Struggling with debt? Ask a debt advisor a question

drvorlon

Hi just after some initial advice as we are in a real mess..

over the years various places have thrown money at us, and we are now deep in debt and struggling...

our outgoings far outway our income now and we have no spare cash each month even for school uniforms or simple things like the kids school lunches..

when we moved house about 5yrs ago we had a little debt, a small car loan and about 10k on two cards, and I took out an unsecured loan of 24k over 7yrs (@420pm) to consolidate these debts, and also do a load of work on the new house as it needed new boiler, double glazing etc, new kitchen etc..

at the time we were both on over 20k and it was easily affordable for us both working with no kids even though the new mortgage was almost £800pm..

since then the interest rates have come down and the mortgage has halved, but we have had 2 children and my wife was out of work for a while and is now only part time due to childcare costs...

due to this we have not had enough money due to the loan and have been living from credit cards a lot when money runs out, petrol/food shopping/kids clothes etc, and every month when more goes out than I earn we have been moving money from the mortgage reserve account, and now slowly but surely it has all hit the limits....

we rotated the card debts til now to keep them all on 0% but then had to start using the old ones and in the end ran them all up and the 0%s all ran out...

this month I am £100 over my overdraft and the mortgage and car insurance hasnt even gone out yet..
I have had to move another £500 from the reserve account, which has now taken it to the limit of what we can lend back, so next month i can no longer do this...

we have cut all the non essentials and luxeries, and my salary is only used for paying bills and debts and even without me spending any of my money I am usually a few hundred short each month, my wife only earns about £650 and that has to then cover everything else, food, petrol, car costs, clothes, household goods, anything else...
we are paying about £900pm out on the debts...

when the interest rates eventually start going back up things are only going to get worse...

between my wife and I we currently have the following debts

bank loan £422pm 25mths left, balance now about £13k
card 1 (mine) £130pm balance £11k
card 2 (mine) £105pm balance appr £4.4k
card 3 (wifes) £88pm balance appr £4k
card 4 (wifes) £60pm balance appr £4k
card 5 (mine) £60pm balance appr £4.5k (on 0% til may)
card 6 (wife) £70pm balance appr £4k
card 7 (mine) £40pm balance appr £2k

our mortgage is currently £445pm
mortgage reserve account. £0pm, balance appr £12k
little or no equity left in house, value approx £120-125k, mortgage balance £112k (plus £12k owed on reserve account.)

we also have store cards but not much on them thank god...
next £50pm balance appr £500
argos £0pm (all on pay nothing for 9mths) balance £500

my wife works p/t due to childcare costs and earns appr £8k
My basic gross is £23k and I get some callout overtime but its random and variable, ranging from £2-4k per year..
my average net monthly is about £1500-1600 but my outgoings alone are often around £2k.

all our payments are up to date and my credit rating is all still good, but only by using money from the mortgage reserve account to live, and this has now run out..
next month i either go way, way overdrawn or start to miss the full amount on some card payments...

the bank loan was over 7yrs and only has about 25mths left.
I have been back to the bank and asked them to restructure the balance over a longer term for me
to lower our monthly payment as 13k over 7yrs again is only about £200pm, and they refused to help..

would they be more helpful if i rang up the loans team instead of just seeing a personal banker in branch??

if i contact the credit card companies and tell them i wont be able to make the full payments for a while, what is their response usually?? the interest on the one barclaycard is about £100pm and the min payment which is all i can afford is £130....

not including the reserve account of £12k which is secured on the house and has no monthly payment and just accrues interest, we have about £50k of other debt...

I put our details into the CCCS site and it mailed me that a DMP for us would be £750pm, but thats not really a lot less than we are paying now and wont really help us any...

we took on all this debt in good faith and i do want to pay it all back, but it appears to me that once i stop meeting the minimum payments and screw my credit rating up that an IVA is then rapidly becoming our only answer....

its getting us really down and depressed, my wife and I are constantly rowing and I am constantly miserable..
I just cant see any way out of it...

I have even just taken out a second life insurance for £50k to cover this debt as my mortage one only covers the mortgage, and it was only about £8pm as I am so scared as to what will happen to my wife to be left with thisa debt should anything happen to me, and now I am even thinking if thats the easiest solution to it... !
just loosen some wheel nuts and bomb down the motorway??

StepChange_Pavan

1worried1 wrote: »

Hi, I am writing on behalf on my brother who has had credit card debt for many years and has finally acepted my offer of help to sort them out!
we requested credit file from experian and had written the following letter to everybody on there as the debts are all at least 4 years old and he has no documentation relating to any companies or debt collection agency's

I hereby formally request a copy of my Consumer Credit Agreement, pursuant to s.77/78 of the Consumer Credit Act 1974 together with my account statement.

I require you to provide me with a true copy of the credit agreement relating to any account you deem to be mine, together with any other documentation the Act requires you to provide. I expect you to comply fully and properly with this request, within the statutory time limit (12 + 2 days). You are reminded that should you fail to comply with my request; the provisions of s.77 will apply.

If it is your view that you are not the creditor, s.175 of the CCA 1974 applies in the case of a simple assignment, and places a duty upon you to pass this request to the creditor. In the case of an absolute assignment, you are a creditor as defined by s.189. If you contend that you purchased the rights but not the duties of any agreement, you are reminded that s.189 of the Act is clear that an assignment is of both rights and duties.

Your attention is drawn to ss.5(2), 3(b),6 and 7 of the Consumer Protection from Unfair Trading Regulations 2008 (CPUTR). I enclose a cheque issued on my behalf in the sum of £1.00, which is the statutory fee. Note that these funds are not to be used for any other purpose.

If you are unable to comply fully and properly with this request, you should confirm this in writing at the earliest opportunity, and certainly within the statutory time limit for compliance, and return the fee and then remove the incorrect entry from your systems.

I do, expect the main actions to be dealt with, as matter of course, and look forward to hearing from you within the prescribed timescales quoted.


Yours faithfully
Is has been more than the 14 days and one company (which hols 3 of the debts) hasn't replied so I assume we can now ask them to write off the debt? do you have a sample letter for this please?
also one has requested we send them a copy of the experian report? why would they need that? we have given name and address allready on the first letter? what would be your advise on the next letter we send to them and do you have a sample for that?
a couple have sent the £1 back and said the debt is no longer with them so can I request they remove the entry on the credit file? do you have a sample letter for this also?
another has sent the £1 back and said they don't know what the original debt is for as they have only bought the debt and can't supply any more information? it that possible?
sorry about so many questions, and thank you in advance for the answers

Hello 1worried1 and thanks for your post.

I’m not sure why one of them has asked for a copy of the credit report. I’d recommend that you write back and ask them why they need this information. As a creditor, they should have access to this anyway?

With the creditors that say they no longer hold the debt, you can ask them who the debt has been passed on to. In the letter, you asked for them to pass it on to the next creditor so they should give you this information. You can ask them to remove the entry on the credit file; however it’s unlikely that they’ll agree as all information stays on there for 6 years. The only way around this would be to put a note on if the debt was satisfied (which it doesn’t seem to be).

The creditor that doesn’t have the original debt information should have access to it. They would need to provide proof of the original debt so you know what you’re paying them for.

It’s unlikely that the creditor that hasn’t responded will write the debts off unless there is a good reason to. You don’t mention anything about your brother’s situation and whether he’s in a position to repay any of the debts. Rather than looking to write all the debts off, it could be a better idea for him to get some detailed advice so we can advise him on his options. Depending on his budget and level of debt, there could be a number of solutions available to him.

He can use our online Debt Remedy (http://www.cccs.co.uk/ref/drcu) or call our free helpline on 0800 138 1111. If he prefers, we can speak to you on his behalf (with his permission).

I hope this helps.

Kind regards,
Pavan

StepChange_Pavan

drvorlon wrote: »

Hi just after some initial advice as we are in a real mess..

over the years various places have thrown money at us, and we are now deep in debt and struggling...

our outgoings far outway our income now and we have no spare cash each month even for school uniforms or simple things like the kids school lunches..

when we moved house about 5yrs ago we had a little debt, a small car loan and about 10k on two cards, and I took out an unsecured loan of 24k over 7yrs (@420pm) to consolidate these debts, and also do a load of work on the new house as it needed new boiler, double glazing etc, new kitchen etc..

at the time we were both on over 20k and it was easily affordable for us both working with no kids even though the new mortgage was almost £800pm..

since then the interest rates have come down and the mortgage has halved, but we have had 2 children and my wife was out of work for a while and is now only part time due to childcare costs...

due to this we have not had enough money due to the loan and have been living from credit cards a lot when money runs out, petrol/food shopping/kids clothes etc, and every month when more goes out than I earn we have been moving money from the mortgage reserve account, and now slowly but surely it has all hit the limits....

we rotated the card debts til now to keep them all on 0% but then had to start using the old ones and in the end ran them all up and the 0%s all ran out...

this month I am £100 over my overdraft and the mortgage and car insurance hasnt even gone out yet..
I have had to move another £500 from the reserve account, which has now taken it to the limit of what we can lend back, so next month i can no longer do this...

we have cut all the non essentials and luxeries, and my salary is only used for paying bills and debts and even without me spending any of my money I am usually a few hundred short each month, my wife only earns about £650 and that has to then cover everything else, food, petrol, car costs, clothes, household goods, anything else...
we are paying about £900pm out on the debts...

when the interest rates eventually start going back up things are only going to get worse...

between my wife and I we currently have the following debts

bank loan £422pm 25mths left, balance now about £13k
card 1 (mine) £130pm balance £11k
card 2 (was an egg card) £105pm balance appr £4.4k
card 3 (was wifes egg card) £88pm balance appr £4k
card 4 (wifes) £60pm balance appr £4k
card 5 (mine) £60pm balance appr £4.5k (on 0% til may)
card 6 (wife) £70pm balance appr £4k
card 7 (mine) £40pm balance appr £2k

our mortgage is currently £445pm
mortgage reserve account. £0pm, balance appr £12k
little or no equity left in house, value approx £120-125k, mortgage balance £112k (plus £12k owed on reserve account.)

we also have store cards but not much on them thank god...
next £50pm balance appr £500
argos £0pm (all on pay nothing for 9mths) balance £500

my wife works p/t due to childcare costs and earns appr £8k
My basic gross is £23k and I get some callout overtime but its random and variable, ranging from £2-4k per year..
my average net monthly is about £1500-1600 but my outgoings alone are often around £2k.

all our payments are up to date and my credit rating is all still good, but only by using money from the mortgage reserve account to live, and this has now run out..
next month i either go way, way overdrawn or start to miss the full amount on some card payments...

the bank loan was over 7yrs and only has about 25mths left.
I have been back to the bank and asked them to restructure the balance over a longer term for me
to lower our monthly payment as 13k over 7yrs again is only about £200pm, and they refused to help..

would they be more helpful if i rang up the loans team instead of just seeing a personal banker in branch??

if i contact the credit card companies and tell them i wont be able to make the full payments for a while, what is their response usually?? the interest on the one barclaycard is about £100pm and the min payment which is all i can afford is £130....

not including the reserve account of £12k which is secured on the house and has no monthly payment and just accrues interest, we have about £50k of other debt...

I put our details into the CCCS site and it mailed me that a DMP for us would be £750pm, but thats not really a lot less than we are paying now and wont really help us any...

we took on all this debt in good faith and i do want to pay it all back, but it appears to me that once i stop meeting the minimum payments and screw my credit rating up that an IVA is then rapidly becoming our only answer....

its getting us really down and depressed, my wife and I are constantly rowing and I am constantly miserable..
I just cant see any way out of it...

I have even just taken out a second life insurance for £50k to cover this debt as my mortage one only covers the mortgage, and it was only about £8pm as I am so scared as to what will happen to my wife to be left with thisa debt should anything happen to me, and now I am even thinking if thats the easiest solution to it... !
just loosen some wheel nuts and bomb down the motorway??

Hi drvorlon and welcome to the forum.

Being in debt can be an extremely stressful time, but you’ve come to the right place for help and there will be a solution for you.

From the figures you’ve given, it sounds as though you could be debt free within around 5 years if the interest and charges are frozen. It’s difficult for me to give detailed advice as I don’t have access to your budget, but hopefully I can try and put your mind at ease a little.

An IVA could be an option, but from the figures you’ve put into Debt Remedy it doesn’t seem to be for you. An IVA is a form of insolvency and yes, both an IVA and a DMP would affect your credit rating but I wouldn’t imagine that you’ll be looking for further credit any time soon.

I’d really recommend that you contact our web support team. Their contact details will be in your advice booklet and they’ll have access to all your information. You can chat online rather than call if you prefer.

They will be able to look at your budget and if you feel that £750 per month is still too high, they will look at the areas you feel you want to change. Although this isn’t much less than what you’re currently paying, it’s based on you’re the figures you put in and can easily be changed if needed. Remember that the £900 will also increase once the 0% periods finish too.

I hope this helps, but please get in touch so that we can discuss your options in more detail and explain why an IVA might or might not be right for you.

Kind regards,
Pavan

sickasachip13

Hi drvorlon

I'm not a credit expert/counsellor but thought I'd say hi. I know that the £750 isn't that much less, on paper, than you're paying now, but if most of those creditors freeze interest then it's £750 being paid towards the actual debt rather than % payments. I know this will benefit you more in the long-term than the short though.

I'd definitely say to give CCCS a ring and talk to an adviser - it may be that there are areas of additional spending for you, that are necessary and they can talk you through the applicable amounts for each area.

We went on a DMP over a year ago and it's really been a remarkable relief. I did a short blog about it too - details can be found by googling the info in my sig.

Best of luck

SAAC

(sorry for butting in Pavan!!)

drvorlon

thanks for the quick replies already guys...

i had a thought after posting that really i dont like doing the overtime tbh, and if it helps bring a dmp/iva down by my earning less then i just wont do it, and its hit and miss anyway, some months I can get a few hundred, some months I dont get offered any at all, and thats happening more and more lately tbh, it used to be about £400-500, regular, but last few months have not even been £100pm, so i shouldnt really include it in my income and should go by my basic pay incase it dries up totally...

so i just did a new budget thing on the CCCS site using my basic pay and a more accurate set of our outgoings and debts, and now its saying we only have £360pm spare and suggests we do an IVA, as it would take over 12yrs to clear on a DMP...

the thing thats holding me back from doing an IVA is that out of the £900pm or so we pay on the debts now, almost half of that is for just that one loan and in just over 2yrs that will be gone and its almost one third of our total debt, giving us an extra £420pm to live off and pay off other debts with...
if we could struggle on for those two years i would rather it tbh, but we have no money to do it unless the card companies help us out by freezing interest or accepting reduced payments for the short term..

I rang barclaycard financial helpline today about freezing my interest or helping me in some way and they basically said i need to make them a pro-rata offer of what i can pay monthly allowing for treating all my other cards equally before they can take things further will send me some paperwork and hung up, and were not very helpful..!!

i am thinking of having another go at the bank to restructure the loan (which i dont see happening really) and then writing to all our card providers explaining our situation listing our income and outgoings and total debts, asking for some interest relief, and stating we cant make the minimum payments on all of them for the next 12months or so and they will have to accept it, as we just havnt got it... has this ever worked??
which are they more likely to accept..??
if i offer the same to all ie say can only pay 50% of min payment, or as i owe barclaycard double some the other cards, will they expect to be offered more than the others??

we have still got to live and provide for our kids and at the moment we cant do that... by the time we pay everything we are hundreds overdrawn..
I have had to lend some money from my 70yr old mother today just to be able to buy us food for the rest of the month...
I feel so ashamed to be in this situation lending money from my mother who is struggling herself some months!!!

edit.
just had what i suppose is some good news from my wife...
i assumed they were her balances based on what she said last to me, 4,4,4, but she said its more like 3,1500, and about 400...
so at least thats 7-8k suddenly gone from our debt!!!

System

drvorlon wrote: »

thanks for the quick replies already guys...

i had a thought after posting that really i dont like doing the overtime tbh, and if it helps bring a dmp/iva down by my earning less then i just wont do it, and its hit and miss anyway, some months I can get a few hundred, some months I dont get offered any at all, and thats happening more and more lately tbh, it used to be about £400-500, regular, but last few months have not even been £100pm, so i shouldnt really include it in my income and should go by my basic pay incase it dries up totally...

so i just did a new budget thing on the CCCS site using my basic pay and a more accurate set of our outgoings and debts, and now its saying we only have £360pm spare and suggests we do an IVA, as it would take over 12yrs to clear on a DMP...

the thing thats holding me back from doing an IVA is that out of the £900pm or so we pay on the debts now, almost half of that is for just that one loan and in just over 2yrs that will be gone and its almost one third of our total debt, giving us an extra £420pm to live off and pay off other debts with...
if we could struggle on for those two years i would rather it tbh, but we have no money to do it unless the card companies help us out by freezing interest or accepting reduced payments for the short term..

I rang barclaycard financial helpline today about freezing my interest or helping me in some way and they basically said i need to make them a pro-rata offer of what i can pay monthly allowing for treating all my other cards equally before they can take things further will send me some paperwork and hung up, and were not very helpful..!!

i am thinking of having another go at the bank to restructure the loan (which i dont see happening really) and then writing to all our card providers explaining our situation listing our income and outgoings and total debts, asking for some interest relief, and stating we cant make the minimum payments on all of them for the next 12months or so and they will have to accept it, as we just havnt got it... has this ever worked??
which are they more likely to accept..??
if i offer the same to all ie say can only pay 50% of min payment, or as i owe barclaycard double some the other cards, will they expect to be offered more than the others??

we have still got to live and provide for our kids and at the moment we cant do that... by the time we pay everything we are hundreds overdrawn..
I have had to lend some money from my 70yr old mother today just to be able to buy us food for the rest of the month...
I feel so ashamed to be in this situation lending money from my mother who is struggling herself some months!!!

edit.
just had what i suppose is some good news from my wife...
i assumed they were her balances based on what she said last to me, 4,4,4, but she said its more like 3,1500, and about 400...
so at least thats 7-8k suddenly gone from our debt!!!

Hi and thanks for your reply.

Regards the overtime, in an IVA we would look at calculating your guaranteed income. If the overtime is not guaranteed it may not be included in the original calculation.

However, there is an incentive to do overtime if it is offered. You would usually be allowed to earn 10% above you basic wage with no change to contributions into the IVA, above the 10% you would need to pay 50% of any overtime into the IVA and you get to keep the remaining 50%.

If an IVA is the best advice you might want to call our specialist team to discuss your options. This should be in the Debt Remedy pack you received.

I hope this helps.

Kind regards,

Mat

Scully38

I'm really struggling at the moment. I've been trying to sell my house, but it's fallen through 3 times and now I can't afford to live here. I owe my sister 45k as part of my mom's will, she's getting antsy and blames me for the house sale not going through, when in fact i'm desperate to sell.

I've been on JSA for 6 months and can't live like this for much longer, this isn't living. I've literally had no food for 4 weeks and have lost nearly two stone this month. I've just been living on coffee to survive and have no strength left to do anything because i've had no money for food. I've had to use all my JSA money for the last two months to pay for my toilet being broken. I've got no family apart from a sister who is taking me to court for the rest of the will money (she's had 30k cash already). She knows i'm struggling but doesn't care.

Because I own my own home (was my mom's), and no mortgage, I don't qualify for any help. I've been to the cAB and they say I fall through all the cracks because I own property. I've got the Gas, Electric, Water and TV licensing people threatening to take me to court as i've not paid them. The TV liensing people are going to take £93 out of my account on the 23rd December leaving me with £27 for two weeks, £15 of that has to pay for train fares and buses to sign on. I can't even feed my 2 cats. I've sold all my jewelery to last me this long and have no savings at all. I'm at my whits end.

Even speaking with the Elec and Gas people said they have to take a minimum of £30 a month,and with it being winter, I have no central heating, only a gas fire. I've been living and sleeping in the living room with blankets and jumpers on, just to stay warm. Now with the snow making it freezing, I just don't know what to do. I've done an outgoings thing and have no money left for food, what do I do? How can I pay for everyday things?

Gas and Elec £60
Water £15
TV Lic £93 then £43
Insurance £20
Phone and broadband to get a job £55
Train £30 per month to get to job center

Total is £273. I only get £230 a month to live on.

How do I survive this winter? I just don't know what to do.

Scully38

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 0
Partners monthly income after tax....... 0
Benefits................................ 220
Other income............................ 0
Total monthly income.................... 220

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 30
Mobile phone............................ 00
TV Licence.............................. 93
Satellite/Cable TV...................... 0
Internet Services....................... 25
Groceries etc. ......................... 0
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 328


Assets
Cash.................................... 0
House value (Gross)..................... 230000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 230000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
credit card....................1799......30........15
Total unsecured debts..........1799......30........-


Monthly Budget Summary
Total monthly income.................... 220
Expenses (including HP & secured debts). 328
Available for debt repayments........... -108
Monthly UNsecured debt repayments....... 30
Amount short for making debt repayments. -138

Personal Balance Sheet Summary
Total assets (things you own)........... 230,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,799
Net Assets.............................. 228,201

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

I've not put in anything for food as I have no money to eat, but god dam it i'm dyin for a MacyD

liquorice27

i have recently recieved a credit collections agency letter demanding £1204 from a previously unpaid credit card or recieve a doorstep visit. I was under the impression this debt had been erased as it has been over 8 years?plz help

deemul

Firstly CCCS are brillant... I have been on my DMP for 1 year and have been able to sleep, open bills without the fear of lossing my home THANK YOU.

I have a question please advise. I'm on a a budget each month and usually get there however I have approx 4 yrs left, due to having recently having won a PPI claim i have £5200 coming my way to which i have to pay the tax on the interest. so approx £5000 left would i be allowed to keep £1000 in an account for a rainey day, as my car is becoming more and more unrealiable and would use this when the day comes to get another vechile that i do need for work purposes (without which none of my debt would get paid off)
I would then contact CCCS to make an overpayment off 4K or do I contact creditors to see if any would settle for a lesser figure than owed ie. halifax are currently approx 4900 and just might settle for 4000 resulting 900 being used else where to clear other debts.

thank you and PLEASE advise:xmassign: