Struggling with debt? Ask a debt advisor a question

StepChange_James

Turmoil wrote: »

Hi All

Just after a little bit of advice. My house was repossessed 12 months ago and i am now in rented accommodation. The mortgage lenders have finally put the house on the market after 12 months and it looks like it may have neqative equity of £50-£60 000. When they have sold it what options do i have for repaying this. Bankruptcy? IVA? I have no other debts and would be able to pay back approx £200/month.

Thanks in advance

Hello,

Thanks for posting.

It's hard to say which option will be best for you without knowing more about your situation.

Once the property is sold and the mortgage company sort out the money then you should get confirmation of how much is left to pay. As the property will have been sold the remaining shortfall is an unsecured debt.

If the outstanding balance is around £50-£60k then it'll be a matter of working out if that's an amount you can realistically clear without any type of insolvency. For example, £200 a month to clear £50,000 would take nearly 21 years without any more interest
being added.

So if that's the situation bankruptcy or an IVA would be worth giving some thought to. It depends on your situation which is the most suitable but we can give you in depth advice when you know more about what the shortfall comes to.

If you wanted to run through a hypothetical situation you could put some numbers into our Debt Remedy tool, which can give you advice based on the information you put into it. Here's the link: http://www.stepchange.org/msehelp.

It can be quite frustrating having to wait to find out what's happening but I'd recommend hanging back from making any decisions until you know the property has been sold and you know what you've got to deal with.

I hope this helps and good luck with everything.

Kind regards

James

Marzydee

Hello All,
I desperately need some help/advice.
In 2001 I took out a £5k loan with Lloyd's TSB. I made the monthly repayment of £150 per month for approx 2 years. My debts by this point had got very out of hand and I went on a DMP with a well known company which I've been on ever since.
My issue with the loan in question is that I have called Lloyd's TSB today to enquire about the balance owning and was told prior to the debt being sold last August (to 1st Credit) it was still around £5,400! I am aware Lloyd's did not freeze the interest. I asked to be sent details of all the payments I had made prior to last Aug and was told they can only provide details of up to 3 years before the closure date. On asking how I would get the rest of the info requested the advisor basically was unable to give a conclusive answer.
Is there anything I can do to challenge Lloyd's regarding this?
On a separate note, having been on a DMP for 10 years I feel I have made little progress in clearing any of my debts and wonder whether there is anything I can do. I'm almost at the stage where I feel I would be better off just stopping payment altogether as over 10 years I believe I have paid off now at least the equivalent if not more than my original debts.
Sorry to go on and thanks in advance.

mum2one

Marzydee wrote: »

Hello All,
I desperately need some help/advice.
In 2001 I took out a £5k loan with Lloyd's TSB. I made the monthly repayment of £150 per month for approx 2 years. My debts by this point had got very out of hand and I went on a DMP with a well known company which I've been on ever since.
My issue with the loan in question is that I have called Lloyd's TSB today to enquire about the balance owning and was told prior to the debt being sold last August (to 1st Credit) it was still around £5,400! I am aware Lloyd's did not freeze the interest. I asked to be sent details of all the payments I had made prior to last Aug and was told they can only provide details of up to 3 years before the closure date. On asking how I would get the rest of the info requested the advisor basically was unable to give a conclusive answer.
Is there anything I can do to challenge Lloyd's regarding this?
On a separate note, having been on a DMP for 10 years I feel I have made little progress in clearing any of my debts and wonder whether there is anything I can do. I'm almost at the stage where I feel I would be better off just stopping payment altogether as over 10 years I believe I have paid off now at least the equivalent if not more than my original debts.
Sorry to go on and thanks in advance.

This DMP are you with a fee paying company, as if you are a % of your payments are for the agency, the debt with lloyds although you took out 5k, the interest on that for the 1st year you would be bearly chipping away at the debt but just covering your interest, then i'm guessing there would be letters, phonecalls to you which they could charge for.

Surely your getting at least a yearly review letter to see what your debts are at x

Marzydee

Although the DMP company I'm with (yes, fee paying) write each year advising a review is due I must confess I've not completed one for a very long time...head in the sand technique. Only now dawning on me how stupid I've been.
Your point about letters etc is what I wondered, contemplating writing to Lloyds to see whether I can reclaim anything back.

mum2one

Marzydee wrote: »

Although the DMP company I'm with (yes, fee paying) write each year advising a review is due I must confess I've not completed one for a very long time...head in the sand technique. Only now dawning on me how stupid I've been.
Your point about letters etc is what I wondered, contemplating writing to Lloyds to see whether I can reclaim anything back.

its worth looking at changing to stepchange if you can as every penny goes to your debts, - weve all done the head in the sand, sometimes still does, but ring them and get the figures, I'm guessing theres more than 1 debt. x

Former_StepChange_Rachel

Marzydee wrote: »

Hello All,
I desperately need some help/advice.
In 2001 I took out a £5k loan with Lloyd's TSB. I made the monthly repayment of £150 per month for approx 2 years. My debts by this point had got very out of hand and I went on a DMP with a well known company which I've been on ever since.
My issue with the loan in question is that I have called Lloyd's TSB today to enquire about the balance owning and was told prior to the debt being sold last August (to 1st Credit) it was still around £5,400! I am aware Lloyd's did not freeze the interest. I asked to be sent details of all the payments I had made prior to last Aug and was told they can only provide details of up to 3 years before the closure date. On asking how I would get the rest of the info requested the advisor basically was unable to give a conclusive answer.
Is there anything I can do to challenge Lloyd's regarding this?
On a separate note, having been on a DMP for 10 years I feel I have made little progress in clearing any of my debts and wonder whether there is anything I can do. I'm almost at the stage where I feel I would be better off just stopping payment altogether as over 10 years I believe I have paid off now at least the equivalent if not more than my original debts.
Sorry to go on and thanks in advance.

Hi there, thank you for posting.

You can make what's called a Subject Access Request (SAR) so that you can get that information from Lloyds that you're looking for. The SAR request can tell you about any information that's held about you, why it is held and who it's been disclosed to. please be aware you would have to pay a £10 processing fee to put the request through.

You can find more information on this on the ICO website: http://www.ico.org.uk/for_the_public/personal_information

To reiterate the advice given to you by mum2one, I think it would be a good idea to consider your option with us. We treat all of your creditors equally so they are more likely to freeze the interest on debts being managed via one of our DMPs (please note however that creditors cannot be forced to freeze interest on debts in a DMP)

Our Debt Remedy online advice tool can help you put together a budget and give you a debt solution in just 20 minutes. http://www.stepchange.org/msehelp

Hope this helps

Best regards

Rachel

louised78

Dear All

I wanted to reassure those that are just starting to tackle their debts that they are doing the right thing. My partner and I began our DMP with stepchange (formally CCCS) in 2009. This is the best thing I have ever done. We began with debts of nearly 40k and being charged approximately £500 pcm by both our bank accounts in overdraft charges. I completed the online form with stepchange being realistic about what is spent where rather trying to penny pinch on the budget and leaving ourselves short and now I have 3 creditors left 2 of which are due to be repaid in February. This will leave one creditor therefore we will be able to manage on our own once again learning the lessons from before not to over commit. The initial part is scary however the long term benefits are so worth it.:j:rotfl:

Jules1324

I have £42,000 worth of unsecured debt

£21,000 personal loan @ 9.9% APR
£6,900 credit card @ 18 - 26% APR
£6,100 credit card @ 26% APR
£4,500 credit card @ 0% ending Dec 14
£2,200 credit card @ 31%
£1,700 store card @ 23%
£447 store card @ 26%

I have never defaulted on the minimum repayments which now total @ £900 per month but am finding it increasingly difficult to manage

I have an income of £2,500 per month including benefits and am a single parent bringing up 2 teenage children.

I have a appt with a council money advisor this week who may likely refer me to the DAS service, is this the best way for me to go?

I want to minimise the impact on my credit rating if at all possible

Thanks

StepChange_James

louised78 wrote: »

Dear All

I wanted to reassure those that are just starting to tackle their debts that they are doing the right thing. My partner and I began our DMP with stepchange (formally CCCS) in 2009. This is the best thing I have ever done. We began with debts of nearly 40k and being charged approximately £500 pcm by both our bank accounts in overdraft charges. I completed the online form with stepchange being realistic about what is spent where rather trying to penny pinch on the budget and leaving ourselves short and now I have 3 creditors left 2 of which are due to be repaid in February. This will leave one creditor therefore we will be able to manage on our own once again learning the lessons from before not to over commit. The initial part is scary however the long term benefits are so worth it.:j:rotfl:

Hi Louise,

Thanks so much for taking the time to post this lovely message. You've done some great work to get where you are now and I'm sure those last three debts will be gone in no time.:T:T:T

I'm sure your story will be really help spur people on that are still struggling with their debts.:j

All the best.

James

StepChange_James

Jules1324 wrote: »

I have £42,000 worth of unsecured debt

£21,000 personal loan @ 9.9% APR
£6,900 credit card @ 18 - 26% APR
£6,100 credit card @ 26% APR
£4,500 credit card @ 0% ending Dec 14
£2,200 credit card @ 31%
£1,700 store card @ 23%
£447 store card @ 26%

I have never defaulted on the minimum repayments which now total @ £900 per month but am finding it increasingly difficult to manage

I have an income of £2,500 per month including benefits and am a single parent bringing up 2 teenage children.

I have a appt with a council money advisor this week who may likely refer me to the DAS service, is this the best way for me to go?

I want to minimise the impact on my credit rating if at all possible

Thanks

Hello,

I'd expect that the first job the money advisor will do with you is to help you plan out an income and expenditure budget that covers all the costs you're likely to need to cover for you and your kids.

Once they've done that you should have a good idea of what's left for debts. If it's £900 or more then it's probably possible for you to carry on making the full payments on these debts. Trying to overpay will help you clear them quicker but at least maintaining the payments will preserve your credit rating compared to making lower payments.

If your income and expenditure budget shows that you've got less than £900 spare after living costs then it's likely you'll be better off looking at a debt solution that will make these debts more manageable.

All of these solutions will make your credit rating suffer, some more than others but any scheme or strategy that involves paying less than the full payment is going to give your credit rating a knock.

The Debt Arrangement Scheme (DAS) is something that can work out well if it's right for your circumstances. Your money advisor should be able to talk you through the pros and cons when you speak to them.

If after speaking to them you'd like a second opinion then I'd recommend using our online Debt Remedy advice tool - http://www.stepchange.org/msehelp. It will guide you through our debt advice process and will recommend the best option - including DAS if that's the right thing for you.

Kind regards

James