Is there a way of having a debt reduced?

[Deleted User]

Hello I am new posting on here so I hope you can bear with me if I am in the wrong place.

In the last 12 months I have managed to clear three out of four debts, but I am wondering if anything can be done about the final one. It is a student overdraft of just under £1000 which was originally with HSBC but was moved to their debt collectors. I have been paying £5 a fortnight for the last 18 months but it it is going to take me around seven years to get rid of it like this.I am on carers allowance and receive £55 a week so there is no way of increasing payments by much more. I finally feel like I'm making progress by getting rid of the other debts, but this looming over my head and was wondering if there was a better way

I have googled this but IVAs and things come up which is no good. I was wondering if anyone on here could give me some guidance as I am keen to finally become debt free

fatbelly

Hi xstacey

So this is your only debt now? And interest/charges are frozen?

I wonder if the key here is getting your income up. Income Support is £71 per week and there would be a carers premium.

Have you tried the benefits checker at turn2us

http://www.turn2us.entitledto.co.uk/entitlementcalculator.aspx

[Deleted User]

Thank you for replying, I get an income support topup but it is only £12 a fortnight and £6 of that is automatically taken for a budgeting loan I had when I first moved into my flat. I dont know anything about premiums though? But as far as Im aware all of my benefits are correct and up to date as I have only been claiming carers for a few months and it was all looked into when they set it up for me
Aside from the budgeting loan which I dont really worry about as the money is automatically deducted this is my only debt, and I am not paying any interest on it.

mildredalien

If you are unable to increase your income at the moment, it might be that you have to just settle in and accept that you will be paying this for a while! When you have a limited amount of money to play with, it's probably more important to manage your general finances and make sure you don't get into more debt.

If you could obtain a lump sum, you might be able to write to HSBC and offer a settlement lower than the balance to clear it, however it would likely have to be a good chunk. You could plough any extra money into a savings account and when you have built up a bit, try this.

You could also head over to the 'up your income' board, they might have some creative ideas to help!

Toomuchdebt

Could you not pay what you were paying on the other debts in order to pay it off a bit quicker?

fatbelly

Carers allowance is £58.45 per week. Income support is £71.00. Carers premium is £32.60

Your Income Support should be £71.00 + 32.60 - 58.45 - 6.00 (if that's your SF loan payment)

This assumes you're aged 25. The £71 is £56.25 before that (don't ask me why)

(if I'm wrong on this I apologise. I'm not at work where I have a calculator for this sort of thing. Turn2us should hopefully confirm this)

Your benefits

If you receive certain other benefits including the State Pension which are paid at a rate that is the same or more than Carer's Allowance, you may not receive payment of Carer's Allowance but may have what is called an 'underlying entitlement'.

Payment of Carer's Allowance is taken into account in full in the calculation of income-related benefits and Pension Credit.

If you receive Carer's Allowance or have underlying entitlement to it, you will qualify for the carer premium in Income Support and income-based Jobseeker's Allowance, worth up to £32.60 per week.

If you get Housing Benefit or Council Tax Benefit, the local council will include an amount for the carer premium when they work out how much Housing Benefit or Council Tax Benefit you can get.

I suggest you continue to pay £5 per week to HSBC and, if you can increase your income, save this in a separate pot in order to offer them a lump sum in full & final settlement (as Mildred said) at some point. You're going to need £300 to make a realistic offer and there's no guarantee they'll accept. But that's the only way you're going to 'reduce the debt' unless you can show they've added unreasonable/unfair charges