Struggling with debt? Ask a debt advisor a question

Indiglo

Could anyone PLEASE help me. I have a credit card debt of £12000 and at the moment only pay minimum payment £250 per month. I am on a mission to reduce this payment total. Can anyone recommend my best option? Consolidation loan to clear this and have smaller repayments and NEVER use a card again.Thanks

Rosepetal1701

Indiglo wrote: »

Could anyone PLEASE help me. I have a credit card debt of £12000 and at the moment only pay minimum payment £250 per month. I am on a mission to reduce this payment total. Can anyone recommend my best option? Consolidation loan to clear this and have smaller repayments and NEVER use a card again.Thanks

I've been there - got a loan, paid the CC, used the CC to the limit, got a 2nd loan etc (see my signature) I can't post a link to the website but I would suggest you have a look at "snowballing" on the What's the Cost website. I have found the advice really useful

Former_StepChange_Rachel

Indiglo wrote: »

Could anyone PLEASE help me. I have a credit card debt of £12000 and at the moment only pay minimum payment £250 per month. I am on a mission to reduce this payment total. Can anyone recommend my best option? Consolidation loan to clear this and have smaller repayments and NEVER use a card again.Thanks

Hi there, thanks for posting.

We wouldn't usually recommend taking out a consolidation loan to clear your debts. It's very rarely the best solution to a debt problem because lenders often offer a consolidation loan on the proviso that it is secured against a property. Once this happens, you would have to treat that loan as a priority right next to mortgage, council tax and utilities. While the debt is unsecured, you have more flexibility in negotiating more realistic payments.

Furthermore, although the monthly repayments can be easier to manage, you would actually be repaying more over time through interest payments.

We go into further detail on consolidation loans on this blogpost if you would like to take a look: http://moneyaware.co.uk/2013/01/to-debt-consolidate-or-not-to-debt-consolidate/

It certainly wounds like you would benefit from some free and impartial debt advice. We as a debt advice charity can have a look at your situation and advise you on the best solution for any debts you're dealing with.

There's two ways to do this:

Our anonymous online advice tool Debt Remedy can help you put together a personal action plan as well as provide a debt solution in just 20 minutes: http://www.stepchange.org/msehelp

You can also speak to one of our friendly advisors and put together a budget over the phone: http://www.stepchange.org/Contactus.aspx

Hope this helps

Best regards

Rachel

sile001

StepChange_James wrote: »

Hello,

I'd echo what Mum2one said earlier, taking out a mortgage on your property to pay off unsecured debts is a big risk. If ever you struggled with the mortgage then your property would potentially be at risk.

I'm pleased that you've already been in touch with us. If you go through our advice process you'll get a detailed income and expenditure budget. We'll also cover potential options to get the debts under control.

Regardless of the route you go down, it's a good idea to be setting up a bank account with a bank you've got no debts with. This will mean you'll have more control of your income.

Please post up any questions you have and we'll do our best to answers them.

All the best.

James

Hi James

I've been to CAB today. We did discuss the DMP route vs consolidation and they more or less echoed Stepchange advice. I'm also awaiting a confirmatory email re opening a Co-op bank account.

However, I do have another option, that of equity release. I could potentially release enough to pay off my debts without the need for consolidation. Also, there would still be a considerable amount of equity left in the property for eventualities. I have an appointment with an independent advisor next week.

As I see it, I wouldn't endanger myself vis a vis my home if I do this. What do others think?

markymark355

right i have done a budget on mse,not good.
i am all ways trying to cut back,and untill about 18months a i was free of all debts,(just mortgage)

i now have a loan which is about 2,200,not that long to go,untill its payed off,
but earler this year i moved bank accounts, and now i have a 2,700 overdrawn.as will.(old bank)new bank account is all way overdrawn,but gets pay of in full,each month, when i get payed.


i did write to the bank and ask they would stop the interest, they said no, as i have not made many payments.
i am single,so any money that i spend is on me, ok
i drawn , £250 each month,which i use for all that i need,so its just bills that leave my acount.


i think wot started this, is hoildays which i do each year,but not this year,

hoping that anyone can help.

thanks, mark

sile001

I've also received all confirmation/paperwork/bank card for new Co-op account

1RandomMind

Hi - would appreciate some advice on my options with my £14,400 debt with a building society.

This debt is approx. 6 years old and I have had contact with the company only once - 2 years ago where their offer was to unreasonable for my current circumstances. During all this time no money has been repaid.

I had a letter from them about 6 months ago (from 1st Credit ) offering for my to pay just 10% of what is owed to 'clear' the debt - however is this too good to be true ? At the time I did not have access to that money, however now a friend has offered to help me out with this if it is really that simple.

I have also looked into a DRO - I think I qualify as I have done the calculations and have less then £50 a month after bills. However I quite often work more then my contracted hours, this is not ever guaranteed - does this count ? My other concern with my salary is that I do get a bonus every 12 months - however I use this to pay for my car MOT / Insurance etc.

My personal circumstances is that I live with my girlfriend - and my bills are the rent I pay her towards bills etc (she owned the house before we met)

Basically the questions that I have are -

1. Is the 'pay 10% deal' really what they claim ?
2. Do you think they would offer this again if I contacted them ?
3. Is a DRO for me, with the fact I earn extra money thru overtime and my bonus ?
4. What is my financial outcome of the above scenarios ?(eg I would like to get my 'rating' sorted and be free of the mistakes I have made in the past and get a mortgage at some point)

Many thanks for your advice

milliepooch

Hi
I have unfortunately had my home repossessed and have a debt of just over £20,000 remaining after they sold the house and paid off the mortgage. I have no issues that i owe this money, however, the mortgage was in both mine and my partners name we have since split up and they are holding me liable for the full amount because they can't find him.. indeed when i contacted them about this they told me that the reason is because i am the first to ring them so the debt is mine!! surely this is not correct i am willing to pay half but i refuse to pay all of it just because they can't be bothered to find him.

the mortgage was joint and he was the higher wage earner!

Can anyone help with any advice on how to proceed?

Thank you

StepChange_James

sile001 wrote: »

Hi James

I've been to CAB today. We did discuss the DMP route vs consolidation and they more or less echoed Stepchange advice. I'm also awaiting a confirmatory email re opening a Co-op bank account.

However, I do have another option, that of equity release. I could potentially release enough to pay off my debts without the need for consolidation. Also, there would still be a considerable amount of equity left in the property for eventualities. I have an appointment with an independent advisor next week.

As I see it, I wouldn't endanger myself vis a vis my home if I do this. What do others think?

Hi there,

Good news about your bank account.

Equity release can sometimes be an option to deal with debt but it's something to approach cautiously and make sure you're getting good quality advice. We've a team of equity release specialists that can talk you through the ins and outs.

As you're already a client of ours they'll already be able to access your details and tell if if it's something we'd recommend. You can get more information and contact details here: http://www.stepchange.org/Howwecanhelpyou/Equityrelease.aspx.

I'd recommend that you speak to one of our advisors as well as the one you've got your appointment with, so you've got a second opinion and can compare the options.

Kind regards

James

StepChange_James

markymark355 wrote: »

right i have done a budget on mse,not good.
i am all ways trying to cut back,and untill about 18months a i was free of all debts,(just mortgage)

i now have a loan which is about 2,200,not that long to go,untill its payed off,
but earler this year i moved bank accounts, and now i have a 2,700 overdrawn.as will.(old bank)new bank account is all way overdrawn,but gets pay of in full,each month, when i get payed.


i did write to the bank and ask they would stop the interest, they said no, as i have not made many payments.
i am single,so any money that i spend is on me, ok
i drawn , £250 each month,which i use for all that i need,so its just bills that leave my acount.


i think wot started this, is hoildays which i do each year,but not this year,

hoping that anyone can help.

thanks, mark

Hi there Mark,

It sounds like you're already doing a lot of the right things: planning a budget, cutting costs, talking to your creditors. So that's great news but if that's not feeling like it's enough to get on top of things it could be that you need more in depth debt advice.

We can help you there. I'd recommend that you try our online advice tool, Debt Remedy. It takes about 20 minutes and will provide you with a tailored personal action plan which will run through the debt solutions that suit your circumstances.

Here's the link: http://www.stepchange.org/msehelp.

Kind regards

James