Struggling with debt? Ask a debt advisor a question

Sadlady

Is there a limit to what can be taken from job seekers allowance for debts?I have read £3.60 can be taken for council tax debt does that include the current year or can they take more.

SamFe

Hi

I've got debts that have been passed onto debt collection agencies or sold to a company. Can these debts be transferred onto an interest free credit card please?

Thanks

Former_StepChange_Rory

Sadlady wrote: »

Is there a limit to what can be taken from job seekers allowance for debts?I have read £3.60 can be taken for council tax debt does that include the current year or can they take more.

Hi there,

The normal deduction from Jobseekers Allowance (JSA) for council tax arrears is £3.65 a week and this usually cover all arrears including previous years.

This would continue until the arrears are repaid or until you find work and can afford to repay more towards the debt.

Rory

Former_StepChange_Rory

SamFe wrote: »

Hi

I've got debts that have been passed onto debt collection agencies or sold to a company. Can these debts be transferred onto an interest free credit card please?

Thanks

Hi SamFe,

This way of trying to deal with debts is known as debt consolidation. If you've already fallen behind with payments to debts then it's important to check all of the other options available and make sure you're making the right choice.

While consolidating debt often sounds like a promising solution, this could make your situation worse. It's also worth mentioning that if you've defaulted on debts and they've been passed to debt collection companies then this will likely affect your credit file and taking out more credit isn't always possible.

I'd recommend getting some free debt advice first to see if you'd benefit from repaying your debts without putting the debt onto a credit card.

You can read more about debt consolidation and get free, impartial advice by using our Debt Remedy tool by visiting the StepChange website.

Rory

SamFe

Hi Rory

Thanks for the reply. I've decided to do it that way if I can transfer debt that's been passed/sold to agencies. Ease can you advise whether this is possible?

Thanks

StepChange_Private_Messages

SamFe wrote: »

Hi Rory

Thanks for the reply. I've decided to do it that way if I can transfer debt that's been passed/sold to agencies. Ease can you advise whether this is possible?

Thanks

Hi SamFe,

Thanks for your message. It may be technically possible to pay the debts off using a credit card, but you'd need to speak to the credit card company and the debt collection company about this.

I understand you’ve said that you have made the decision to go ahead with this, but I’d like to reiterate what my colleague Rory said earlier. The reason why we strongly suggest looking at other options is that if you shifted the debts onto a credit card, you'd need to repay the credit card before interest-free period ended. If you didn't do this, the interest could build up and you may start to struggle to with those payments.

As debt advisors we come across this situation a lot, and we have seen that consolidating debt in this way can lead to debt problems. MoneySavingExpert.com has a graphic which explains how this can happen: http://www.moneysavingexpert.com/loans/debt-help-plan

Sometimes debt collection agencies will agree to freeze interest on the repayments until all of the debt has been cleared as long as you offer a realistic and fair payment, which wouldn't involve taking out further debts. Putting together a realistic and fair offer of payment is something we can help you with for free.

I would recommend that you think carefully about the longer term before committing yourself to further credit. If you would like a second opinion then I would suggest you speak to another organisation which offers free debt advice, such as your local CAB.

Kind regards,

Laura

rattters

Do you have to add all your creditors to your DMP? I have 4 loans due to finish in 2-3 years and am looking at getting my credit cards paid off in 3 years- the payments I have calculated for pro rata payments to ALL creditors results in pretty much similar payments to the loan companies.
Can I leave the loans as they are and contact the credit card companies with my DMP details?

Also- does the new bank account HAVE to be a basic account?

Just so confused what to do for the best!!

Thanks in advance

StepChange_Jen

rattters wrote: »

Do you have to add all your creditors to your DMP? I have 4 loans due to finish in 2-3 years and am looking at getting my credit cards paid off in 3 years- the payments I have calculated for pro rata payments to ALL creditors results in pretty much similar payments to the loan companies.
Can I leave the loans as they are and contact the credit card companies with my DMP details?

Also- does the new bank account HAVE to be a basic account?

Just so confused what to do for the best!!

Thanks in advance

Hi Rattters,

Thanks for your message.

If you were to enter a DMP with us you would need to include all of your unsecured debts on it.

The advice and solutions we provide are on the basis that we treat everyone as fairly and impartially as possible. To leave certain creditors out of your DMP may mean that your other creditors could interpret this as ‘preferential treatment’. This could mean that they are less willing to accept a reduced payment from you. All of your debts are recorded on your credit file, so all of your creditors would be able to see what you’re paying to each of them. Based on this, we would suggest you do the same on a self-managed DMP.

The benefit of setting up a basic bank account is that it separates your money from any banks that you have a current account with and are in debt with. This way, they can’t take any extra money from you for repayments and you can be sure your money is going towards priority bills like council tax etc. The reason we’d suggest getting a basic bank account is because a current account often requires a credit check, which may lead to your application being turned down. There’s also potential for charges on most current accounts which you don’t usually have to deal with when you have a basic bank account.

You can read more about basic bank accounts here:

http://www.stepchange.org/Debtinformationandadvice/Budgeting/Moneymanagement/Bankaccounts.aspx

I hope this helps and if you’ve got any more questions let us know.

Jen

flis21

Hello,


I am having some problems at the moment trying to sort out my financial statement. I get most of my money 4 weekly, but all the financial statement tools round it up to monthly. I understand that this shows how much I receive accurately over a year, but it means it is showing I have more available spare income a month that I actually get in my bank. I am worried if I sign up to a DMP on this basis I won't be able to keep up with the payments. Is there any way around this? Can you do a DMP on a 4weekly basis instead of a calendar month basis?


Thanks,
Flis

rattters

Thanks Jen- thats brilliant