Struggling with debt? Ask a debt advisor a question

VonnieB

Hi there. I'm a 'newbie' so bare with me... I have an overdraft of £4800, yes £4800, with Halifax. I have other debts of about £12000, but this is less than half my salary so I'm not in debt crisis... yet! I have done the budget planner and money makeover tasks and I am able to cover and reduce all my debts at the moment, just about, but I am paying £90 in fees every month to Halifax and I really want to reduce this overdraft and the monthly fee. I can get an interest free overdraft of £2250 with Nationwide, but should I switch? Should I put the rest on a 0% interest credit card? Or will this just make it worse? What should I do?!

StepChange_James

fedupofhiding wrote: »

Hi
This is the first time I've ever sought help about my debts which have been hanging round my neck for more years than I care to remember...the only person I have ever told is my sister.

All my debts are unsecured & I no longer know exactly how much they are, just somewhere in the region of £40,000......more than a years salary & so I'm in debt crisis. I was in an abusive relationship & when I finally broke free, I spent & spent on credit cards & ended p using one card to pay the minimum payment on another, until I maxed out all of them. At the worst, I had ELEVEN credit cards...so totally stupid.

I have looked into getting an IVA, but I'm too embarrassed by the whole thing to talk to anyone! I'm on anti-depressants & can't face being in a relationship because I'd have to honestly tell someone how stupid I've been, & I couldn't stand the embarrassment...even writing this post is raising my heart rate & make me feel like crying!

Please point me in the right direction! I'm a single 50 yr old woman who wants to be debt free!

P

Hi P!

It sounds like you've made a huge step today by putting up this post. I think it takes an awful lot of courage to ask for help with debts, so I'm really impressed that you've managed to do this.

I speak to people in debt every day and one thing that I've learned is that debt can happen to nearly anyone, so it's nothing to feel ashamed about. The great thing is that you've taken the first step and are looking to do something about it.

There are two main ways to get advice from my charity, either over the phone or online. It sounds like speaking to someone at this stage is likely to be stressful, so I'd recommend using our online advice tool.

It's called Debt Remedy, here's the link: http://www.stepchange.org/msehelp. It will take you through our full debt advice process, including putting together a budget and looking at possible debt solutions. There's a phone line and online chat option if you need any help but otherwise you can get advice anonymously without needing to talk if you don't want to.

The advice booklet you receive at the end will go into detail about the potential options and whatever the solution, we'll be able to support you through it.

It takes about 20 minutes, is accessible 24 hours a day and you can save up and come back later part way through if you want.

I hope this helps, but please post up any other questions you might have.

All the best.

James

fedupofhiding

Hi James

Thank you for your reply. It is so good to know there's is something I can do online, as even just reading your post has brought me to tears!

I will definitely have a look at your online advice.

Thanks again

P

StepChange_James

VonnieB wrote: »

Hi there. I'm a 'newbie' so bare with me... I have an overdraft of £4800, yes £4800, with Halifax. I have other debts of about £12000, but this is less than half my salary so I'm not in debt crisis... yet! I have done the budget planner and money makeover tasks and I am able to cover and reduce all my debts at the moment, just about, but I am paying £90 in fees every month to Halifax and I really want to reduce this overdraft and the monthly fee. I can get an interest free overdraft of £2250 with Nationwide, but should I switch? Should I put the rest on a 0% interest credit card? Or will this just make it worse? What should I do?!

Hello,

It's a tough one to answer really. We speak to loads of people who try to juggle their debts onto cheaper deals but end up with even more debt, usually because it's the debt they pay off is available to run up again.

On the other hand, if you can reduced charges and interest then that's going to help you bring your balances down. If you do look at using a 0% credit card then weigh up your chances of clearing the debt while it's interest free (as it'll probably revert to quite a high rate at the end).

It's good that you've planned a budget, as this should tell you what you can afford to pay and help you to work out what's possible.

Generally speaking we advise people against consolidating debt as we talk to so many that have struggled with the fall out from it. If you know you can trust yourself to be really disciplined, work out all the possible costs and are confident your finances are stable then it could work out.

If the overdraft is the debt costing you the most then it might be worth paying the minimum payments on your other debts and focusing all your spare money onto getting rid of the overdraft. Then when it's paid off you'll have more money to focus on the next most expensive debt you have.

I'm sorry if I sound a bit non-committal but I'm always very wary of suggesting consolidating debts without knowing all the ins and outs of your situation.

I hope this has helped.

James

VonnieB

Hi James.

Thanks so much for your reply. To be honest, I don't trust myself to not build up the overdraft again and it would probably take longer than the 0% interest period to pay it all off. In fact, part of the other £12000 I owe is a consolidation loan including my previous overdraft! So you're right to be wary! I think I'm better off sticking to my budget and focussing on the bigger debts and paying them off as quickly as possible before tackling the overdraft.

Thanks for the reality check, much appreciated. I'll definitely be using this forum again in the future!

danboy88

Hi there,

I work for a building society, and I have most of my debt with the company I work for. Would entering into a DMP possibly endanger my employment?

I am also unsure about entering a DMP. I currently had large outstanding debts, and I just about meet the repayments, but the important thing is that I DO meet the repayments. I went through the questionnaire and it has suggested a DMP is a good idea because my outstanding debt is so high. If I am honest, I think I am just scared of entering a DMP. I have some questions about it before I decide:

1) I live with a flatmate and we both pay towards the council tax. In a DMP am I able to omit certain outstanding amounts such as the council tax? I wouldn't want him to be affected by my personal debt problem.

2) How does it work? Will I be allocated a budget of what is my "available to live on" amount. How is this calculated?

Thanks

Dan

failingfast

Hello

I posted this earlier on a different thread and received some sound advice. Just wondering if there's anything more I need to do as it's making me anxious!

3 months ago I wrote again to my creditors to advise a change of circumstances (unemployed) and make an offer of repayment of £1 pcm until my situation improved. Most responded within 2 weeks with 'OK that's fine for 6 months' but 4 of them failed to respond - no letters, emails or phone calls. I wrote to these 4 again 2 months ago to reiterate my offer and ask that they respond, again no response.

What should I do next? Do I assume they are no longer interested in the debt owed to them? I don't understand why they haven't responded to me!

mum2one

failingfast wrote: »

Hello

I posted this earlier on a different thread and received some sound advice. Just wondering if there's anything more I need to do as it's making me anxious!

3 months ago I wrote again to my creditors to advise a change of circumstances (unemployed) and make an offer of repayment of £1 pcm until my situation improved. Most responded within 2 weeks with 'OK that's fine for 6 months' but 4 of them failed to respond - no letters, emails or phone calls. I wrote to these 4 again 2 months ago to reiterate my offer and ask that they respond, again no response.

What should I do next? Do I assume they are no longer interested in the debt owed to them? I don't understand why they haven't responded to me!

It could be as simple as they have the 2 letters, know there not going to get any more money and have accepted that.

If it was me, I would send 1 more letter (with proof of posting, maybe recorded delievery- although if a PO box recorded delievery wont get signed for).
As long as you keep paying the £1 even if they don't acknowledge you, your have proof that you have paid, - there be interested in the debt, just at the mo if they wanted to react all they could do is huff and puff but they cant get money if you dont have it. xx

StepChange_James

danboy88 wrote: »

Hi there,

I work for a building society, and I have most of my debt with the company I work for. Would entering into a DMP possibly endanger my employment?

I am also unsure about entering a DMP. I currently had large outstanding debts, and I just about meet the repayments, but the important thing is that I DO meet the repayments. I went through the questionnaire and it has suggested a DMP is a good idea because my outstanding debt is so high. If I am honest, I think I am just scared of entering a DMP. I have some questions about it before I decide:

1) I live with a flatmate and we both pay towards the council tax. In a DMP am I able to omit certain outstanding amounts such as the council tax? I wouldn't want him to be affected by my personal debt problem.

2) How does it work? Will I be allocated a budget of what is my "available to live on" amount. How is this calculated?

Thanks

Dan

Hi Dan,

It's hard to say how a DMP would affect your employment. I've spoken to many people who work in financial services over the years and it tends to vary.

Usually there will be something written in your contract about personal financial conduct, or something that sounds similar. Often this is worded quite harshly but the reality can often be much more supportive.

It's generally best to talk in private with either a manager you can trust or someone in HR. Usually that conversation is easier if you've had advice already and have a potential solution ready.

It's better to talk to your employer first before going ahead with the DMP, so you know where you stand.

A DMP with StepChange Debt Charity will only cover your unsecured debts, which we call non-priorities. Household bills like council tax are priorities, so we'd recommend you pay those yourself in full.

It sounds like you've gone through our Debt Remedy tool, if you log back in you can see more about how a DMP works. Basically, everything covered on your income and expenditure budget sheet are things you use your money for, whatever is left from your income after that is paid to the DMP and is distributed between your non-priority debts.

So your available to live on amount is you income minus your DMP payment (which will be confirmed in your paperwork).

I hope this helps and good luck with everything.

James

StepChange_James

failingfast wrote: »

Hello

I posted this earlier on a different thread and received some sound advice. Just wondering if there's anything more I need to do as it's making me anxious!

3 months ago I wrote again to my creditors to advise a change of circumstances (unemployed) and make an offer of repayment of £1 pcm until my situation improved. Most responded within 2 weeks with 'OK that's fine for 6 months' but 4 of them failed to respond - no letters, emails or phone calls. I wrote to these 4 again 2 months ago to reiterate my offer and ask that they respond, again no response.

What should I do next? Do I assume they are no longer interested in the debt owed to them? I don't understand why they haven't responded to me!

Hello,

Thanks for posting. I think Mum2one's post above covers things really nicely. Sending the paperwork again via recorded delivery would give you peace of mind that they've definitely received your letters.

It's hard to say why they've not responded, but I'm quite confident that they haven't given up on this debt entirely. It could be that they're giving it a while and will pick things up later or you might have got missed off a spreadsheet somewhere and they've forgotten to send you letters.

Whatever the reason, it's best to keep on paying what you can afford (even if it's just a pound for now). Once you get to those other 6 month agreements running out I'd recommend doing an up to date budget and sending it to all of your debts, including the ones that aren't talking to you, and then everyone will know what the current situation is.

Kind regards

James