Struggling with debt? Ask a debt advisor a question

StepChange_James

babyfever wrote: »

hi, new here. Have never admitted my debt problems to anyone at all so im just going to get it all out!!

So i owe about £6000 in total. I know for a fact more than half of that is interest as i have ignored it for so long. (years) ive moved alot, so its always taken time for companies to find me. I owe on a loan, a debt with e-on, n power, bt, talk talk, o2 and rent arrears (not from the property im in now). Im ready to put a stop to it all now, i admit ive just ignored it but i do want to sort it now. My husband shares 1 or 2 of these debts. He works, self employed and i stay at home with our kids who are 3 and 2months. He really doesnt bring home much money, so we get tax credits, and a bit of housing benefit, we have been really struggling to make ends meet, and thats without paying off any debts so i dont even know where to start with paying them. I did attempt to speak to some of the debt collectors but they all wanted £30+ a week and would not accept any less and we just cant do that.

any advice would be great, we have no savings and we rent our home, we dont have a car as cant affored one, and im not really sure where we can cut our spending.. Feeling miserable and i just want better for my kids.

Hello,

Thanks very much for sharing details of your situation on here. It can be very stressful to face a debt problem, so you should feel proud of yourself for taking action.

I would recommend giving out online advice tool, Debt Remedy a go - http://www.stepchange.org/msehelp. It will guide you through creating a household budgets (and suggest the expenses that are easy to forget) then you'll get a personal action plan that talks you through your options.

It's hard to give advice on a forum without your full information but if you go through our advice tool it will tell you the best way to deal with these debts. It might be that reducing the payment is your best bet or there could be other options.

I wouldn't worry too much about what your creditors say they want, it's more important to work out what you can afford. They can't have what you haven't got to give them.

I hope this helps, but feel free to reply with any questions you might have. I'd also recommend this forum as a great place for support when you're finding things difficult.

Kind regards

James

skintteach

Hey,

first post so a little unsure... I was wondering if there is a template letter in order to have CFO lending freeze interest and accept a payment plan?

I don't have any original documentation as everything was done online and by phone - i am really struggling to keep up!

Thanks!

StepChange_James

skintteach wrote: »

Hey,

first post so a little unsure... I was wondering if there is a template letter in order to have CFO lending freeze interest and accept a payment plan?

I don't have any original documentation as everything was done online and by phone - i am really struggling to keep up!

Thanks!

Hello,

There isn't a letter that will make a company freeze the interest and charges on a debt, but many will consider freezing if you can show them that you can't afford the full payment but are willing to offer as much as you can afford.

To do this it's usually best to send a letter with an income and expenditure budget attached. That way you can show them exactly why you need to reduce payments.

Our advice tool, Debt Remedy, will take you through putting together one of these budgets that you can print out and it'll also provide you with template letters if that's your best option. It takes about 20 minutes and is completely anonymous. Here's the link: http://www.stepchange.org/msehelp.

Hope this helps.

James

meandmydebts

Please don’t judge me.
I am around 50K in debt on Credit Cards, which I have never missed a payment on. But recently I lost my job and within the next two months I will not be able to afford the minimum repayments. I have take steps now and put our house on the market, and subject to a sale, a large amount of the debt can be cleared. Currently I am JSA’s but hope to be back in employment soon.
My partner still works and from her income the mortgage, council tax, etc can still be made.
My questions are:
1.Do I just do the debt remedy just based on myself, as the credit card debts are just in my name?
2.If the answer to question 1 is YES, then do I half the mortgage, council tax, etc monthly payment amounts on the debt remedy plan?
Please advise so I can make the first steps.
Thank you
PS - I partner is fully aware of my situation.

Norris118

Hi

Newbie here.

Offer the last few years we've been subsidising our lifestyle with CC's and living outside of our means. Part of the reason being we moved into a new house with a mortgage and had a child.

We've come to the point now of not getting enough income to see us through the month and recently spoke to an advisor of the national debt helpline.

Very helpful and recommended a few options, one being a debt managment plan with a available income of about £100 to creditors ( now paying £255)

I'm considering all options at the moment and was wanting to ask the following question..

I'm due to remortgage in about 11 months from a fixed rate. I'm aware that my credit score will be effected so will I be paying higher intresr rates in the medium/long term just to pay less to my creditors in the short term.


My fixed rate is due to go down to the homeowner varsble rare (5.79% to 3.99% but with that comes the uncertainty of intrest rates etc so would prefere a long term fixed rate again.

Any help would be greatly received.

I have debts of £17k

daveyesta

im stuck in a situation where I have 5 credit cards, a bank loan and i use up to 3 payday lenders (monthly)!!!!

I am not in any 'trouble' with any of them, but I have to use the payday lenders and do alot of overtime just to pay the debts and am therefore unablle to pay anymore to the creditors than the minimum.

I desperately need a consolidation loan, but am currently stuck in a rut where i cant get credit (because of the amount of creditors), and i DID miss two payments of my bank 7 year bank loan 2 years ago, (but the account is now back on track), therefore my bank wont help.

Everyday Loans seem to be the closest to any help i am able to get but am weary of their reputation and APR, but it would be good to just have ONE creditor.

I dont want to go down the road of a DMP, but maybe that is the best option.

Are there ANY other options you can suggest....

just for info, my total debt is £14,000 and im currently paying around £1000 pe r month, but i want to be paying more like £600.

PS I am not a homeowner.

StepChange_James

meandmydebts wrote: »

Please don’t judge me.
I am around 50K in debt on Credit Cards, which I have never missed a payment on. But recently I lost my job and within the next two months I will not be able to afford the minimum repayments. I have take steps now and put our house on the market, and subject to a sale, a large amount of the debt can be cleared. Currently I am JSA’s but hope to be back in employment soon.
My partner still works and from her income the mortgage, council tax, etc can still be made.
My questions are:
1.Do I just do the debt remedy just based on myself, as the credit card debts are just in my name?
2.If the answer to question 1 is YES, then do I half the mortgage, council tax, etc monthly payment amounts on the debt remedy plan?
Please advise so I can make the first steps.
Thank you
PS - I partner is fully aware of my situation.

Hello,

Thanks for posting. In my time working as a debt advisor I've spoken to people from just about every possible walk of life and it seems that debt problems can happen to nearly anybody. So I'd never judge anyone for getting into debt.

You can complete Debt Remedy based on your individual finances or jointly with your partner. It's often easier to work out a joint budget if you pool your money together.

If everything is kept separate then you can just put your income and the expenses you pay for down. It's most important that the figures you put in reflect reality, so you don't have to split the bills 50/50 (I'm guessing your JSA wouldn't be enough to cover that). You can put the costs you pay for in the expenses and "Partner pays this bill" in the comments section of the costs she pays.

While you can never be sure, I'd expect that either way of working out the budget is likely to show a similar overall picture: you can just about cover living costs but there isn't much, if anything, to offer towards credit debts.

If that's the case then Debt Remedy put together an action plan to get things sorted out.

Regards

James

StepChange_James

Norris118 wrote: »

Hi

Newbie here.

Offer the last few years we've been subsidising our lifestyle with CC's and living outside of our means. Part of the reason being we moved into a new house with a mortgage and had a child.

We've come to the point now of not getting enough income to see us through the month and recently spoke to an advisor of the national debt helpline.

Very helpful and recommended a few options, one being a debt managment plan with a available income of about £100 to creditors ( now paying £255)

I'm considering all options at the moment and was wanting to ask the following question..

I'm due to remortgage in about 11 months from a fixed rate. I'm aware that my credit score will be effected so will I be paying higher intresr rates in the medium/long term just to pay less to my creditors in the short term.


My fixed rate is due to go down to the homeowner varsble rare (5.79% to 3.99% but with that comes the uncertainty of intrest rates etc so would prefere a long term fixed rate again.

Any help would be greatly received.

I have debts of £17k

Hi Norris,

I'm guessing your question is "Will a DMP affect my ability to get a mortgage?" which is a tricky one to answer.

Your situation is similar to a lot of people coming off fixed rates, where they actually save money going to the variable rate. Like you say, this adds an element of uncertainty with the potential for interest rates to go up in the future.

Whether you'll be able to get a new deal on better terms is impossible to know until that time comes around. The mortgage market changes over time. Your credit rating is likely to take a reasonable knock if you're on a DMP and that would be taken into account when you apply for mortgages.

There are lots of other factors that go into the decision on a mortgage though. A big one being your loan to value ratio (basically, how much equity you have in the property). Income and employment history are also taken into account.

If you're making the decision between a DMP and struggling on with payments then it's really important to have a well planned budget in place. If the budget shows you can manage your full payments then that's the best bet. On the other hand, if your income isn't enough to cover living costs and debt payments then a DMP might be a better option.

If you are looking at doing a DMP I'd recommend making sure it's a free one. There's a list here of the places that can do them (including us at StepChange) http://www.moneysavingexpert.com/loans/debt-help-plan#help.

I hope this helps.

James

StepChange_James

daveyesta wrote: »

im stuck in a situation where I have 5 credit cards, a bank loan and i use up to 3 payday lenders (monthly)!!!!

I am not in any 'trouble' with any of them, but I have to use the payday lenders and do alot of overtime just to pay the debts and am therefore unablle to pay anymore to the creditors than the minimum.

I desperately need a consolidation loan, but am currently stuck in a rut where i cant get credit (because of the amount of creditors), and i DID miss two payments of my bank 7 year bank loan 2 years ago, (but the account is now back on track), therefore my bank wont help.

Everyday Loans seem to be the closest to any help i am able to get but am weary of their reputation and APR, but it would be good to just have ONE creditor.

I dont want to go down the road of a DMP, but maybe that is the best option.

Are there ANY other options you can suggest....

just for info, my total debt is £14,000 and im currently paying around £1000 pe r month, but i want to be paying more like £600.

PS I am not a homeowner.

Hello,

Consolidation loans are tempting in these sorts of situations but very often they can make things worse. I've spoken to loads of people who've taken them out and then found themselves running up their cards again because the new loan payments aren't manageable.

Also the interest on consolidation loans often ends up meaning you pay back a lot more than you originally borrow. Even though the annual interest rate is often lower than the debts it repays, the timescales involved can mean you pay back more because it's stretched out over a longer time.

If you're reliant on payday loans then I'd recommend taking steps to break the cycle of taking out new ones every month. Here's an article on our blog with details on how to sort them out (including a link to a template letter to cancel the payment):
http://moneyaware.co.uk/2013/01/payday-loan-debt-help-what-to-do-if-you-cant-afford-the-payment/.

It's hard to say for sure, but I'd have thought that £600 a month might be enough to cover the payments for all these debts if you're able to get the payday loan debts under control and onto monthly installments.

I'd recommend going through our online advice tool, Debt Remedy http://www.stepchange.org/msehelp which will take about 20 minutes and put together a personal action plan based on your circumstances. If a DMP is the best route then it will recommend one, if not it will advise on the alternatives.

Kind regards

James

Debtfree_angel

I have been told that StepChange do not have a good track record in getting pay day loan lenders to agree to DMPs or to freeze interest. In general is this true - I know every lender and every case is different but in general is StepChange able to have pay day lenders freeze interest etc?

I don't want to get to the point of putting a DMP in place and then be told that no one is freezing the interest.