Struggling with debt? Ask a debt advisor a question

mum2one

changeforbetter - I was in the same position with an overdraft as well as cc etc, I was with the halifax so i opened a new account, I went to the Natwest - opened my account online and it was up and confirmed within 4 days, then I did the letters re debt only once i knew the new account was ok.

Just check that the new account doesn't belong to a "family" of the others, I know with the halifax, they are in with LLoyds and Bank of Scotland.

x

QuadDee

Very useful thanks Laura.

Next question....

I may have made some mistakes about how much I was earning & my employment status when filling out my credit card application.

How could this affect me?
I am afraid they might accuse me of deception/fraud, what could happen?

Former_StepChange_Rachel

QuadDee wrote: »

Very useful thanks Laura.

Next question....

I may have made some mistakes about how much I was earning & my employment status when filling out my credit card application.

How could this affect me?
I am afraid they might accuse me of deception/fraud, what could happen?

Hi there QuadDee,

If you’ve made a genuine mistake when telling your creditor about your income, I’d suggest getting in touch with them as soon as possible to let them know. We always recommend being honest with your creditors about your situation.

I hope this helps,

Rachel

dean8312

Hi all,
My partner took out a secured loan in Oct 2007 with Black Horse.
Omitting the personal details, she defaulted in April 2008 and went into arrears. She made little or no payments towards the arrears between April 2008 and meeting me in August 2009.
She was making token payments towards the arrears, until in approx. Dec 2010 we got an unannounced visit by a 'customer service representative', regarding the arrears. The arrears were standing at around £7000 as every month they were piling on collection charges and interest on the outstanding arrears. At the time his only interest was in getting these arrears paid back.
I asked him if Black Horse could reschedule the debt so that we could have a chance to repay it and he said, only verbally, that they would do nothing until we had paid, on time, a minimum amount each month for 12 months.
I told him I would pay at least £300 per month to which he verbally agreed and we made those payments each month until July 2011, when we had another unannounced visit from a different Customer Service Agent. Once again I said I would pay what we could off the arrears and upped our payments to £372 a month, even though these payments were just about servicing the interest on the arrears balance alone. Since Sept 2012, I have paid £375 a month and it has disappeared into a hole to pay the interest on the arrears alone, this amounts to some £14,000 or more. I rung Black Horse time and time again to ask them how we would ever be able to address the initial loan when my £375 was servicing only the arrears interest and was fobbed of and told 'don't worry about that at the moment, focus on making the payments'. When I questioned the cost of the interest on the arrears, on 4 different occasions, they immediately froze the interest on the arrears for 3 six-month periods and last time for six months.
In June 2014, after the final month of the arrears interest freeze, we received an envelope from Idem Servicing containing a forged letter from Black Horse saying that our debt had been sold to Idem and a letter from Idem telling us to continue making payments of the agreed amount straight to them.
Black Horse have sold Idem the loan, not, it would appear, the arrears.
I phoned the Financial Ombudsman to complain about the treatment I had received from Black Horse to say that despite all my efforts to sort out a payment schedule, they had just taken money off me to service the arrears interest and nothing had come off the loan. The Financial Ombudsman Service told me that it looked like the loan and the arrears had been treated as seperate debts and it was OK for Black Horse to service the arrears at the cost of not servicing the actual loan.
Can anyone advise me from a legal standpoint if it is indeed the case that these two debts are stand alone, as like I said we've paid all that money off the arrears, which seem to have disappeared now and paid nothing off the loan, for which we have Idem demanding payment for the loan amount.
Long winded I know but I hope someone out there can advise!!
Thanks in advance,
Dean.

Former_StepChange_Rachel

dean8312 wrote: »

Hi all,
My partner took out a secured loan in Oct 2007 with Black Horse.
Omitting the personal details, she defaulted in April 2008 and went into arrears. She made little or no payments towards the arrears between April 2008 and meeting me in August 2009.
She was making token payments towards the arrears, until in approx. Dec 2010 we got an unannounced visit by a 'customer service representative', regarding the arrears. The arrears were standing at around £7000 as every month they were piling on collection charges and interest on the outstanding arrears. At the time his only interest was in getting these arrears paid back.
I asked him if Black Horse could reschedule the debt so that we could have a chance to repay it and he said, only verbally, that they would do nothing until we had paid, on time, a minimum amount each month for 12 months.
I told him I would pay at least £300 per month to which he verbally agreed and we made those payments each month until July 2011, when we had another unannounced visit from a different Customer Service Agent. Once again I said I would pay what we could off the arrears and upped our payments to £372 a month, even though these payments were just about servicing the interest on the arrears balance alone. Since Sept 2012, I have paid £375 a month and it has disappeared into a hole to pay the interest on the arrears alone, this amounts to some £14,000 or more. I rung Black Horse time and time again to ask them how we would ever be able to address the initial loan when my £375 was servicing only the arrears interest and was fobbed of and told 'don't worry about that at the moment, focus on making the payments'. When I questioned the cost of the interest on the arrears, on 4 different occasions, they immediately froze the interest on the arrears for 3 six-month periods and last time for six months.
In June 2014, after the final month of the arrears interest freeze, we received an envelope from Idem Servicing containing a forged letter from Black Horse saying that our debt had been sold to Idem and a letter from Idem telling us to continue making payments of the agreed amount straight to them.
Black Horse have sold Idem the loan, not, it would appear, the arrears.
I phoned the Financial Ombudsman to complain about the treatment I had received from Black Horse to say that despite all my efforts to sort out a payment schedule, they had just taken money off me to service the arrears interest and nothing had come off the loan. The Financial Ombudsman Service told me that it looked like the loan and the arrears had been treated as seperate debts and it was OK for Black Horse to service the arrears at the cost of not servicing the actual loan.
Can anyone advise me from a legal standpoint if it is indeed the case that these two debts are stand alone, as like I said we've paid all that money off the arrears, which seem to have disappeared now and paid nothing off the loan, for which we have Idem demanding payment for the loan amount.
Long winded I know but I hope someone out there can advise!!
Thanks in advance,
Dean.

HI there Dean, thanks for getting in touch.

The separation of a debt from the interest and charges that have built up does happen quite a bit, and it’s our understanding that this is within fair practice guidelines. The Financial Ombudsman are the ‘end of the line’ when it comes to things such as this. They will have looked at this from all angles before telling you where they stand on the matter.

Should you be struggling to pay off this debt, we can help you. We provide free and confidential debt advice, and we can also give you long-term debt advice based on your current circumstances. There may also be a debt solution we can offer you that would make the debts you owe easier to manage.

If you would like advice on your budget and to explore what debt solutions are available, please use our anonymous advice tool Debt Remedy: http://www.stepchange.org/debtremedy.aspx?domain=www.MoneyAware.co.uk

Best regards

Rachel

bruticus

Hi,

I'm enquiring for my partner. She currently has debt at about £10-11k, which was taken out about 10 or so years ago. There are 5 debts, the largest around £6k, the smallest about £600. She ended up using a debt management company to resolve the issue and pays a regular monthly fee, of which, a decent amount goes to the debt company.

The issue we have now is this, her father died and we ended up with a little bit of money, ideally we would like to use no more than £6k to try and get rid of her debt. When she rang the debt management company, they told her that they may be able to get the debts paid off for £5-6k, but then we would need there fee on top, which is 40% of the final figure (£2400 on a figure of £6k). I have major issue with this, as it is obviously a lot of money, and if I can do it myself, I will.

I guess I have a few questions really;
1. If I have her details and paperwork, will the companies who are owed the debt talk to me?

2. What sort of settlement figure should I be looking at for each debt, baring in mind that they are over ten years old, and we have the opportunity to pay a sizeable amount back? The debt management company predict the full amount will take another ten years to pay off at the current rate.

3. She is worried that her current finances may end up being scrutinised by any creditors, are they able to do this?

4. Can I ring and ask if I can pay them off instead of her? I have the money to do so, she does not

Just getting the feelers for this at the moment. If anyone can point me in the direction of people/threads that have had experience of this, it'd be good!

Former_StepChange_Laura

bruticus wrote: »

Hi,

I'm enquiring for my partner. She currently has debt at about £10-11k, which was taken out about 10 or so years ago. There are 5 debts, the largest around £6k, the smallest about £600. She ended up using a debt management company to resolve the issue and pays a regular monthly fee, of which, a decent amount goes to the debt company.

The issue we have now is this, her father died and we ended up with a little bit of money, ideally we would like to use no more than £6k to try and get rid of her debt. When she rang the debt management company, they told her that they may be able to get the debts paid off for £5-6k, but then we would need there fee on top, which is 40% of the final figure (£2400 on a figure of £6k). I have major issue with this, as it is obviously a lot of money, and if I can do it myself, I will.

I guess I have a few questions really;
1. If I have her details and paperwork, will the companies who are owed the debt talk to me?

2. What sort of settlement figure should I be looking at for each debt, baring in mind that they are over ten years old, and we have the opportunity to pay a sizeable amount back? The debt management company predict the full amount will take another ten years to pay off at the current rate.

3. She is worried that her current finances may end up being scrutinised by any creditors, are they able to do this?

4. Can I ring and ask if I can pay them off instead of her? I have the money to do so, she does not

Just getting the feelers for this at the moment. If anyone can point me in the direction of people/threads that have had experience of this, it'd be good!

Hi there Bruticus,

Thanks for your message. You have a couple of options when it comes to making a settlement offer. You and your partner can speak to your creditors yourselves to try to come to an agreement with them. You mention that your partner is already with a fee charging debt management company. It might be that they offer a full and final settlement service, although they’re likely to charge for this.

We offer free and independent advice, and have a full and final settlement service. If you went through us to make your settlement offer, we would look at your financial circumstances in depth to work out a budget, and then look at putting the remaining money towards paying off the debt you owe. We always encourage clients to pay off their debt where they are able to do so. You can find out more about full and final settlements here: http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Settlementoffers.aspx

If you were to do this through us, we would be able to speak to you about your partner’s situation once she has confirmed with us that she is happy for us to do so. I don’t know what your creditors’ position would be on this.

If you’d like to get in touch with us, you can call our helpline on 0800 138 1111. It’s open from Monday to Friday from 8am until 8pm and Saturdays from 8am until 4pm, and is free from landlines and most mobiles.

I hope this helps,

Laura

Burrows2

Hi
I have recently been getting calls from a debt collection company (BTW, or BTC) and haven't answered. I checked my credit report and have seen a default for activ capital for £503 dating back to 2011. My question is this do I answer? What do I say? I am a student and already live on the bare minimum. I have no family to borrow the money from. If I pay does the default stay for another 6/7 years? If I don't pay or answer for next 3/4 years does it become statute barred and drop off my credit report if so it seems stupid to answer or pay.. Or will they enforce a CCJ.. It's obvious they don't have my address but have my mobile number. I'm confused by misinformation and just want to do the best/right thing.

Aloofdragon

Hi I have posted on the DRO and had amazing replies, I have just received my experian pins and we have a total for our debts I am awaiting a pack for DRO off stepchange, and a phonecall off Payplan and to be honest I have gone into serios stress mode, we have a total of £13,000 ish debt £10ish is on Hubbys name £3ish on my name all on my name are defaulted but are paying back into a credit union loan on my name, there is a default of £1000 on husbands name(ran up by me), BUT I know I am in no position to evade anything happening but all debts are covered til the end of month we are living off overdraft again as we have for months now but it feels like I am stealing every penny as we are going to change bank accounts when new account comes, do we struggle on and try and get through this? or do we run for the hills and let professionals help .. I will never ever run up debts again depression is a lady dog !!!

Former_StepChange_Rory

Burrows2 wrote: »

Hi
I have recently been getting calls from a debt collection company (BTW, or BTC) and haven't answered. I checked my credit report and have seen a default for activ capital for £503 dating back to 2011. My question is this do I answer? What do I say? I am a student and already live on the bare minimum. I have no family to borrow the money from. If I pay does the default stay for another 6/7 years? If I don't pay or answer for next 3/4 years does it become statute barred and drop off my credit report if so it seems stupid to answer or pay.. Or will they enforce a CCJ.. It's obvious they don't have my address but have my mobile number. I'm confused by misinformation and just want to do the best/right thing.

Hi there,

Thanks for getting in touch with us.

My advice would be to speak to the creditor and let them know about your situation. If you try to avoid the debt then this could eventually make the situation worse.

If you decide not to speak to the creditor then they may decide to take further action anyway so at least by speaking to them you’re letting them know what your situation is. They should discuss your options and may even advise you to get some help with your debts, which we’ll be happy to talk to you about.

Once you’ve defaulted on a debt the creditor is able to apply for a county court judgement (CCJ) at any point. If you don’t update your details with the creditor then any paperwork that gets sent out might go to the wrong address and this can cause problems further down-the-line and the possibility of further action being taken.

We wrote a blogpost about these situations on our MoneyAware blog which you can read here.

You’re not alone if you’re finding it difficult to repay debts and it can seem like you want to bury your head in the sand. There are ways you can get help though and as a charity we speak to lots of people in your situation every day.

If you’d like us to help we can offer our free, impartial and confidential advice and debt solutions and offer tailored advice for your situation.

You can do this by speaking to us over the phone by visiting the StepChange website or by using our free, anonymous Debt Remedy tool on our website.

I hope this helps you make the next steps forward, we look forward to hearing from you soon.

Rory