Struggling with debt? Ask a debt advisor a question

nobodystwistingyourarm

Hi,

About to apply for a DMP with CCCS, just have a quick question.

I am a full-time employee, but also do a little bit of freelance work.

The freelance work is NOT guaranteed and could end anytime (for example, I got nothing this month).

It's never huge amounts - some months nothing, some months £50-60, up to about £150 maximum.

How do I state this in my SOA? As it's so variable and not guaranteed (and could stop completely any time) I'm scared of committing to pay an amount I can't afford.

System

cool4door64 wrote: »

I have been recently thinking about doing and IVA as between me and my partner we have about £22,000 worth of debt, we have a mortgage on our house and 3 kids. My mrs only works part time and is looking for a better job so her income isnt great. I have been struggling to pay off the debts since I can remember, and up till moving into our new house had most of them being paid off at the bare minimum which as you know means you end up going no where with it.

debt is made up of the following

loan £6900
credit card 1 £1200
credit card 2 £2000
credit card 3 £3900
overdraft 1 £3500
overdraft 2 £3500
catalogue £600

I tried to get help from my bank 2 years ago and despite being a loyal customer for over 10 years they simply didnt want to know. I have a fairly good credit rating and have never missed a mortgage payment. Now we struggled for ages to get a new mortgage for our new property even with a fairly good credit rating.

We are now struggling to make ends meet money comes in and goes out I have work since I could and I consider myself very lucky to have everything I have today as I come from a background where children brought themselves up and have had no financial help whatsoever all my life, everything I own, (which isnt much bar the house), I have worked my butt off for. The credit cards and overdrafts became a buffer for when all bills were paid and nothing was left but they have spiralled out of control.

I have spoke with a government recommended IVA company and expressed my concerns about being a home owner and it affecting my property as its the only thing I have of value I can leave my kids when I go, (which I hope is a good while off yet).

NHs employees get fees wavered by the way with this company via nhs discounts. Anyway they said that nearing the end of the IVA they would ask for my property to be revalued and if they thought there was equity of 85% they would ask me to remortgage to pay off the remainder of the debt. Now this is where I go blonde, (sorry blondies).

the house purchase was £125,000 of which £13,000 was deposit, this was from the equity in my first house so the mortgage is £112,000 or so from july this year. payments per month are 637 over 31 years i think.

Can anyone help me with these sums, the IVA advisor said that most people are finding they reach this point and due to being on an IVa they cannot get a remortgage, (like I said it was extremely difficult to get one for our new property even with 10%) but who knows in 5/6 years time. She said if it didnt qualify for this the 5 year IVA becomes a 6 year.

She also said another option is a route which goes over 8 years this doesnt include any property re-evaluation but is obviously longer.

Can anyone advise with this or explain it so I get it? I think worrying about the payments is sending me loopy.

I have also applied for money back from charges and stuff expaling my financial circumstances will see what happens and post here when I do.

Thanks for the help
P

Hi P,

The advice you have received about IVAs is right, if you own a property then you would usually have to agree that you will try and remortgage in the fourth year of the IVA. It isn’t possible to know whether you will have to do this because house values, your mortgage balance and the availability of secured loans are all going to be different in four years from now.

An IVA is a big commitment and it is best to get impartial advice before making a decision. As we are a charity we can look at all your options and help you find a solution.

As mum2one mentions, Deb Management Plans can sometimes work out as good options to deal with debts. I suspect this might be the other option you mentioned that would take about eight years. Without more information it is hard to say what would be the best way to deal with your debts.

I would recommend that you use our online debt advice service Debt Remedy (http://www.cccs.co.uk/ref/drcu) to get a second opinion on your debt problem.

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.

Regards

Mat

System

z_340 wrote: »

Work in a secure environment and am subject to security / crb checks etc. Debt is frowned upon as they look on it as it being a risk that you may have a reason to comit fraud!

Have just filled in all the CCCS questions and was recommended a DMP. Am waiting for them to ring me on Momday.

Cheers.

Good news! Please come back and post if you have any questions following you phone call from us.

System

carlylcox wrote: »

Hello,

I recently moved to Australia (may 2012) and left just over elevn thousand pounds on credit cards in the uk.

I am still paying them off, however I am struggling to commit to the 280+ pounds i need to send home every month to cover my minimum payments. Also, becuase I am only able to pay the minimum amount, some of my debts are going up not down.

I am wanting to know my options from abroad. I have heard stories about credit cards stopping all the interest on your debt and alloowing you to pay back what u can afford each month. is this something that I can do? If so, how would I go about it?

Also, would I be able to go bankrupt or is my debt too small?

Thanks
Carly

Hi Carly,

We give advice to people who are abroad and have debts that they took out in the UK. The way we give advice remains the same, we help you plan out a realistic monthly budget (accounting for the cost of living in Australia) and talk you through your options.

Your debts are not too small to go bankrupt and it is possible to go bankrupt when you live abroad (though it is a little bit more complicated). However, this is something we would usually only recommend if it was unlikely you were going to be able repay the debts in a realistic timescale.

It is possible to reduce payments to debts and ask them to stop interest in charges. We provide payment plans called Debt Management Plans where we do this for our clients. It is not always the best option though, so the first step is to speak to us so we can give you advice about how to proceed.


If you live outside of the UK, and are contacting us regarding UK debts you can contact us on +44 113 297 0126 to book an appointment with a counsellor. Lines are open Monday to Friday 08:00-20:00. It would be helpful that when you call you have details ready regarding your income, expenditure and creditors, as this can help speed up the referral process. If you have this information ready it may be possible to refer you directly to a counsellor if one is available, otherwise we will arrange a time that is convenient for you to be called back for an appointment.

Hope this helps

Mat

System

nobodystwistingyourarm wrote: »

Hi,

About to apply for a DMP with CCCS, just have a quick question.

I am a full-time employee, but also do a little bit of freelance work.

The freelance work is NOT guaranteed and could end anytime (for example, I got nothing this month).

It's never huge amounts - some months nothing, some months £50-60, up to about £150 maximum.

How do I state this in my SOA? As it's so variable and not guaranteed (and could stop completely any time) I'm scared of committing to pay an amount I can't afford.

Hello,

It can be hard to know how best to account for income like this in a budget. You are right to be cautious of estimating this income on the high side and over stretching your finances.

Every situation is different, so I can only answer in general terms here. If the income is regular enough to be able to work out an average then that can be put into the budget. Then in months where your income is higher than average you can set the extra to one side to give you a cushion for months where you earn a bit less.

Obviously this might not work in every situation so it is usually best to talk to someone here and we can work out how best to treat this extra money. A DMP is flexible, so if your freelance work stopped you would just need to inform us and we would then adjust your budget to account for it.

If you have not got in touch with us yet I would suggest trying our online advice tool, Debt Remedy (http://www.cccs.co.uk/ref/drcu) which will can tell you if a DMP if a good option for you.

Regards

Mat

Brian123

Trying to take the first steps to sort out what appears to be borderline debt crisis.
Managing to make minimum payments but only just. The problem is mostly credit cards, although we do have a loan running which is about half complete.
I've tried to get a new card to shift the debt but been refused and although accepted for a loan the interest quoted is, as near as makes no odds, the same as the credit cards.
Do you actually have to start defaulting on payments to get the card companies to offer any kind of arrangement?

I did speak to a CCCs advisor on the phone but when trying to use the website to enter what state we're in because I'm self employed (private hire driver) all the questions relate to someone running a company so seem completely irrelevant to me.

rufuschucklebutty

i have been trying to pay off a 1000 pound overdraft on my bank account for a year now, today i just went back to 1000 OD again !

iv'e heard that i can put it on a 0 % credit card to give me a chance to pay it off, is this a good idea ?

System

Brian123 wrote: »

Trying to take the first steps to sort out what appears to be borderline debt crisis.
Managing to make minimum payments but only just. The problem is mostly credit cards, although we do have a loan running which is about half complete.
I've tried to get a new card to shift the debt but been refused and although accepted for a loan the interest quoted is, as near as makes no odds, the same as the credit cards.
Do you actually have to start defaulting on payments to get the card companies to offer any kind of arrangement?

I did speak to a CCCs advisor on the phone but when trying to use the website to enter what state we're in because I'm self employed (private hire driver) all the questions relate to someone running a company so seem completely irrelevant to me.

Hello,

You do not have to have defaulted on a debt before getting advice, in fact it is usually better to look at your options before falling behind on payments.

The self employed part of our Debt Remedy tool is designed so all self employed people can use it, so some questions won’t apply for your situation, but you can just leave these blank. If you are finding it tricky to get through you could call our helpline and receive the same level of advice over the phone. We have advisors who specialise in giving advice to self employed people, so they are skilled at putting together income and expenditure budgets that match your situation.

Our number is 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.

Hope this helps.

Mat

System

rufuschucklebutty wrote: »

i have been trying to pay off a 1000 pound overdraft on my bank account for a year now, today i just went back to 1000 OD again !

iv'e heard that i can put it on a 0 % credit card to give me a chance to pay it off, is this a good idea ?

Hello,

Without knowing more about your situation it is hard to say if moving your overdraft to a 0% credit card would be a good idea. Our experience is that it generally isn’t, as we speak to many people who have tried this and ended up with more debt overall. If you do transfer the balance it is really important to remove the overdraft facility from your account, so there is no temptation to get deeper into debt.

If you would like to read more about it there is a useful guide to this kind of transaction on the main MSE site: http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs.

Regards

Mat

7171blondie

hi

im struggling with debt that i cannot pay... ive been in touch regarding a dmp, i can start straight away...
i was wondering about my credit, i have always had good credit, how will a dmp affect my credit & how long would it be on my credit file ?
just worried incase me & hubby split up & i need to rent a house for myself & my two children in the future
thanks