Debt Free Advise - Please!!!

Helpmeclearmydebt

Hi,

I’m wondering if anyone can help me with some good advice about my debts. My situation is maybe a bit unusual. 10 years ago I was diagnosed with an illness that I never really came to terms with. Consequently I have over the last 10 years ran up a lot of debt and most recently I have developed a gambling problem. I am in approx. £22k worth of debt.

I am now in a place where I am finally coming to terms with my condition and I am receiving counselling for my addiction. A lot of my creditors I have avoided so I am not in contact with them all but regularly receive letters from debt recovery agencies. I have a lot of pay day loans outstanding also.

This month I am clearing the arrears on my rent and also keeping up with the maintenance of my car i.e. my car insurance had not been paid and I do not have a up to date MOT certificate. I felt like these were things that I needed to deal with immediately but this has left me with no more monies to pay my creditors. I have contacted the ones I am in touch with to let them know because I really do want to deal with this and not run away like I normally do.

I have been in contact with an agency who specialise in DMP and IVA’s and they have advised me that a IVA would be my best option at this time. I am reluctant to get into this because it is a 5 year plan and I have also been in a DMP before which caused me a lot of distress because the creditors continued to harass me at work and continued to add on interest. I ended up leaving my job and running away from all the debts – I do not want to do this again.

I am not wondering whether I should contact all my creditors and debt collection agencies myself and try to come up with a plan, ideally they would freeze the interest and I could really work at clearing my debt. My problem is that for the first couple of months the payments may not be as high as I could manage in other months because I am catching up with myself. I want to clear this in under 5 years and think I will be able to if the creditors freeze the interest and are happy for me to maybe start off slowly but work up to higher payments. I also have loans where family members are guarantors and Im hoping they will also accept a plan rather than contact my guarantors for payment.

Has anyone been in a similar situation? Does anyone have any advice for me?

Really appreciate your help – thank you!!

camuk81

Ok can I ask which agency have you spoken to? Is it one of the free one's?

Helpmeclearmydebt

Hi thanks for getting back to me. I spoke to ‘debt support trust’ which is a charity and they put me in touch with a company call Varden Nuttall. That is another thing that makes me want to do it myself because they take a fee…

925pws

Helpmeclearmydebt wrote: »

Hi thanks for getting back to me. I spoke to ‘debt support trust’ which is a charity and they put me in touch with a company call Varden Nuttall. That is another thing that makes me want to do it myself because they take a fee…

No don't go with these fee paying companies. Can I suggest you go with either Payplan or CCCS, just google them and you'll find their telephone numbers. They offer a FREE service and 100% of your payments go to repay your debts.

I find it unbelievable that a 'charity' put you in contact with a fee paying debt service :mad:

JustinCredibleGillespie

925pws wrote: »

No don't go with these fee paying companies. Can I suggest you go with either Payplan or CCCS, just google them and you'll find their telephone numbers. They offer a FREE service and 100% of your payments go to repay your debts.

I find it unbelievable that a 'charity' put you in contact with a fee paying debt service :mad:

I'll second that! Never EVER should a 'charity' do that! As 925pws stated, go with CCCS or Payplan. And make your visits to this board part of your daily routine to keep you motivated.

JCG

xx

camuk81

Ok few bits.

Have you read the guide to IVA

http://images2.moneysavingexpert.com/attachment/ivaGuide.pdf

Just a quick read on their T&C means you will have to pay the upfront fee and also a supervisor fee.

http://www.vardennuttall.co.uk/docs/Ts&Cs%20-%20Fees%20and%20Refunds.pdf

Those "fee's" would be better going on your debt

Gimpsdad

It isn't all that unusual for a charity to refer IVA work out. CCCS refer self employed IVA work to Grant Thornton. Don't forget that there are no free providers of IVA's, even CCCS and Payplan charge fees. If you have been in a DMP before and it didn't work for you you need to ask if you can handle it again. At least the IVA route guarantees by law that no further interest can be added and creditors must cease all collection and further activity in pursuit of the outstanding debt. If you have a limited amount to put in, then it will be far quicker than a DMP as well.

Have you ever considered going bankrupt? It would all be over quicker and would be a fresh start. It isn't for everyone, but worth considering.

Gimpsdad

Surely it is better to pay a fee for an IVA, whoever you choose, than to run a DMP where the OP has admitted that creditors refused to freeze interest, thereby effectively rendering it useless?

Let's say that the OP can afford £150 per month. The cost of DMP is £22k minimum and will take 12.2 years at that rate. IVA cost is £9,000, and that includes the fees, and will be over in 5 years. BR costs £700 (usually) and the OP would be subject to an IPO of £150 over 3 years.

By far the cheapest option, and I know that there may be reasons why the OP might not want to do it, or even can't do it, would be BR. The £150 is an example, but put virtually any figure in there that you like and the equation works the same.

Whatever he or she does, there is little that he or she can do to stop creditors contacting guarantors if they choose to do so.

Helpmeclearmydebt

Ok brilliant - I will contact pay plan. I have heard of companies that dont charge a fee but when I was refered to them I assumed they all must. I really want to get a grip of the situation so thanks for all the advise!!

freshstart11

Best thing I would recommend is to sit down with all outstanding amounts/apr etc and speak to CCCS & Payplan - i know CCCS do online chat/help if you do not want to talk it out over phone.

Which ever method is best for you - I wish you all the luck on the world x x

Helpmeclearmydebt

Gimpsdad wrote: »

Surely it is better to pay a fee for an IVA, whoever you choose, than to run a DMP where the OP has admitted that creditors refused to freeze interest, thereby effectively rendering it useless?

Let's say that the OP can afford £150 per month. The cost of DMP is £22k minimum and will take 12.2 years at that rate. IVA cost is £9,000, and that includes the fees, and will be over in 5 years. BR costs £700 (usually) and the OP would be subject to an IPO of £150 over 3 years.

By far the cheapest option, and I know that there may be reasons why the OP might not want to do it, or even can't do it, would be BR. The £150 is an example, but put virtually any figure in there that you like and the equation works the same.

Whatever he or she does, there is little that he or she can do to stop creditors contacting guarantors if they choose to do so.

Do you know where I would stand in the future if I decided to get a mortgage and i had been BR in the past. I know Im far away from a mortgage now but I really do want to recover from this asap and start to lead a normal life...thanks for your help!