works is you and a third party work out a reasonable budget and see how much you can afford to pay your creditors, it allows for reasonable living costs but not lots of luxuries. If you cannot meet your minimum payments you could possibly consider a DMP. On a DMP you pay as much as you can afford to the third party each month who distribute the money to your creditors and send them a copy of your budget to prove you are paying all you can afford. They will also ask creditors to freeze interest - but creditors cannot be forced to freeze interest and no company can guarantee that your creditors will agree to (though they often will if they see you are paying what you can afford).

Your credit rating will be badly affected for 6years at least - and you have to agree not to take on any more credit until your debts are paid (in truth you wouldn't be able to anyway because your credit file will be so bad).

Now very importantly - a company like the one you mention will take a percentage of your monthly payment for their fees, as possibly the first 2months payments as well as their fees. You can get the same service (well actually a better service) for free by contacting one of the debt advice charities who will ensure all your money goes to your creditors.
Please have a read of this link - IMPORTANT - Where to seek professional impartial advice about your debts.

shrimper37

Thank you for your advice Tixy. I am not struggling as such, I always meet my minimum payment, just don't have money left for any luxuries.I just hoped this would make things easier but although my payments would go down, I think it would have an adverse effect in the long run.

This company were very pushy and now I can understand why they were. I guessed they were so keen because of the money they could make. I will look at the link you have supplied to see what I can do to help myself.

Tixy

Glad if it helped, whilst they make it sound like they are doing you a favour they are just cold callers trying to sell you something (possibly worse than double-glazing salesmen cold-calling because at leat you can't get double-galzing for free!)
- this post might also be worth a read - The Big Guide to Becoming Debt Free
And have you looked at all your outgoings to see if there is anywhere you can save money (eg checked things like your phone tariff, broadband provider, insurance providers etc are the best deals/most competitive)?

haziefantasie

I really need some advice. Having worked in property for over 10 years I lost a lot of money in the crash and found myself deeply in debt. I have reached an agreement with most of my creditors and am trying to pay everything back. The RBS turned by loans/overdraft etc into an unsecured loan of 63,000 pounds and after iniital 6 month interest only payment have been paying for the past year sum of 750 per month which is capital and interest. I have been living abroad for the lat 2 years (returning home every 2 months for approx couple of weeks) where I have been working. However now have problems with work permit and can no longer work. I have asked the bank if I can return to interest only for about 6 months but they have refused and I am now with special relationship manager. I have been trying to contact this person for the last 2 months but only when I cancelled the standing order has he been in touch. He has informed me by email that unless I continue paying full amount I will be referred to their debt recovery dept in Telford. He is calling me this week to discuss. Can you please tell me what my legal rights are in all this? The easy option would have been for me to throw the towel in 2 years ago but I really do want to pay off all my debts.

StepChange_Pavan

1ceiwasafool wrote: »

Hi,
I have a very simple question really. My situation has changed massively in the last few months. I was in a good job earning good money and had debts on credit cards as well as an unsecured loan to that effect as well.

I have since then lost my job and am currently working part time whilst I train to be a teacher which will take a few years.

I have approx £13k as a loan
and a further £7k on credit cards.

I am considering DMP, however do I need to show just my income or the household income? My wife does not know the magnitude of what I had on credit cards and this debt is actually nothing to do with her.

Please advise, as i do not want my situation to get so out of control.

Hi 1ceiwasafool and welcome to the forum,

Ad DMP could be a good option for you, but it’s a good idea to get some free and independent advice to confirm this first.

With regards to your income, it depends how you budget in your household. For example if you pay half of everything each you can just include your income and your half of the expenditure. Sometimes if it’s not as clear cut as this you might find it easier to do the household budget as a whole.

However, as you say that all the debts are in your name and if you’d prefer not to include your wife’s income, you explain the expenditure. For example you can include a comment to say ‘wife pays in full’ if you don’t pay for it, or ‘wife pays remainder’ if you split some items between you.

I hope this makes sense, but like I mentioned it may be best to go through your situation in more detail with us.

To do this you can visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

You’ve taken the first step to sorting out your money worries and we can support you with free and impartial advice along the way.

Kind regards,
Pavan

mum2one

Sorry another question, (I will eventually stop dipping my toe, - know next month get no choice).

The query I have got relates to local authority, just when I started the online process it asks do I work for local authority - I don't but I am a school goveneror, know that when I applied I coulnd't be bankrupt, a dmp at first look would take 20 yrs.... too much debt for an DRO, don't want to go down the bankruptcy route, as there be a possibility that my income will increase back to a normalish level (for me), in the next 6 months, its compliacted as its out of my hands, but would an IVA affect the governerors post, I'm not 100% up on an IVA.
(sorry) x

StepChange_Pavan

rubyjam wrote: »

Today I finally took my first steps towards sorting out my debts and completed the online dept remedy questionaire on CCCS with the intention of setting up a DMP but now I'm really worried. The advice booklet they have emailed me says the length of time it will take to pay off my debts is not realistic - help!! what does this mean??? I personally don't care how long it takes, I presume they mean the credit card/loan companies?

Hi rubyjam and well done for facing up to your money worries.

Did Debt Remedy recommend a DMP as your best option? It’s difficult to say which solution is best for you without looking at our details. I’d recommend that you contact our support team with your reference number as they will have access to your information and will be able to talk through your options with you.

I hope this helps.
Pavan

StepChange_Pavan

Comstock wrote: »

Advice about negotiating with the Student Loans Company- repayment plan.

I've just had two separate letters from the Student Loans Company, demanding a total of £1728 in repayments.

This breaks down as follows

Overpaid Grant £969

Overpaid Loan £759

I'm not sure if these are a single debt or two separate ones, but either way I'm going to have to repay them and I'm going to need to set up a payment plan and I'm currently unemployed and recieving £67.50 a week JSA.

Any advice on how to open negotations and what figure they are likely to accept? I'm willing to pay more when I find a job, but money is obviously really tight right now and this has come as a shock (although it seems to be correct). I'm not disputing this debt but I can't afford to pay very much.

Hi Comstock and thanks for your post.

The best way to work out how much you can afford is to compile a budget showing all your income and expenditure. This will show how much you have coming in, how much all your priorities such as housing, council tax, bills and food etc cost, and then you can offer them whatever is left over.

If you’d like some help with this or if you’re struggling with other debts too you can visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm.

If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

shrimper37 wrote: »

Thank you for your advice Tixy. I am not struggling as such, I always meet my minimum payment, just don't have money left for any luxuries.I just hoped this would make things easier but although my payments would go down, I think it would have an adverse effect in the long run.

This company were very pushy and now I can understand why they were. I guessed they were so keen because of the money they could make. I will look at the link you have supplied to see what I can do to help myself.

Hi shrimper37 and thanks for your post.

Tixy’s already given you some fantastic advice (thanks Tixy!), but if you have any other specific questions, you know where to ask

Kind regards,
Pavan

The_Babberer

Hi.
A friend of mine was in a Debt Management Plan (DMP) Via Debt Advisory Line (DAL). I advised my friend to contact creditors directly and use the monthly fee DAL had been taking to increase the repayment offers.
All Creditors accepted the new repayments except Barclays. First they advised they had only recd advice from DAL that the DMP had ended and they had not recd any letters from my friend.
Further letters were sent, each time with I&E but they keep ignoring the offer adding on more charges and increasing the arrears. They do keep asking for contact to come to some kind of arrangement but every time a letter is sent making a monthly offer it is ignored so no arrangement is made.
The revised offer of repayment is 3 times that what DAL were sending Barclays but they still refuse to accept a DMP from my friend.
The latest offer made is now £20 higher than the original monthly payments from the beginning of the loan to try and catch up the arrears, yet they keep ignoring the letters offering this and keep piling on charges and sending default letters.
I talked my friend into contacting the Ombudsman but their reply was that Barclays were within their right to decline an offer of repayment received directly from my friend and request a breakdown of the financial position from recognised debt counselling.
I believe that my friend has not been treated fairly. The reason is that by using a debt management company Barclays accepted a much lower payment, stopped interest and charges. By getting rid of the debt management company and doing it alone Barclays have declined the DMP and started applying interest and charges.
I now feel guilty as my attempt to help my friend get out of debt quicker and save £20 per month has ended up putting them in a much worse position with this one creditor.