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StepChange_Private_Messages

yumbone wrote: »

Before I begin, I'll say that I know I'm irresponsible and financially inept! I'm also about to be in a lot of financial trouble.

Ok, here goes. I work for myself in a workshop behind the house. It's a small time manufacturing operation that grosses 20K a year. Every year, I pay for my raw materials (about 5K) on 0% credit card to bank account deals (3.5 to 4% fee). Instead of paying them off each year, I roll them over into a new 0% deal. Over the years, I've been living off my gross while allowing the debt to rack up.

So here I am, 35K in debt, 9K being a bank loan at 6.1%, and the rest at 0% on maxed out cards. There is nowhere to go for the next 0% deal, and my monthly bills are now over 500 pounds at month. I'm only just making the minimums each month, and as soon as the next 0% deal runs out next month and no where to roll it over, the house of cards comes tumbling down. If I have to pay interest, I won't be able to afford my monthlies. I knew this was coming but I put my head in the sand, refusing to think about it.

My only assets are my tools, which I need to keep working.

My wife holds the mortgage in her name, as well as everything else. My expenses are the food bill, car bills including petrol, electricity (the workshop uses a lot of power) and house repairs. I also have to service my debts which takes up half my monthly income.

My credit is good, no late payments or anything negative, except for having too much credit and near maxed out cards...so getting another card at 0% will probably be impossible.

We do have a joint current account, which I pay into every month, but never take out of. I have my own accounts for the business. Although I am registered as a business and pay my taxes, I don't have a business account, only a personal one.

That's my mess. I don't know what to do. I owe this money, so don't want to do an IVA. I looked into a DMP but I don't want my bad choices to affect our joint current account. My 6.1% loan is with First Direct, which is who our joint account is with. Do I have to declare ALL debts in a DMP?

Any advise will be appreciated!

Hi there,

We can help you decide on the best ways to manage your debts and the best way forward. Because you’re self-employed we would need to know a bit more about your situation before we could advise you on your options.

Our online advice tool, Debt Remedy, can make recommendations in 20 minutes using your budget info, income, assets and debt amounts.

We can then provide a solution and answer any specific questions you have. If you’d prefer to speak to an advisor call 0800 138 1111 with your budget info, we’ll put together a quick budget and offer a debt advice session.

Credit cards are unsecured debts – you only need to repay them in instalments you can afford but because you put your raw materials on your card and are self-employed we need to get some more information before we give specific advice.

Use Debt Remedy or contact us.

Thanks,

justick9

Hi, we have around £50,000 in debt on credit cards and a loan. We are just about managing to cover the debt payments by juggling with remaining spare credit to get 0% deals but our debt is constantly increasing. We don't want to damage our credit score with an IVA/DMP and wondered how easy it would be to get a secured loan to consolidate the debt and have some chance of actually paying it off. Husband was turned down for a an unsecured loan a couple of months ago ( we think because he had too much credit available to him as he's not defaulted at all) so we're in a ridiculous situation whereby a loan could drastically reduce our payments and make everything more manageable but is out of our reach. Any advice about the next step forward would be great.

Former_StepChange_Rachel

justick9 wrote: »

Hi, we have around £50,000 in debt on credit cards and a loan. We are just about managing to cover the debt payments by juggling with remaining spare credit to get 0% deals but our debt is constantly increasing. We don't want to damage our credit score with an IVA/DMP and wondered how easy it would be to get a secured loan to consolidate the debt and have some chance of actually paying it off. Husband was turned down for a an unsecured loan a couple of months ago ( we think because he had too much credit available to him as he's not defaulted at all) so we're in a ridiculous situation whereby a loan could drastically reduce our payments and make everything more manageable but is out of our reach. Any advice about the next step forward would be great.

Hi justick9 and thanks for your question.

We don’t usually recommend debt consolidation as it can often make your situation worse. You can try our debt consolidation calculator to determine whether or not it could be a good option for you: http://debtcheck.stepchange.org/ps/debt-consolidation-calculator/.

I’d recommend that you start by putting together a budget to work out how much you can afford to pay your creditors. If you can’t maintain the minimum payments to your creditors, there will be a debt solution available to you but it will affect your credit rating. Having said that, it’s unlikely that you’ll be applying for further credit while you still have existing debts.

You can use our online Debt Remedy (http://www.stepchange.org/msehelp) which will look at your situation and determine the options that are available to you. Or if you’d prefer you can ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

I hope this helps.

Kind regards,
Rachel

Madchickenlady

Hi I went onthe stepchange site and gave them all my details find out what my options are, they advised a DMP so I applied for a pack, however because I don't have a printer they are sending me the paperwork in the post, since then I have decided not to proceed and I haven't signed anything, does this mean I am not commited to going ahead and will the fact that I have enquired about this affect my credit rating because I have been refused for a 0% deal due to having a limited credit history, I have never been refused a card before and I am now worried that applying for the DMP has affected my chance of getting another deal

mum2one

Madchickenlady wrote: »

Hi I went onthe stepchange site and gave them all my details find out what my options are, they advised a DMP so I applied for a pack, however because I don't have a printer they are sending me the paperwork in the post, since then I have decided not to proceed and I haven't signed anything, does this mean I am not commited to going ahead and will the fact that I have enquired about this affect my credit rating because I have been refused for a 0% deal due to having a limited credit history, I have never been refused a card before and I am now worried that applying for the DMP has affected my chance of getting another deal

as nothing has been signed and returned, then activated then its just fresh air.

The reason that you could have been refused the card could just be that you have a lot of credit at the moment - its just one of those things that crossed at the same time x

StepChange_James

Madchickenlady wrote: »

Hi I went onthe stepchange site and gave them all my details find out what my options are, they advised a DMP so I applied for a pack, however because I don't have a printer they are sending me the paperwork in the post, since then I have decided not to proceed and I haven't signed anything, does this mean I am not commited to going ahead and will the fact that I have enquired about this affect my credit rating because I have been refused for a 0% deal due to having a limited credit history, I have never been refused a card before and I am now worried that applying for the DMP has affected my chance of getting another deal

Hi there,

You're not committed to the DMP at all. Even if you had returned the forms, you're able to cancel a DMP with us at any stage. It's one of the advantages of a DMP over the more involved ways of sorting out debts.

Nothing will have been reported on to your credit history about you using our service, so it won't be that which led to the credit card refusal.

The 0% offers that credit card companies offer are often the ones that expect the most from their applicants in terms of credit rating. There's loads of factors that go into their decisions so it could be a combination of things.

If you've not looked before you might find it useful to check your credit history, as you'll be able to see what information the credit card company will have been looking at. Noddle is a free service which lets you look at your Call Credit report: https://www.noddle.co.uk/.

As I mentioned above, there's no commitment to doing a DMP but if our Debt Remedy recommended it then it's worth considering as an option. It's hard for me to know what your best option is without seeing your details but I'd suggest studying your budget and making decisions based on what it shows you can afford.

All the best.

James

Fruball

Q. for Stepchange please...

I recently received some paperwork from you with my budget details etc and some of the income figures are incorrect and there are a couple of essential annual spends that I forgot to mention. Shall I correct them and send it back or do it over the phone and wait for new paperwork?

Many thanks for what you do

TomSawyer

Hello there,


hopefully someone can give me some advice or steer me in the right direction.


After having recently split with my partner, I decided to use a financial credit score website to see what my status was.
Unfortunately what I discovered was not good. A CCJ incurred for what I consider to be a small sum and an unpaid loan that defaulted in August 2008.


As I have now moved out of the matrimonial home and rented a place I received a letter from a debt collection company asking for validation of my new address and quoting my old address. At this point no mention was made of any debt. I did not phone or reply.
Approximately a week later I have received a letter from the bank who the loan was with stating that "as we haven't been able to agree a suitable repayment plan, we've transferred the loan to a debt collection agency. We have instructed (said agency) to arrange collection of the outstanding amount."


The letter further goes on to ask me to contact the debt collector to arrange to pay back the outstanding balance.


The sum involved is for just over £3000.


I always believed that my bills were being paid so unfortunately this has only come to light now when I am trying to begin a new life for myself.


I have read some posts that the collection company dealing with this debt can sometimes sink to unethical tactics to reclaim a debt.


Can anyone give me some options? Even if its just "pay the bill".


Yours


Tom

Former_StepChange_Rachel

Fruball wrote: »

Q. for Stepchange please...

I recently received some paperwork from you with my budget details etc and some of the income figures are incorrect and there are a couple of essential annual spends that I forgot to mention. Shall I correct them and send it back or do it over the phone and wait for new paperwork?

Many thanks for what you do

Hi there,

It's probably best that you give us a ring so we can make sure we get all the details right as quickly as possible.

Thanks and best of luck

Rachel

Former_StepChange_Rachel

TomSawyer wrote: »

Hello there,


hopefully someone can give me some advice or steer me in the right direction.


After having recently split with my partner, I decided to use a financial credit score website to see what my status was.
Unfortunately what I discovered was not good. A CCJ incurred for what I consider to be a small sum and an unpaid loan that defaulted in August 2008.


As I have now moved out of the matrimonial home and rented a place I received a letter from a debt collection company asking for validation of my new address and quoting my old address. At this point no mention was made of any debt. I did not phone or reply.
Approximately a week later I have received a letter from the bank who the loan was with stating that "as we haven't been able to agree a suitable repayment plan, we've transferred the loan to a debt collection agency. We have instructed (said agency) to arrange collection of the outstanding amount."


The letter further goes on to ask me to contact the debt collector to arrange to pay back the outstanding balance.


The sum involved is for just over £3000.


I always believed that my bills were being paid so unfortunately this has only come to light now when I am trying to begin a new life for myself.


I have read some posts that the collection company dealing with this debt can sometimes sink to unethical tactics to reclaim a debt.


Can anyone give me some options? Even if its just "pay the bill".


Yours


Tom

Hi there Tom, thanks for getting in touch.

The collection agency didn't break any rules in asking you to validate your new address. They wouldn't have mentioned the debt they were pursuing due to Data Protection.

That said, I can certainly understand where you're coming from in regards to the frustration you may be feeling at this debt coming to light just as you're starting over.

I just want to reassure you that we can help. We are a free and confidential debt advice charity. When a person has debts they're struggling to pay, we take a look at their whole budget and see what can be done to pay unsecured debts back in a realistic manner.

Your living costs - rent, council tax, utilities, food, etc - are most important, and need to be covered first before any payment is made to unsecured debts. Once you seek advice from us, the majority of creditors are usually very understanding and will do their best to work something out with you.

In regards to the dormant CCJ on your credit file, we would class that as a priority as well because the county court can take further enforcement action such as bailiffs on this debt at any time. Our advice is to negotiate a realistic payment with the county court by filling out an N245 form. There is a fee of £40 that needs to be enclosed with the form as a cheque or postal order, but you can have this reimbursed if you're on benefits or low income by enclosing an EX160 form.

Should you wish to go through your budget with us and get some long term advice, you can use our online advice tool Debt Remedy. It will help you put together a budget and personal action plan in just 20 minutes.

Hope this helps

Best regards

Rachel