Struggling with debt? Ask a debt advisor a question

Former_StepChange_Laura

cupcake1990 wrote: »

Hi

Basically i have around £5000 that i owe to 3 different creditors i also have 750 on a credit card but am managing to pay all of my minimum payments at the moment i was paying more but as its gone on longer it creeps up and im unemployed so its my partners wage that were living off and im paying 300 a month to creditors and its becoming a struggle as weve no money for anything else after bills and rent and essentials like gas electricity and so on. Im worried what will happen if i cannot make the minimum payments. I rang one creditor to set up a lower payment plan and they said id have had to have missed a payment before theyll sort one out and it'll be higher payments than my minimum payment is now ... so they want me to be in trouble before theyll help whereas im trying to prevent it. I started ordering things on credit when i was depressed to make myself feel better which was silly it spiralled put of control. I understand its my fault and i need to pay it off im not disputing that im just looking for a way to make it easier so i know i wont run into big trouble with it. They are all shop direct creditors and ive read catalogue debt is a non priority debt.

Thanks in advance

Hi cupcake1990,

Thanks for getting in touch and welcome to the forum. Acknowledging the debt is a problem is the first step in tackling it.

The spiralling situation you describe is one that many of our clients tell us about, so please know that you’re not alone and we are here to help. You mention your creditor told you that you need to miss payments before they’ll help, but there’s no reason why you need to wait for this to happen before you get debt advice.

From what you say in your message, I’d suggest you get in touch with us for free professional debt advice. One of our advisors will be able to have a chat with you about your financial situation, put together a sustainable budget, and work out the best way to deal with your debt. As well as giving free advice, we also offer a range of debt solutions which you can read about here: http://www.stepchange.org/Howwecanhelpyou.aspx

You can give our helpline a call on 0800 138 1111. It’s free to call from landlines and major mobile networks, and is open from Monday to Friday from 8am until 8pm and Saturdays from 8am until 4pm.

Alternatively you could use our online Debt Remedy tool, which will guide you through the same process as an advisor would over the phone. It usually takes around 20 minutes and you’d need details of your income and debts to hand. You can find Debt Remedy here: https://www.stepchange.org/debtremedy

I hope this helps.

Kind regards,

Laura

Former_StepChange_Laura

deptfreeplease wrote: »

I would like some advice on a dept on a loan for £15,000 took out with a bank 10 years ago. 8 years ago I lost my job and was unable to make any repayments so I set up a direct debit from another bank to repay £5 a month. I have continued to do this for the last 8 years but now the bank has written to me asking me to settle the dept for a reduced amount. The dept has ballooned to nearly £20,000 because of interest applied. In the last couple of years I have managed to get a job and save £2,000 and would like to know how I should approach the bank with an offer. Given the amount of time that has passed of was wondering what would be accepted by the bank.

Any advice would be greatly appreciated. I would also like advice on the effect this will have on my credit report.

Hi there,

Thanks for getting in touch.

I’d suggest you contact us and have a chat with one of our advisors. They’ll be able to talk to you about your situation and discuss the best ways for you to deal with your debt. Our advice is free and we offer a range of debt solutions which you can read about here: http://www.stepchange.org/Howwecanhelpyou.aspx

You mention making a settlement offer, which is something you’d be able to discuss with the advisor. You can read a bit more about settlement offers here: http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Settlementoffers.aspx

The advisor will be able to discuss the effect of any solution you’re recommended might have on your credit rating. However we would usually suggest dealing with your debts first and then looking at ways to build up your credit rating once you’re debt free.

I hope this helps.

Kind regards,

Laura

Former_StepChange_Laura

rainbow-unicorn-farts wrote: »

Hi,
When i was young and naive i got a loan with barclays, they offered an overdraft which i took then opened up an account with lloyds, had an overdraft with them too, got an argos card and had a orange phone contract.. i then lost my job and didn't know what to do, instead of ringing them and telling them my situation i decided to ignore it all. I obviously got letters from them telling me i owed them, and again i ignored them.. now i am older and want certain things in my life like a mortgage and a bank card again, i just don't know how to start rebuilding my record back to good credit.. I really need help.. it has been about 6 years since they have had any contact from me, i have heard all sorts of things like, your record gets wiped ect.. i don't know what to believe and its getting me down..
Thanks for your help.

Hello,

Thanks for getting in touch.

Your situation is similar to ones we hear regularly, and it can be overwhelming to deal with correspondence from creditors. It might be worth checking your credit file to start with and seeing what’s listed on there. Your credit file should give you an idea of what you owe and whether any action has been taken against you. You can check your credit file for free on Noddle: http://www.noddle.co.uk/ You’ll need to enter your card details but you won’t be charged.

You mention that you’ve heard debt can be wiped after six years. This probably refers to debt becoming ‘statute barred’. This is a protection offered by the Limitations Act, and is not a way to avoid paying debt. A debt becomes statute barred if you haven’t made payments towards it or acknowledged it in any way, and your creditors haven’t issued a County Court judgment against you in the past six years. If a debt is statute barred it means a creditor can’t take legal action to make you repay the debt, but it doesn’t mean the debt is written off. You can read more about statute barred debt here: http://moneyaware.co.uk/2013/10/statute-barred-debt/

I’d suggest you get in touch with us for free, professional debt advice. We’ll be able to look at your financial situation in more detail and work out the best way for you to deal with your debts. You can find our contact details here: http://www.stepchange.org/Contactus.aspx

You also mention you’re looking to get a mortgage in the future and so are concerned about building up your credit rating. I’d suggest taking a look at the advice available on MSE here: http://www.moneysavingexpert.com/loans/credit-rating-credit-score#boost.

I hope this helps.

Kind regards,

Laura

JayJay1983

Hi

Please could you help? I have a secured load of £4500 which is attached to my mortgage so at a interest rate of 5% for 28 years. I also have £7400 on a interest free credit card the interest free on £4100 Of it ends on the 1st December 2015 the rest is interest free till March 2017.
I have roughly £4000 coming to me from compensation from a car crash and was wondering if it's best to pay it off on the secured loan or the credit card?

StepChange_Jen

JayJay1983 wrote: »

Hi

Please could you help? I have a secured load of £4500 which is attached to my mortgage so at a interest rate of 5% for 28 years. I also have £7400 on a interest free credit card the interest free on £4100 Of it ends on the 1st December 2015 the rest is interest free till March 2017.
I have roughly £4000 coming to me from compensation from a car crash and was wondering if it's best to pay it off on the secured loan or the credit card?

[FONT=&quot]Hi JayJay1983,[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Thanks for posting.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Without knowing the full situation including your budget it would be difficult to offer specific advice, however it’s useful to consider the following:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Have a look at the interest rates and payment lengths of the loan and credit cards. Secured loans are usually structured over a longer period of time with a regular payment, whereas you’ll start to pay interest on the credit card debt before the end of the year.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Think about the long-term options and whether repaying the credit card debt works out cheaper for you. Is it more affordable clear the credit card debt before the interest-free period ends and then focus on paying the secured loan? You should also look at whether you’re able to make overpayments to your secured loan and by how much. Like mortgages, overpayments to secured loans aren’t always as flexible so check with the loan provider to see what options are available to you.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Put together a budget if you don’t already have one and look at how much extra you would repay when the interest is added to the credit card. If the debt starts to increase to more than you can afford, this could impact your repayments to other areas of your budget including the secured loan. Some people prefer to have regular and consistent payments rather than unexpected spikes that could be caused by the extra credit card interest.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Importantly, secured loans are attached to your property so if you did fall behind with payments the consequences are usually higher than unsecured debts such as the credit card. If this is something that worries you or you’re already struggling then you might benefit from advice from us. You can find out how to get in touch with us by visiting http://www.stepchange.org/Contactus.aspx.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I hope this helps,[/FONT]

[FONT=&quot][/FONT]
[FONT=&quot]Jen
[/FONT]

needtocleardebts

Hi

I have unsecured debts of about £6500, and am constantly harassed by letters and calls from debt collectors. I am guilty of burying my head in the sand but really want to get things sorted. I spoke to one of the debt collectors last night who said regardless of whether I go to a debt management plan, they will not deal with them and the calls will continue (today I've had 5) until the balance is paid off.

Is there anything I can do to stop these calls and get on top of things.

Former_StepChange_Rachel

needtocleardebts wrote: »

Hi

I have unsecured debts of about £6500, and am constantly harassed by letters and calls from debt collectors. I am guilty of burying my head in the sand but really want to get things sorted. I spoke to one of the debt collectors last night who said regardless of whether I go to a debt management plan, they will not deal with them and the calls will continue (today I've had 5) until the balance is paid off.

Is there anything I can do to stop these calls and get on top of things.

Hi there, thank you for getting in touch. I'm very sorry to hear of the situation you've been facing, and want to assure you that help is available.

Despite what this creditor has told you, you can ask the creditor to only contact you in writing if their contacting you by telephone is causing you stress. The fact of the matter is that your most important bills are your living costs, such as rent, mortgage, council tax and utilities. Unsecured debt such as loans, credit cards and catalogues are less of a priority and are only entitled to what's left over after you've covered your living costs.

We have a blogpost that goes into some further detail about what creditors can and cannot do on our blog: http://moneyaware.co.uk/2011/08/you%E2%80%99re-in-debt-but-what-can-your-creditors-actually-do/

If you would like some free and confidential advice on your debt problems, please get in touch. Our helpline is open from 8am to 8pm Mon - Fri and Sat 8am to 4pm. The number is 0800 138 1111.

Alternatively, our online advice tool Debt Remedy can help you put together a personal action plan in just 20 minutes: http://www.stepchange.org/debtremedy.aspx?domain=www.MoneyAware.co.uk

Kind regards

Rachel

IDESIGNFORLIFE

Hello ,

I bank with Halifax and have a £2200 overdraft limit which I have used constantly for about 5 years.

My salary of £1800 per month,a decent salary gets paid into it but after using this I always am left still in overdraft and get charged Halifax rates for using it per month which comes to £30-45 per month.

I want to pay this off but everytime I add say £100 in thats -£45 out at the end of the month so Im not getting anwhere fast.

Does anyone have any advice on how I can pay this back easier or wether I should take a loan out etc.

MANY THANKS

manda1345

Hi I wonder if someone could please help me. I need to get help with debt. Enter into a plan where it's taken out my hands and sorted properly. I have heard a lot of mixed reviews. Initially I thought going with CAB was the best and getting them to write to companies and then setting up a one off payment to them all was the best option however a few people have mentioned trust deed scotland. I have heard bad reviews though that if your wage varies they have the ability to just take extra. My wage does vary 6 months of the year.
Can someone please help me with what the best option is. I know my credit rating will be bad but iv heard doing trust deed makes it worse as you are writing off debt instead of paying it all off. I have around 6000 pound of debt.

Help would really be appreciated
Thanks

Former_StepChange_Rory

IDESIGNFORLIFE wrote: »

Hello ,

I bank with Halifax and have a £2200 overdraft limit which I have used constantly for about 5 years.

My salary of £1800 per month,a decent salary gets paid into it but after using this I always am left still in overdraft and get charged Halifax rates for using it per month which comes to £30-45 per month.

I want to pay this off but everytime I add say £100 in thats -£45 out at the end of the month so Im not getting anwhere fast.

Does anyone have any advice on how I can pay this back easier or wether I should take a loan out etc.

MANY THANKS

Hi there,

Thanks for posting.

It can often be tricky to clear a debt when the added interest takes a chunk out of what you've already paid off, but it sounds like you've made a good start.

Providing you keep making affordable payments to the overdraft, each month you'll be able to reduce it down some more. The benefit of this is that as the amount you owe reduces, the interest payments should also reduce too.

Sometimes it's easier to repay an overdraft when you're not using the account. You could look at opening up a basic bank account elsewhere with no overdraft and cutting up the debit card for the overdraft account. Continue making payments to the account and eventually the balance and interest should reduce to an affordable amount.

If you did look at taking out a loan remember that you'll still pay interest on the loan, which could end up being more than the interest for the overdraft in the long-term.

Hope this helps,

Rory