Struggling with debt? Ask a debt advisor a question

StepChange_Pavan

suzy99 wrote: »

Hi
I have approx £8,500 of debt that I have accumulated through payday loans, a bank loan, store card and credit cards that I am hugely embarrassed of. I took these out to tide me over during rough times. I have a poor credit rating and don't know what to do now. I have buried my head in the sand for too long but now want to address it. Am I best in a dmp or a debt consolidation loan?
Any advice would be much appreciated.
Thanks

Hi suzy99 and welcome to the forum.

It’s difficult to say which debt solution is best for you without looking at your situation. But we don’t usually recommend taking out consolidation loans as it can often make your situation worse in the long term. You can have a read through our blogpost on consolidation loans which goes into a bit more detail about why we don’t recommend them: http://moneyaware.co.uk/2011/04/to-debt-consolidate-or-not-to-debt-consolidate/.

A DMP could be for you but we’d need to look at your circumstances in a lot more detail to be able to advise you on 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 and Saturdays 9am – 3pm.

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

cambsno wrote: »

Right, done the CCCS budget and it suggest IVA, before I set all this up I am in the process of getting a new bank account. My question is what do I do immediately about creditors?

- Ring them, say having difficulties and plan to do an IVA?
- Ring them and not mention the IVA and try to pay a token amount like £10 for this month?
- Not do anything but cancel DDs and by the time they write to me will have started IVA?
- Continue to pay, although this will simply be taken from overdraft and make that worse?

Hi cambsno and thanks for your post.

It’s best to offer token payments of whatever you can afford and make them aware that you’re seeking help from us. It might also be helpful to give them your client reference number.

I hope this helps.

Kind regards,
Pavan

Johnsmoney

Hi - I've been getting some advice from one of the (non profitmaking) Helplines re a 18K debt. They seem to be pointing me towards an IVA. After reading some of the posts on this and other forums, I got the impression that many people prefer Bankruptcy - not because its the easy way out - but because it allows you to wipe the slate clean quicker to start afresh. The Helpline have said that even if I go for bankruptcy I may well be paying as much to that as I would for an IVA...on a monthly basis. Whilst I know there are set up costs in the region of £700 for bankruptcy - what is the position for my salary - currently !2k a year. IVA will cost me £150 a month - if I go for bankruptcy will my creditors also be allowed to a share of my income - and for how long? Thanks.

StepChange_Pavan

tangohotel wrote: »

Hello,
I'm very new to this site so please excuse me if this thread is posted in the wrong place. Furthermore I expect this type of question has been asked many times, so apologies if I'm going over old ground.
I wondered if anybody could offer me some advice or if anybody is/has been in a similar situation and if so what they have done to tackle it.
I (wife and I jointly) currently have accumulative debts of 30k. These are made up of an unsecured loan for around 21k and then several credit cards. I have a mortgage for 130k and a house worth around 155k. My wife and I have decent-ish jobs, however she has gone part time since having our first child and this has obviously had an impact on our income.
We've always managed to make the repayments on these debts but it's a constant struggle. Recently though we have had to turn to the credit card to make it through the month, so much so that this time last year we owed 24k.
I'm at a point where I'm constantly worrying about these debts, it's starting to affect my health and family life. I don't know which way to turn, I've looked at several options i.e. a secured loan for the whole 30k, selling our home to release the equity, even IVA / bankruptcy is a consideration. The truth is I have no idea what to do and I'm not at all familiar with IVA's or any other form of debt management plan. I wondered what the experts would advise or anybody else that has any ideas. At this stage I have managed to meet all payments but I'm not sure I'll be able to do that soon.
Many thanks for reading, any advice appreciated!

Hi tangohotel and welcome to the forum.

There could be several different options available to you, but we’d need to look at your situation in a bit more detail to be able to advise you.

I’d recommend that you 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 and Saturdays 9am – 3pm.

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

mlt

Hi,

Can someone advise me what to do. My mortgage company is sending me a letter before action to start off the repossession process for my house which i am in arrears for. Ive been honest with them and stated since Nov 11 i am £500 a month worse off and in July 12 i will be a further £150 a month worse off. The mortgage is in £1000 arrears and the unsecured part of the mortgage is in £4000 arrears. When i receive the letter knowing that i will also be filing for bankruptcy do i still pay the mortgage or as im already going to lose the house not pay for it as what i dont pay will be added to the debt.

Thanks

MLT

Gimpsdad

CCCS_PavanQuote:
Originally Posted by cambsno
Right, done the CCCS budget and it suggest IVA, before I set all this up I am in the process of getting a new bank account. My question is what do I do immediately about creditors?

- Ring them, say having difficulties and plan to do an IVA?
- Ring them and not mention the IVA and try to pay a token amount like £10 for this month?
- Not do anything but cancel DDs and by the time they write to me will have started IVA?
- Continue to pay, although this will simply be taken from overdraft and make that worse?

Hi cambsno and thanks for your post.

It’s best to offer token payments of whatever you can afford and make them aware that you’re seeking help from us. It might also be helpful to give them your client reference number.

I hope this helps.

Kind regards,
Pavan

I have to disagree here, on many points.

Assumedly, you have filled in the debt remedy online. Have you spoken to anyone? If not, then don't take a machines word for it that IVA is your best option. It might be, but until you have been advised as to the pros and cons of ALL debt solutions then you should tread carefully.

Any reputable IVA provider will tell you to seek 2 or 3 opinions before you make your next move, so I find it staggering that CCCS would tell you to inform creditors that you are seeking advice from them on the basis of advice from an online analyser, and why they would issue you with a client reference number when you have not complied with data protection by giving them written authority to act for you is even more mystifying. Does CCCS automatically assume that everyone that takes the analyser will sign up with them?

Finally, I don't personally disagree with the viewpoint that token payments are fair enough, but for true impartiality the CCCS rep on here should have advised you that it will absolutely no difference to the result of any creditors meeting (should IVA be right for you once discussed in person) whether you pay contractuals, pro rata payments, token payments or nothing at all.

Gimpsdad

Johnsmoney,

In BR the Official Receiver will make the decision as to whether you have to pay anything through an IPA or IPO. If you do, an IPA or IPO will last for 3 years. An IVA lasts for 5. Be aware, though, that the OR will be more generous when calculating your disposable income in certain areas of expenditure than an IVA would, but will not allow at all other areas that would be allowed (at least to a certain extent) under an IVA.

Gimpsdad

tangohotel.

Get a couple of estate agent valuations of what your property would be worth on a "forced sale" basis. That is a more realistic way of assessing what equity you actually have should the worst come to the worst. When you have that info, you may be able to get a better idea of what your options are.

shrewsyj

Hi there,

I recently completed an MA, for which I took out a career development loan of £7.5k. The monthly repayments, which I can barely make due to low income, are set at £156.39 for 5 years, meaning that not only am I struggling to pay month by month, but over this period I'm paying an extra £1,933.40 in interest.

I was thinking about a super balance transfer to a 0% credit card for 20 months which would buy me a bit of flexibility during the next few months, in which my income is set to fluctuate, pretty much unavoidably due to the nature of my work. It'll also hopefully reduce the overall interest payable, and as far as I can see, it's possible providing I pass the credit check. I hope I do, as the loan totals £7.5k and this seems a lot to ask for on a credit card. Do you think this is feasible?

My problem is also that I don't fully understand my loan account, and the bank are not great at explaining how it works - when I log in, there's a 'current account' (£2 in credit) and a 'career development loan' account (in which the loan amount is shown as overdrawn) both under the same account no and sort code - if I make a super balance transfer to this account, will it actually clear my loan debt?

I am also looking into a change of careers (or at least reverting to what I used to do) next year, and intend to move in with my parents for a while to save money, so I am taking other steps to solve these problems in the long run. But if I could take the pressure off the loan payments in the short term, it'd be a big help.

Very confused, and grateful for any help!

Thanks
Shrewsyj

Hazeybabes

Hi, I've had a debt problem for over 2years and been on a debt management plan but it's not working, I've looked at an iva but that won't work so I'm comfortable with a bankruptcy solution. However Im not sure what to do about my current accounts.
Since entering the dmp my partner added my name to his account so they are in joint names. There is no money in them, in fact at the end of each month we are in the overdraft. One my partners wages are paid into, the other my state benefits are paid into.
I have to list these in held accounts but we can't afford for these to be frozen and they are working acceptably and it's not like there is any money in them but I don't want these the be declared as creditors.
Should I get my name removed from these joint accounts, is that going to cause more problems?
I don't want to get my partner dragged into this any more than he is, and him be financally hit with my problems.