Struggling with debt? Ask a debt advisor a question

levens

Hello, I am not sure if I should use step change at the moment, as I am up to my limit of my overdraft of 2000, am working part time (not through choice) and after bills I have 80 pounds or less left to last me four weeks so am back up to the 2000 overdraft by the last week, so have no savings and am back at square one..so the question is would going into step change be a good idea and mean that my bank could no longer charge me for my overdraft?

magiclemur

Hi - wondering if anyone can advise? My m-i-l is on a private pension of around 12k a year and (with the 'help' of another relative who is long term unemployed and lives with her) has run up horrific debts of around 45k on credit cards. I believe half is hers and half belongs to the relative, but she seems to have taken responsibility for both :mad:.

She has now entered into some sort of consolidation plan (yes, I know, I know...) with a bunch called Capital Financial Management of the w. midlands whom she found on the radio (argh) but now she really seems to be struggling to make ends meet.

She owns her own home outright, though it is in a right state - I have no idea where this money went and she won't say.

I suppose my questions are this - can you get out of a consolidation agreement, or renegotiate, if it is getting too much for you to repay?

Secondly - if we were back at the beginning, what should she have done? My guess is for the relative to have gone bankrupt (they have no assets) and for her to have done - what? It wouldn't matter about her credit rating as fortunately we are okay-off and could help her out with future loans etc, though we're not Peter Jones so can't afford to pay off the debt... We're trying to get her out of this hole as best we can - she hid it all from us until the plan was in place...Thanks.

Coinmachine

I am considering a DMP with Step Change but am concerned re a few points and would like advice if possible.

All of the credit card debts are in my name but I also have a 1500 overdraft with one lender which is in a joint account. One of my credit cards is with the same lender as well.

I do not want my partners credit record tainted. Is it possible to switch the account from joint to single or would the bank be suspicious and not allow that on account of my credit rating?

The other option is not to start the dmp until I have sorted this overdraft. I think I could do this within 3 months if I reduce payment on the other credit cards but is it wise to do this before the DMP? I have not missed a single payment to date on my cards but I definately cannot manage the minumum payments next month as I am at tipping point. If I do this should I ring the lenders beforehand or just make a token payment and see what happens? Do I mention I am considering a DMP?

Really grateful for some advice here

lilmissthrifty

Hi all,

I really want to make a dent in our debt for 2014 and wondered if anyone has any advice for ensuring we stay on track?

We've got almost 20k debt and if we're really good we can afford to pay 800 quid off per month.

However, I am always over optimistic at the start of the month and pay lots of debt off our credit cards only to run out before the end of the month - during which we pile money back onto our credit cards.

We got married in July so paying off debt this year has been challenging - however, I'm determined to pay off at least 10k next year.

Do people find that working in cash for all non-bill / DD spending is the way to go? If we draw out say 400 quid each for all food / petrol/ disposable income etc for the month on payday is that the way to go?

Then once it's gone, it's gone.

My partner is also less strict with spending than I am which can also be infuriating at times!

Many thanks for any advice.

System

julie777 wrote: »

Please help.
Written on behalf of a friend.
I am 25 and have suffered mental health issues for 10 years.
I found i just could not cope with jumping through all the hoops required to keep getting jsa.
For some time i have felt i could not cope with another job anyway.
Having had no income since may i owe my parents a lot of housekeeping as i live with them.
I am not eligible for hb so is there any help i can get?
They have managed to keep me okay but i would love now to pay them back.
I am trying to apply for esa again but doubt they will backdate it and i know how hard it is to get the benefit anyway. Also it will no doubt be several weeks before any decision is made.
Although my parents are not asking me for the money, to me it is a debt and i wonder if there is any advice you can give me please?

Hi there,

In regards to what benefits you may be able to claim you can use our confidential tool to do an online benefits check. If think you'd need help your friend could help you with putting in the information.

The checker can tell you if you are claiming everything you’re entitled to and how to go about claiming it.

From experience we know that being in debt can have a negative effect on mental health. You're definitely not alone in feeling pressured by it. For tips, advice and articles on dealing with debt and reducing the effect on your mental health please visit our Debt in Mind page.

I hope this helps.

Thanks,
Jess

System

mrsworrypants wrote: »

Hi, I'm not sure if I should reply to this or start a new thread to ask my question, sorry, I'm new to this!
I have some credit card debts that I'm struggling with, I've gotten behind with payments and I'm ashamed to say I havent been dealing with anything but have decided to try and sort it all out!
I am a homeowner but I have tenants in my property instead of living there myself. When I started struggling with the mortgage I moved out and put tenants in that cover the mortgage. I stay with family.
I have 2 credit card debts, 1 barclaycard = 2000pounds (money which I had used to cover a few mortgage payments) and capitalone = 500pounds. I had previously had discussions with barclaycard when I fell behind but the interest alone was making it difficult to keep up payments. Both accounts have now been passed to bailiffs.
I have been unemployed quite a while and have never claimed any benefits. I have also been unwell and have been diagnosed with rheumatoid arthritis and at only 29 that knocked me for 6 and I didnt want to deal with all of this but I'm trying now to fix it.
I could borrow some money from a relative to offer settlement but I wouldnt be able to offer full amount. Also I presume my house is in danger of being repossessed? I really regret not contacting the companies before debt collection got involved. I did make a claim for unfair bank charges a while back with halifax (about 1500) that was refused but I hear some people can still get their money back stating financial hardship, do you think that counts as my situation right now? Any help would be much appreciated from anyone.

Hi there,

Welcome to the forum.

The most important out-going you have is your mortgage. It is vital that payments to the mortgage are kept up to date. This is the case despite the credit card companies placing pressure on you to increase your payments to them. But you need to make contact with your credit cards and start offering what you can manage.

As you have had no contact with your creditors the first thing to do is to see at what stage the debts are at. The credit card debts could only be passed to bailiffs if you have been issued with a county court judgment (CCJ) that you did not respond to. Sometimes debt collection agencies (who take over a debt from the original creditor) threaten to send bailiffs but they do not have the power to do that – only a county court can.

To check at what stage your debts are at and if you have any CCJ’s you can check your credit file for free at Noddle

When you have updated credit balances use our confidential online debt advice tool, Debt Remedy. It will give you a tailored budget and clear advice on how to deal with your situation. You can then offer payments based on what you can afford and prove your situation to your creditors.

If you were to make another clam for O/D charges it would help to have an updated budget to prove your situation.

With the home being re-possessed for credit card debts, it is unlikely. A creditor can ask a county court to place a charge on your home to reclaim the debt if/when you sell and they can go for forced sale of your home. But these force of sale orders are rarely issued. It’s more likely your creditors are making threats because they’ve not had contact with you.

Do Debt Remedy or call 0800 138 1111 if you’d prefer to speak to an advisor.

I hope this helps.

Thanks,
Jess

System

levens wrote: »

Hello, I am not sure if I should use step change at the moment, as I am up to my limit of my overdraft of 2000, am working part time (not through choice) and after bills I have 80 pounds or less left to last me four weeks so am back up to the 2000 overdraft by the last week, so have no savings and am back at square one..so the question is would going into step change be a good idea and mean that my bank could no longer charge me for my overdraft?

Hi there,

It’s good that you’re thinking of looking at your options now rather than waiting. You would definitely benefit from getting some help from us. We’re happy to offer advice to help you better your situation.

£80 pounds is not a lot to live on for 4 weeks. We could look at your budget, make suggestions for lowering outgoings, look at any unsecured debt payments you’re making and give clear advice on dealing with your situation. You can get this advice anytime online using our confidential Debt Remedy tool. Or call 0800 138 1111 to speak to an advisor.

As you’re at the limit of your £2000 overdraft I would advise you to set up a basic bank account at a bank you have no debt with. Use this new account as your main account. Any bank can reduce or withdraw an overdraft without giving warning. If you have no overdraft on your account your income is safe then you can set up a standing order to cover the monthly interest on your overdraft account.

Try Debt Remedy or give us a call. you’re into an overdraft and are at the limit of your budget – you would benefit from some help.

Thanks,
Jess

System

lilmissthrifty wrote: »

Hi all,

I really want to make a dent in our debt for 2014 and wondered if anyone has any advice for ensuring we stay on track?

We've got almost 20k debt and if we're really good we can afford to pay 800 quid off per month.

However, I am always over optimistic at the start of the month and pay lots of debt off our credit cards only to run out before the end of the month - during which we pile money back onto our credit cards.

We got married in July so paying off debt this year has been challenging - however, I'm determined to pay off at least 10k next year.

Do people find that working in cash for all non-bill / DD spending is the way to go? If we draw out say 400 quid each for all food / petrol/ disposable income etc for the month on payday is that the way to go?

Then once it's gone, it's gone.

My partner is also less strict with spending than I am which can also be infuriating at times!

Many thanks for any advice.

Hi there,

It’s a great target to set yourself to prioritise clearing your debts. The very best advice we can give is to create a budget and stick to it. You can list all your priority outgoings (mortgage, household bills, food etc) to ensure they are covered in full. Then you can see how much you have left over to pay extra on credit payments. That way you wouldn't pay more off credit than you can afford at the beginning of the month and have to rely on credit to get through.

Making a budget can be tricky, there are slightly more irregular payments to consider as well as monthly bills. We've written an article on building a budget and sticking to it that you may find useful.

I would recommend that you clear the most expensive debt (highest interest) first then the next (ensuring minimum payments are made on all).

Our MoneyAware blog has helpful articles on budgeting and managing money. You can sign up to the free monthly newsletter to get regular advice on getting debt free as quick as possible.

There are advantages to paying on card than cash but whatever way you decide, drawing up a budgeting and sticking to it is the very best way to approach paying off debt.

Good luck with it!

Thanks,
Jess

System

magiclemur wrote: »

Hi - wondering if anyone can advise? My m-i-l is on a private pension of around 12k a year and (with the 'help' of another relative who is long term unemployed and lives with her) has run up horrific debts of around 45k on credit cards. I believe half is hers and half belongs to the relative, but she seems to have taken responsibility for both :mad:.

She has now entered into some sort of consolidation plan (yes, I know, I know...) with a bunch called Capital Financial Management of the w. midlands whom she found on the radio (argh) but now she really seems to be struggling to make ends meet.

She owns her own home outright, though it is in a right state - I have no idea where this money went and she won't say.

I suppose my questions are this - can you get out of a consolidation agreement, or renegotiate, if it is getting too much for you to repay?

Secondly - if we were back at the beginning, what should she have done? My guess is for the relative to have gone bankrupt (they have no assets) and for her to have done - what? It wouldn't matter about her credit rating as fortunately we are okay-off and could help her out with future loans etc, though we're not Peter Jones so can't afford to pay off the debt... We're trying to get her out of this hole as best we can - she hid it all from us until the plan was in place...Thanks.

Hi,

Welcome to the forum.

Consolidation tends to be a large loan used to pay off smaller debts then the loan is paid back in ‘manageable’ installments. Your Mother-in-Law could also be on a debt management plan paying a monthly payment that the company distributes on.

Whichever option it is she has signed up for; if she is struggling it is unsuitable. She needs some impartial advice see what the best way forward is. A consolidation loan payment is probably an unsecured loan and she can only be made to repay it in installments she can manage. A debt management plan is not legally and she can leave at any time.

It’s not too late for her to have a workable debt solution. We can look at her situation now and recommend the best way forward. Our debt advice is completely free and impartial.

You could help her to use our online budget tool, Debt Remedy. It would give clear advice and recommendations. Or we run a free Helpline on 0800 138 1111, she’s welcome to call in and speak to a debt advisor.

Get in touch and we can go from there.

Thanks,
Jess

System

Coinmachine wrote: »

I am considering a DMP with Step Change but am concerned re a few points and would like advice if possible.

All of the credit card debts are in my name but I also have a 1500 overdraft with one lender which is in a joint account. One of my credit cards is with the same lender as well.

I do not want my partners credit record tainted. Is it possible to switch the account from joint to single or would the bank be suspicious and not allow that on account of my credit rating?

The other option is not to start the dmp until I have sorted this overdraft. I think I could do this within 3 months if I reduce payment on the other credit cards but is it wise to do this before the DMP? I have not missed a single payment to date on my cards but I definately cannot manage the minumum payments next month as I am at tipping point. If I do this should I ring the lenders beforehand or just make a token payment and see what happens? Do I mention I am considering a DMP?

Really grateful for some advice here

Hi there,

Welcome to the forum.

If you were to clear the overdraft you wouldn’t be treating your creditors equally. You would be prioritising one debt over your others.

If you have debt with your bank I'd suggest that you open a new basic bank account somewhere else. You could have your income paid into this new account so it’s secure.

You could get your money safe in another bank and then ask for the account to be placed just in your name. You could then tackle all of your debts together and offer reduced payments next month if you cannot manage the minimum.

It’s probably best not to mention you are considering a DMP. If your income is in a bank you have debt with that bank has the right to withdraw money to cover the debt you owe them. This is called the ‘Right of Set-off’. They may never do it but the bank does not have to give you warning before withdrawing money. Other creditors could also withdraw money if you have active direct debits set up.

I know you said you’re considering a DMP but if you’ve not had advice from us yet try our online debt advice tool, Debt Remedy. You’ll get a budget assessment and clear recommendations.

I hope this helps. If you need to talk through anything else feel free to contact us.

Thanks,
Jess