Struggling with debt? Ask a debt advisor a question

StepChange_Pavan

drtommy wrote: »

Hi, I would really appreciate some advice.

I am in debt to the tune of about £18,000 (about 5000 loans, 10000 credit cards and 3000 overdrafts) exluding all my student loan. Ive tried to keep the credit cards low interest on a 6% barclaycard for life but recently my graduate accounts have started charging high interest for overdrafts.

I got into debt originally during my undergrad days as my student loan didnt cover my living costs etc and my summer job wasnt paid very well, so everything went on credit, and I wasnt any good at budgeting. I now am doing a PhD and get a stipend of 1150 a month (tax free) which would be plenty for me if I didnt have at least half of it going straight out on debt repayments. I dont have any assets or large outgoings, I worked my monthly budget as around 750-800 month for everything (if i didnt have to pay back debt). For the last 3 years Ive just been shuffling debt around, and its not reducing at all, as a lot of the time I have to borrow more to live on. however Ive never missed a payment to any creditor and I recently checked my credit score as 572 (not sure if thats any good).

I am aware of a DMP (I did the CCCS online test and applied for a pack) and think this may be a good thing for me, but I am slightly hesitant because despite struggling with debt havent defaulted ever and dont want to demolish my credit rating further??

I finish my PhD in March 2012, and providing I can get a job expect my circumstances to improve (salary circa 28-30K). My family know Im a 'poor student' but I dont want to ask them for money as I know they dont have any spare. I have told my girlfriend about my situation and we want to move in together in March, just renting, although in a dream world Id like to get a mortgage with her in a couple of years (but am realising that I need to sort my debt out first).

Should I continue as I am, sticking to my tight budget and keeping debt as low as possible, and wait for my income to improve, or just take a credit rating hit and get on a DMP or something else?

I cant thank you enough for any help.
Tom

Hi Tom and welcome to the forum.

It’s difficult for me to say what your best option would be without looking at your budget in more detail.

It really depends on how tight your budget is. If you feel you can carry on with your current budget without jeopardising your wellbeing, this could be an option. However, it’s not worth sacrificing your health to save your credit file. Especially because there aren’t any guarantees that you’ll get a well paid job as soon as you graduate.

As you’ve already completed Debt Remedy, I’d recommend that you contact our web support team. They’ll have access to all your information and will be able to discuss your options with you in more detail.

Kind regards,
Pavan

StepChange_Pavan

silverbreeze wrote: »

Hi

Basically, at the moment I am in a job that is going nowhere but pays me a decent salary. An opportunity has come up for me to take a training position in a career that i have wanted to get into for many years with a very affluent and reliable company. I know they take a great deal of care of their employees as my partner has worked for them for years

The downside of it is that I would have to take a £9k wage decrease but over the 2 years of the on the job training i would increase to around £3k more than what i am on now with the potential for a considerable amount more as i gain more experience.

I have done the calculations and i could afford to do this if i could somehow freeze my debts during my training. I have 2 cc's; one with around £4500 on a low interest rate and the other is around the same on 0% interest. min payments work out to around £150 ( i pay off more though) Is there any way that this can be done if you are furthering your career or any advice of any form would be greatly appreciated.

Kind regards

Hi silverbreeze and thank you for your post.

I can’t guarantee whether your creditors will agree to freeze your interest and charges, but it seems as though the more important decision is whether or not to take the job opportunity.

If you took the new job you would need to compile a budget, with your new income. You can then offer to pay as much as you can based on this. You can also explain to them that your income will potentially increase in 2 years and ask for their consideration in freezing the charges in the mean time.

If you do make reduced payments, your creditors are entitled to follow the standard debt collection process and it’s likely to affect your credit rating.

If you need any more detailed advice on your debt options you can use our online debt counselling service Debt Remedy (http://www.cccs.co.uk/ref/drcu).

Ultimately, you would need to weigh up what’s more important – furthering your career and a wage increase in the long term or repaying your creditors. You may also want to consider what would happen if something happened to the new job – if they cut their training budget for example.

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

boogiequeenie wrote: »

Thank you soooo much CCCS_Pevan. You really don't know how much good you do posting on here. I know, from experience, how desperate people can get in this terrible situation. It affects all of us, even those who are meant to be hardened to it. ;-)

I have spoken to DH. Like a lot of people he's sticking his head in the sand to a point (although I'm pulling it out by the hair! lol)

He has an ex-marital home that he is looking to rent out. It is already being rented out and he has an awkward tennant that won't leave; has trashed the house; owes him arrears. We are in the process of evicting him. Once it has been rented out there is a chance that he could even make £20-£30pm on it!!

So, I think it may be prudent to go on the DMP for £1pm for 6months. If the situation does not look like it will improve over the next 6months then I shall get him to get on the phone to you and discuss other options.

As for my income, it wasnt mentioned when he called CCCS initially. I was worried that, should he have to go bankrupt, that my income would be taken account. I don't want to be embroiled in bankrupcy when I've already been down that path.

Would you agree with this course of action?

Hi again,

Ah thanks for the lovely feedback – it’s always good to know if you found our advice useful.

It sounds like getting a new tenant and staying on the £1 plan for now would be a good option.

With regards to your income, we can discuss this when it comes to his 6 month review. Like I mentioned, your income doesn’t have to be included but his budget would need to show a fair split. For example, he couldn’t pay all of the bills to ensure he wouldn’t have to pay anything into the bankruptcy. It would just need to show that you’re both contributing towards the household in a fair way.

It’s sometimes easier to include both incomes to show that you’re not hiding anything, but if you’d prefer we can just insert comments such as ‘wife pays half’ next to the expenditure that you contribute towards.

I hope this makes sense.

Kind regards,
Pavan

StepChange_Pavan

maxandmatty wrote: »

need some help - have been paying both single and joint debts directly to my creditors for twelve months now after a bad DMP arrangement. The husband and I are now in the process of separation and need some advice - can I pause payments till my benefits are sorted? if so is there a template letter I can use? how do we sort the joint debt - it has a ccj attached to it and is with Link financial and is for £22000.

Hi maxandmatty and thanks for your post.

With regards to making payments until your benefits are sorted, I’d recommend that you write to them and make them aware of your situation. Just offer them token payments of £1 per month until you start to receive some income; then you can review your offer.

For the joint CCJ, you are both joint and severally liable. This means that if one of you stops paying, they can chase the other for the whole amount (it’s not as simple as splitting it 50/50).

Because it’s a priority, you need to come to an arrangement with your husband to see who will pay what. If you can’t or he doesn’t agree to pay, you can always vary the amount to something that you can realistically afford.

If you’d like some more detailed advice and support, you can call our free helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm.

Kind regards,
Pavan

ishta

Hi

I am new to this forum so please excuse if this has been put in the wrong place.

I have several issue but would like to begin with this one - just putting it out there to see if anyone can guide me.

Some years ago I had two sole trader business accounts with credit cards attached, a savings account, a normal current account and a personal credit card with the HSBC bank, My business was very small and turned over very little money.

In 2001 i became very ill having suffered a stroke and due to the nature of my business was unable to continue.

My business credit cards were for £500 for one and £1000 for the other, I was paying off the credit each month from the business accounts.

I had used all the credit on both these cards and £3000 on my personal credit card.

I was making the payments each month until it became obvious that I could no longer keep these payments up.

I visited the bank and explained my situation and asked them to put me to debt in order to stop the interest payments from building

I destroyed all my cards and asked them to close down the accounts which they refused to do.

I took responsibility for the money owed and agreed to come to an arrangement that I could afford, All this was in my name alone.

The total debt amounts to about £5000.

I am living on pension credit and a small state pension - I live in a rented furnished property with my husband and we have no savings or property of worth.

For all these years I still keep getting letters from debt collection agencies who have bought these debts and trying to get payments off me. I have letters from three debt collection agencies all trying to get money for the same one.

In despair I wrote to HSBC and begged them to take me to court because at least it may stop the complication. They appointed Dg solicitors to collect from me £20 a month which I agreed to and started paying every month for almost two years.....then I got a leter from another debt collection agency asking me to agree to make payments to them for the same debt, I emailed HSBC and told them that until they sorted this out i was not paying another penny and wanted them to amalgamate all the debts into one payment plan for which I could only still offer £20 a month and decide who this was to be paid to.

After 60 emails to their complaints dept and having received over 500 letters from various debt collection agencies, having sent several letters to them all myself this has still not been resolved!!

I am 63 with a heart condition and feel that after everything they have put me through they should owe me money!!

My husband is about to inherit his parents house, it will be his house in his name alone and I am worried that if I die they will make him sell his house to pay these debts.

They all keep promising to take me to court but never commit to this, I do not even open the letters they send anymore as it saves stress.

My questions are
1) what can I do to make them stop because I have tried everything I know
and
2) can my husband be made to sell his house in the future to pay these debts if I die.

I have only come on here because I am now desperate to find a way to make this stop.

Thank you for your time

StepChange_Pavan

EmmBee1037 wrote: »

Hi, I'm new so not sure I'm putting my query in the right place! I would be grateful for any help or advice.

I was divorced 4 years ago and the divorce agreement was that my ex would both keep the house, but also responsibility for the debt he accrued in our joint names. I fully understand that joint debt, whoever responsible, would reflect on us both.

I have have chased him repeatedly to remove my name from the mortgage, but have recently discovered that he has been made redundant and has payment plans/missed payments with 3 loans that I am also named on. He has defaulted on one, and the other 2 he has arranged payment plans with, so each month, my credit score is being racked up with 'missed payments' as there is still money outstanding. My credit score has dropped to the lowest level as a result of this and I have been refused for credit that I need to get my own individual finances back on track. Where do I stand with this, what can I do and do I have any reasonable credit options so that I can start to control my finances?

Hi EmmBee1037 and welcome to the forum

Unfortunately if the debts are in joint names you are both joint and severally liable. So if he stops paying you can be pursued for the remaining debt in full.

Was the divorce agreement legally binding? If you have anything in writing you may need to get legal advice on this.

From the creditors point of view they will continue to chase you for the money as you are still named on all of the debts.

You would need to ask your creditors to remove the late payments and defaults but unless you have anything that’s legally binding which removes your liability, it’s unlikely that they’ll agree to this.

This article on improving your credit file may help: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Kind regards,
Pavan

StepChange_Pavan

ishta wrote: »

Hi

I am new to this forum so please excuse if this has been put in the wrong place.

I have several issue but would like to begin with this one - just putting it out there to see if anyone can guide me.

Some years ago I had two sole trader business accounts with credit cards attached, a savings account, a normal current account and a personal credit card with the HSBC bank, My business was very small and turned over very little money.

In 2001 i became very ill having suffered a stroke and due to the nature of my business was unable to continue.

My business credit cards were for £500 for one and £1000 for the other, I was paying off the credit each month from the business accounts.

I had used all the credit on both these cards and £3000 on my personal credit card.

I was making the payments each month until it became obvious that I could no longer keep these payments up.

I visited the bank and explained my situation and asked them to put me to debt in order to stop the interest payments from building

I destroyed all my cards and asked them to close down the accounts which they refused to do.

I took responsibility for the money owed and agreed to come to an arrangement that I could afford, All this was in my name alone.

The total debt amounts to about £5000.

I am living on pension credit and a small state pension - I live in a rented furnished property with my husband and we have no savings or property of worth.

For all these years I still keep getting letters from debt collection agencies who have bought these debts and trying to get payments off me. I have letters from three debt collection agencies all trying to get money for the same one.

In despair I wrote to HSBC and begged them to take me to court because at least it may stop the complication. They appointed Dg solicitors to collect from me £20 a month which I agreed to and started paying every month for almost two years.....then I got a leter from another debt collection agency asking me to agree to make payments to them for the same debt, I emailed HSBC and told them that until they sorted this out i was not paying another penny and wanted them to amalgamate all the debts into one payment plan for which I could only still offer £20 a month and decide who this was to be paid to.

After 60 emails to their complaints dept and having received over 500 letters from various debt collection agencies, having sent several letters to them all myself this has still not been resolved!!

I am 63 with a heart condition and feel that after everything they have put me through they should owe me money!!

My husband is about to inherit his parents house, it will be his house in his name alone and I am worried that if I die they will make him sell his house to pay these debts.

They all keep promising to take me to court but never commit to this, I do not even open the letters they send anymore as it saves stress.

My questions are
1) what can I do to make them stop because I have tried everything I know
and
2) can my husband be made to sell his house in the future to pay these debts if I die.

I have only come on here because I am now desperate to find a way to make this stop.

Thank you for your time

Hi Ishta and thank you for your question.

Firstly, your husband wouldn’t be liable for any of your debts if you die as they’re in your sole name only. Provided that none of the assets are in your name, they cannot claim against them.

In terms of your options, it’s difficult to give you detailed advice without knowing more about your situation. I’d recommend that you put together a budget to work out how much you can realistically afford each month. Once you’ve done this you can send them a copy and stick to paying this amount regardless.

If you’d like some more detailed advice on your options you can visit our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu).

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.

Kind regards,
Pavan

dough

Hi

Looking for a bit of advice. I am planning on doing a DMP with CCCS but have a couple of questions.

I have a couple of payday loans running, should I clear these before starting DMP to reduce interest? (would delay start of DMP for 1-2 months)

Many of my creditors haven't been in touch for some time, can I return signed agreement using figures from credit file or should I write to creditors asking for statements?

Many thanks
dough

scoobyni

Hi
This is my first time so please bear with me, Last year my wife lost her job, unknowing to me (I work away from home quite a bit) we missed three mortgage payments, I have since found that my mortgage is now £6000 in arrears, They had initially started repossession proceedings against me however my wife had got a new job and spoke to them in repaying the debt, We had offered to pay £1000 up front and then increase our monthly payment, They wished we increase the monthly payments by £400 until the rest of the money was paid back... I cant afford an extra £400.
They have now contacted me again and said that they have refused the offer, they wished for us to increase the upfront payment.. I dont know what to do.. I am really scared that I am going to lose my home.
Any advice would be greatly appreciated.

StepChange_Pavan

dough wrote: »

Hi

Looking for a bit of advice. I am planning on doing a DMP with CCCS but have a couple of questions.

I have a couple of payday loans running, should I clear these before starting DMP to reduce interest? (would delay start of DMP for 1-2 months)

Many of my creditors haven't been in touch for some time, can I return signed agreement using figures from credit file or should I write to creditors asking for statements?

Many thanks
dough

Hi dough and thanks for your question.

I’d recommend that you give us a call so that we discuss your situation in more detail with you – A DMP might not be your best option and there could be other solutions available to you.

With regards to your balances, we would need sort code and account details for each of your debts; so it would be better if you could get up to date statements.

You can call us on 0800 138 1111 to speak with an advisor. We’re open Monday to Friday 8am - 8pm. It may be possible to refer you directly to a counsellor for immediate advice, but if not, we will arrange for an appointment to be booked at a time convenient for you.

Kind regards,
Pavan