Struggling with debt? Ask a debt advisor a question

mum2one

benekli wrote: »

Hello forum, I am asking for some help and advice regarding my debt problem.The long and the short is that I owe 7,000.00 on a loan ( 22 months left to go) and a grand total of 27,000.00 on credit cards.For the last two years I have managed to keep up my repayments however I am now struggling ( every month is more difficult than the last )


Thank you for any help with this matter

CCCS are back 2mor, but in the mean time - the first step would be to go to their website, and do a budget planner, where you work out all your outgoinngs.

Get yourself a list of all your outgoings and your creditors with the amont owed, then the debt remedy will give you a suggestion as to your best option, x

System

Kipper84 wrote: »

Hi,

I have been in a DMP for the past 2 months, and so far it seems to be going well. Of my 3 creditors, the 2 where I have the largest amount of debt have got sent me letters to say they have accepted the repayment terms. I have had one which is still sending me letters though and has now sent the amount to collectors, my most recent letter was a demand to pay the full £1,141. I have contacted the DMP company I am with and they have said that I will continue receiving letters until an arrangement has been made, but in the meantime to just forward them on when I get them.

I'm concerned that this creditor hasn't accept the terms of the arrangement, and if this is the case, should I be calling them up to agree a repayment plan or do I leave this to the DMP company?

This is causing me a lot of stress and anxiety as I'm really worried about what might happen next. Could someone please advise what the best course of action for me to take is as I really don't know what to do about it.

Hi Kipper,

I think mum2one has summed it up really well. Your creditors do not have to accept the payment offered through a DMP. It is not unusual for a debt to be passed to debt collectors if payment offers are declined. This is nothing to worry too much about, it is just important to let your DMP company know that the debt has changed hands, so they can offer the same payment to the debt collector. We often find that debt collectors are more willing to accept payment offers on a DMP.

When a creditor doesn’t agree to a payment it is best to stick to that payment anyway. If you have planned out a budget and worked out exactly what you can afford to offer your debts then it would unbalance your finances to pay more to debts.

Mum2one raises a good point about fees for DMPs. If you are paying for your current plan I would recommend you contact us to see if we could provide a free DMP. You could use our online debt advice service called Debt Remedy, here is the link: 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 Helpline on 0800 138 1111 (free including from mobiles). 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.

System

sam959 wrote: »

CCCS are great i used to work with them closely when i worked for the bank. I would recommended them or payplan who deal with people with over £8,000 in debt and more than 3 creditors!

Thanks Sam, you are going to make us blush!

I would only add that we give advice to people with any amount of debt or number of creditors.

System

benekli wrote: »

Hello forum, I am asking for some help and advice regarding my debt problem.The long and the short is that I owe 7,000.00 on a loan ( 22 months left to go) and a grand total of 27,000.00 on credit cards.For the last two years I have managed to keep up my repayments however I am now struggling ( every month is more difficult than the last )


Thank you for any help with this matter

Hi Benekli,

Thanks for posting, and welcome to the forum. Without more details about your situation it is hard to say what would be best for you. mum2one is right when she says you would benefit from planning a monthly budget.

By working out what money you have coming in every month and how much you need of it to live off, it is then possible to see how best you could deal with your debts. With this information we can then give you free and impartial advice about how best to sort things out.

The first thing to do is 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 Helpline on 0800 138 1111 (free including from mobiles). 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.

System

Mrs_G wrote: »

Me and My new husband have been together for over 10years. 7 years ago, we had our daughter - we were 17 and 18.

Ever since, we have both worked - full time, paying for our daughter to go into a creche (with our own money) not claiming any benefits from the government, paying all our taxes and finally renting a house privately of which we pay all the rent ourselves. (My mum was kind and let us live with her for the first few years)

However, over the years this has caused us to get into debt, needing a new car so my partner could get to work - then it breaking down so needing another new car (both bought on finance) Loans for Christmas's and expenses etc. Everything just went wrong for us, we could only get 2nd hand cars and our first car was written off by a deer which we'd saved for. The next car our cambelt went!!! The cost to fix was more than we paid for the car!!!

Now, we are paying a total of £810.00 a month in Loans and credit cards, and we're already up to £2,000.00 into our overdraft. So much for trying to do everything independantly.

So anyway, it's now got to the point where we can't afford to pay all of the above and live. I'm not saying I don't want to pay anything, but when we've finally been able to pay our debts off we want to buy a house etc.

What is a Debt Management Plan? Is this an option for us, where we can pay less monthly but still clear our debts in full and for it not to affect our credit rating in the long run? The bank wont change our loan as we're maxed for credit as we don't have any assets. We can't take out better rate credit cards, as we've been declined - again as we've maxed out our credit.

I just need to know what I can do to ensure my creditors get paid, but that we are still able to live aswell - not have to try and spend £25 a week on food shopping etc when we work all hours under the sun

Has anyone go any advice for us please, who was in the same situation and could help us get out of this hole?

Hi Mrs_G

Thank you for posting and welcome to the MoneySavingExpert forum.

After reading about the difficult things you’ve had to deal with, it’s not hard to see why you’ve began to struggle. We very rarely recover from an unexpected cost such as replacing a car as quickly as we’d want to. I liken overdrafts to being in a ‘money ditch’ of sorts. All it takes is a few unexpected outgoings such as replacing a cambelt or having a car written off to find yourself plunging into it. The further you fall, the harder it can be to climb out.

From everything you’ve said, it’s clear that you want to take control of your finances. You need to find a balance between making fair payments to your creditors whilst still maintaining a quality of life for yourself and your family.

A Debt Management Plan is where you make a single payment once a month to your creditors

( http://www.cccs.co.uk/InfoCentre/EnglandandWales/Debtsolutions/Debtmanagementplan.aspx). This payment is based on what you can realistically afford after you’ve looked at all the living costs for yourself and your family – this is everything from rent and council tax to your weekly food shop and petrol for the car.

You make this payment via a third party (such as us) who distributes this to all your creditors on your behalf.

I highly recommend you seek a DMP with no charges or admin fees, such as the one we offer. There are a lot of companies out there who will charge you a fee for doing something our charity has done for free for almost 20 years.

If you would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). 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 debt advisor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

There’s also Debt Remedy, our online debt advice service ( http://www.cccs.co.uk/debtremedy?WT_mc_id=900001) to help you find a solution to your debt problem quickly.

I hope this helps and wish you the best of luck towards clearing your debts.

Best regards

Mat

System

melakabarbie wrote: »

I have had a student bank account with Halifax with a £2750 interest free overdraft for years now. they recently wrote to me saying that as i am no longer a student now they are changing my account to a normal one and will charge me daily for my overdraft. Is it worth getting a loan to cover the amount and paying that back monthly?? I am up to my limit and therefore these charges would no doubt take me over the limit every month.

Hi Melakabarbie,

Thank you for posting.

I really would not recommend taking out a loan to clear your overdraft. If you’re already struggling to stay above your limit, having a loan payment as a further outgoing to factor in each month won’t help. You also need to be aware of the right of offset the banks have. This means that not only does your bank have the right to remove or reduce your overdraft facility, they can also prioritise the overdraft and loan payments over any other outgoings you have on your account. You can read more about why we wouldn’t recommend debt consolidation on our blog: ( http://moneyaware.co.uk/2011/04/to-debt-consolidate-or-not-to-debt-consolidate/)

You may want to consider giving yourself a fresh start by opening up a basic bank account with a bank you have no debts with. Once you’ve stopped banking with the bank you’re currently with, you’re in a much better position to offer more manageable payments.

The first thing to do is visit our online debt advice service Debt Remedy ( http://www.cccs.co.uk/ref/drcu) which will help you find a solution to your debt problem quickly.

If you would prefer to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

You’ve taken the first step to sorting out your money worries – that’s always the hardest. Get in touch and we’ll provide all the support you need.

Regards,

Mat

KnowYourEnemy

I'm in need of advise regarding my attempts to repair my credit rating.
The history is quite elongated so as not to bore you, I'll try to cover my issues with bullet points.

• Had an existing loan through LTSB, repaying £380 a month
• Overtime at work stopped, creating money problems
• Late with 2/3 payments
• Contacted LTSB to let them know of my situation and they agreed to let me reduce payments, even suggesting lower payments than I proposed.
• Periodic contact with LTSB to up the amount I was paying, again, their suggestion
• After nearly 2 years of this they offered to refinance the outstanding balance in order to make it a formal arrangement, which I agreed to at £199 a month
• Roll on 18 months and I decided to check my credit rating. It was awful. Truly awful

Turned out LTSB had processed nearly 30 missed payments!! 30? I could accept 2/3. Needless to say I was disappointed. I felt mislead. Ironic, but still!

Fast forward another 18 months and I know have just £3000 left of the original £9000 refinanced loan. I also have around £1700 on 2 credit cards (Over £4000 still available) of which I like to pay off at least £450 a month: An amount I'm very comfortable with. My credit score is 900+ via Experian and Call Credit.

I have recently looked into borrowing £6000 over 5 years at around £140 a month, yet no-one will touch me with a bargepole. After discussions with credit reference agencies it has been confirmed that the LTSB issue is the only thing holding me back and also that it will stay on my file for either another 3 years or whenever they decide to withdraw it.

I have contacted them but unfortunately told to put request in writing. Despite this - nothing, as I'm just a faceless account number.

I thank you if you're still with me, so the question is 'How on earth can I move forward with this?' It's extremely frustrating paying out £600 when I could reduce that to £140 ish?

Any advice appreciaited

mum2one

KnowYourEnemy wrote: »

I'm in need of advise regarding my attempts to repair my credit rating.

The history is quite elongated so as not to bore you, I'll try to cover my issues with bullet points.

• Had an existing loan through LTSB, repaying £380 a month
• Overtime at work stopped, creating money problems
• Late with 2/3 payments
• Contacted LTSB to let them know of my situation and they agreed to let me reduce payments, even suggesting lower payments than I proposed.
• Periodic contact with LTSB to up the amount I was paying, again, their suggestion
• After nearly 2 years of this they offered to refinance the outstanding balance in order to make it a formal arrangement, which I agreed to at £199 a month
• Roll on 18 months and I decided to check my credit rating. It was awful. Truly awful

Turned out LTSB had processed nearly 30 missed payments!! 30? I could accept 2/3. Needless to say I was disappointed. I felt mislead. Ironic, but still!

Fast forward another 18 months and I know have just £3000 left of the original £9000 refinanced loan. I also have around £1700 on 2 credit cards (Over £4000 still available) of which I like to pay off at least £450 a month: An amount I'm very comfortable with. My credit score is 900+ via Experian and Call Credit.

I have recently looked into borrowing £6000 over 5 years at around £140 a month, yet no-one will touch me with a bargepole. After discussions with credit reference agencies it has been confirmed that the LTSB issue is the only thing holding me back and also that it will stay on my file for either another 3 years or whenever they decide to withdraw it.

I have contacted them but unfortunately told to put request in writing. Despite this - nothing, as I'm just a faceless account number.

I thank you if you're still with me, so the question is 'How on earth can I move forward with this?' It's extremely frustrating paying out £600 when I could reduce that to £140 ish?

With the bank even though you have been making payments,
Any advice appreciaited

Hi
From experience I would say please look at other options, i took out a consolidation loan and it seemed to be the answer to all my problems when in fact it was another millstone around my neck.


The bank would process the payments as missed, as even though you made payments with you not making the original payment, it shows as missed payments, but there should be a part payment recorded. So unfortunatly there is nothing that really can be done.

Credit score - Not all companies use credit scoring as a main criteria, they look at income/outgoings and would also see missed payments, so I would dount that you would get a descent loan, and the ones you would be offered would be from not so nice interest rates.

So you 3k still left on loan and have credit cards of £1700, can you afford all the outgoings.

Have you looked at a debt remedy plan, - if you do the budget planner on CCCS - it goes through everything you pay out and what you have left, use this as a port of call.

Also consider the debt free board with a statement of affairs (be a sticky on top), again its an income and outcome, and there may be ways to see if you can cut back.

System

KnowYourEnemy wrote: »

I'm in need of advise regarding my attempts to repair my credit rating.
The history is quite elongated so as not to bore you, I'll try to cover my issues with bullet points.

• Had an existing loan through LTSB, repaying £380 a month
• Overtime at work stopped, creating money problems
• Late with 2/3 payments
• Contacted LTSB to let them know of my situation and they agreed to let me reduce payments, even suggesting lower payments than I proposed.
• Periodic contact with LTSB to up the amount I was paying, again, their suggestion
• After nearly 2 years of this they offered to refinance the outstanding balance in order to make it a formal arrangement, which I agreed to at £199 a month
• Roll on 18 months and I decided to check my credit rating. It was awful. Truly awful

Turned out LTSB had processed nearly 30 missed payments!! 30? I could accept 2/3. Needless to say I was disappointed. I felt mislead. Ironic, but still!

Fast forward another 18 months and I know have just £3000 left of the original £9000 refinanced loan. I also have around £1700 on 2 credit cards (Over £4000 still available) of which I like to pay off at least £450 a month: An amount I'm very comfortable with. My credit score is 900+ via Experian and Call Credit.

I have recently looked into borrowing £6000 over 5 years at around £140 a month, yet no-one will touch me with a bargepole. After discussions with credit reference agencies it has been confirmed that the LTSB issue is the only thing holding me back and also that it will stay on my file for either another 3 years or whenever they decide to withdraw it.

I have contacted them but unfortunately told to put request in writing. Despite this - nothing, as I'm just a faceless account number.

I thank you if you're still with me, so the question is 'How on earth can I move forward with this?' It's extremely frustrating paying out £600 when I could reduce that to £140 ish?

Any advice appreciaited

Hi Knowyourenemy

Mum2one has summed it up nicely. Credit scoring is done differently by every financial instution, so the ratings via Experian and Call Credit will give you an idea but can never say whether you will qualify for credit or not. The loan might be the issue but there could many other things that they have taken into account when making a decision.

Your credit history is a series of facts about how you have managed your accounts, if you have made lower payments to a debt then this should be recorded as a partial payment on your file. If there are any mistakes on your file you could ask for them to be corrected but otherwise these will stay on your file

We rarely recommend consolidation loans as the overall costs often work out longer and we speak to lots of people who take out these kind of loans and end up in a worse situation. Sometimes it can be better in the long run to pay more to debts if it will mean they can be cleared in a shorter timescale. Here is a link to an interesting blogpost about debt consolidation: http://moneyaware.co.uk/2011/04/to-debt-consolidate-or-not-to-debt-consolidate/


It is hard to give detailed advice without more information about your situation. You can access Debt Remedy, our online debt advice tool by clicking here: http://www.cccs.co.uk/ref/drcu. This will help you plan a budget and provide a customised report telling you what options are available.

Hope this helps.

Mat

edward1m

Hi, I'm thinking of contacting a debt solution company to sort out my wife and myself growing, uncontrollable debt. Its stressing us both out and affecting not just our private life and kids but our work life as well. We don't know what else to do, we have reduced the amount of spending on grocery shopping and other costs that we can reduce but it isn't enough, we have creche payments to make, loans, numerous credit and store cards, rent, just to name a few. On top of that we've just had a letter from two of our credit card companies saying they're going to increase the interest rate and another from the child tax credit saying that they are reducing our payment by £400. We have recently moved house to be closer to our work place and save on fuel costs but now we're having to move house again to somewhere where the rent is cheaper. Stressed isn't the word.
Is a debt solution company a good way to go and if so what is the best one to go with?

Thanks