Struggling with debt? Ask a debt advisor a question

sourcrates

marksa91 wrote: »

I'm new to this as I have been hiding my head in the sand for years, and only recently have I faced my debts head on, so now I'm hoping to get a little advice. Although my debt's didn't add up to tonnes (around £4000, in a mix of credit cards, loans/pay day loans, behind on bills etc), being on a low income it was crippling. I ended up having to move back home as I couldn't keep up with payments. I was very lucky as last year I inherited £2500 which cleared more than half of my debt, however I ended up slightly adding to it again due to my car breaking down only 2 weeks after paying my credit card!
I have now borrowed a further £1000 from a family member, and I've been approved for a 0% interest balance transfer card with a limit of £400 - perfect for clearing my credit card debt which is only £300. I have worked out by this time next year I will have paid back my family member and the barclaycard and will be debt free.
I did the soul destroying but correct thing to do and checked my credit rating - 1 out of 5. I have no CCJs, but one default (which will be settled at the end of this month) and quite a few missed payments over the past few years. I know these things stay on my credit file for a fair few years, but does this mean my credit rating won't improve at all until the full 7 years? I am not expecting my credit score to be magically fixed as soon as I have paid back my creditors, however it would be nice to at least see an 'average' rating within 3 years of managing my finances effectively?
I'd love to hear from people, especially anyone who has turned their score from a very poor to a good. I'm in a long term relationship and we would love to get a mortage in around 5 years time, would this be possible if from this day forward I'm well behaved with my money? lol
Thanks in advance

Hi,
Credit score is fairly meaningless to be honest, defaults, late payments etc, stay on your file for 6 years, after which they will just disappear, and it will be like they were never there.

To improve your rating, just make sure you pay your credit bills on time every month, and over time, it will improve.

Former_StepChange_Rory

marksa91 wrote: »

I'm new to this as I have buried my head in the sand for years, and only recently have I faced my debts head on, so now I'm hoping to get a little advice. Although my debt's didn't add up to tonnes (around £4000, in a mix of credit cards, loans/pay day loans, behind on bills etc), being on a low income it was crippling. I ended up having to move back home as I couldn't keep up with payments. I was very lucky as last year I inherited £2500 which cleared more than half of my debt, however I ended up slightly adding to it again due to my car breaking down only 2 weeks after paying my credit card!
I have now borrowed a further £1000 from a family member, and I've been approved for a 0% interest balance transfer card with a limit of £400 - perfect for clearing my credit card debt which is only £300. I have worked out by this time next year I will have paid back my family member and the barclaycard and will be debt free.
I did the soul destroying but correct thing to do and checked my credit rating - 1 out of 5. I have no CCJs, but one default (which will be settled at the end of this month) and quite a few missed payments over the past few years. I know these things stay on my credit file for a fair few years, but does this mean my credit rating won't improve at all until the full 7 years? I am not expecting my credit score to be magically fixed as soon as I have paid back my creditors, however it would be nice to at least see an 'average' rating within 3 years of managing my finances effectively?
I'd love to hear from people, especially anyone who has turned their score from a very poor to a good. I'm in a long term relationship and we would love to get a mortage in around 5 years time, would this be possible if from this day forward I'm well behaved with my money? lol
Thanks in advance

Hi there,

Things that appear on your credit file will generally only show for a maximum of 6 years. Nothing that shows is permanent, however there are still lots of myths around "blacklisting" that simply aren't true.

The three main credit referencing agencies may also rate you differently depending on their own information and no two are usually the same.

You can get lots of helpful advice from credit reference agencies on ways to help improve your credit report for the future, but we'd usually say focus on clearing the debts you have and working on becoming debt free and then you can look at improving your credit score in the future.

Best of luck on becoming debt free

Rory

Poorlas

I really need some advice I have old debts resulting from a failed IVA which failed 6 years ago they total around £25,000. I admit I've not been in contact with any of the creditors in all that time and have gone about my life. I have a son who is in receipt of Dla for his autism I work part time and live on tax credits and housing benefit. What should I do as I am now beginning to receive contact from a debt collection agent I do realise this won't just go away but I am losing sleep with worry. Thank you.

Former_StepChange_Rory

Poorlas wrote: »

I really need some advice I have old debts resulting from a failed IVA which failed 6 years ago they total around £25,000. I admit I've not been in contact with any of the creditors in all that time and have gone about my life. I have a son who is in receipt of Dla for his autism I work part time and live on tax credits and housing benefit. What should I do as I am now beginning to receive contact from a debt collection agent I do realise this won't just go away but I am losing sleep with worry. Thank you.

Hi there,

It sounds like you've had a difficult time dealing with your debts, but it's never too late to get some advice.

I'd recommend speaking to us for some free, impartial debt advice. We'll be able to look at your whole situation and see what advice and solutions are available to you.

Try not to be too put off by the issues you've had in the past with your failed IVA, we're only interested in offering advice that's based on what's right for you.

I'd recommend finding out some more details about the outstanding debts as a good starting point. You can check your credit report for free online at Noddle.co.uk

Once you have a clearer picture about your debts, you can get in touch with us by visiting the StepChange website or you can use our free online Debt Remedy tool.

I hope this helps, please get in touch if you need help.

Rory

pompetline1

Hi,

I am in need of some advice.

I have debts in the region of £26,000. All are in the form of bank loans and credit cards. Each payment is paid on time and I've never missed a payment.

I am just managing to pay everything every month but things are very tight and I have to live off my credit card to survive month to month.

I am getting so stressed about things I have now been signed off by my doctor!

Any advise will be greatly appreciated as I am desperate to be loan free.

Kind regards

StepChange_Jen

pompetline1 wrote: »

Hi,

I am in need of some advice.

I have debts in the region of £26,000. All are in the form of bank loans and credit cards. Each payment is paid on time and I've never missed a payment.

I am just managing to pay everything every month but things are very tight and I have to live off my credit card to survive month to month.

I am getting so stressed about things I have now been signed off by my doctor!

Any advise will be greatly appreciated as I am desperate to be loan free.

Kind regards

Hi there,

Thanks for posting.

I’m sorry to hear you’re struggling with things at the moment. Debt problems can be very stressful and worrying, please know you don’t have to deal with this alone, we’re here to help you every step of the way.

It sounds like you’d really benefit from some free and impartial advice about your situation.

I’d recommend you give our Helpline a call and have a chat with one of our advisors. They’ll be more than happy to talk through your budget, income and debts to help decide on a solution to help you deal with your debts.

You can find out how to get in touch with us here:

http://www.stepchange.org/Contactus.aspx

Or if you’d prefer, you could use our online tool Debt Remedy. Much like when you call our Helpline, Debt Remedy
will take information about your income, debts and budget to help create a free personal action plan to help deal with your debts.
The only difference is you enter the information online rather than talking with an advisor.

Debt Remedy takes around 20 minutes to complete, you can find it here:

http://www.stepchange.org/Debtremedy.aspx

I hope this helps and if you’ve got any more questions you know where we are.

Jen

Sadsailor

I have finally had my lightbulb moment! After years of struggling with PTSD I now realise how stupid I've been. I have about 26000 pounds on a DMP but have since added to my stupidity with payday loans. I have missed the last dmp payment and not paid this months. All of this I kept from my wife who has now found out. After the fallout from these revelations she has taken control of the family budget. I need some advice on where to start. Any help much appreciated!

StepChange_Jen

Sadsailor wrote: »

I have finally had my lightbulb moment! After years of struggling with PTSD I now realise how stupid I've been. I have about 26000 pounds on a DMP but have since added to my stupidity with payday loans. I have missed the last dmp payment and not paid this months. All of this I kept from my wife who has now found out. After the fallout from these revelations she has taken control of the family budget. I need some advice on where to start. Any help much appreciated!

Hi there,

Thanks for posting.

If you’ve missed payments on your DMP, we’d recommend getting in touch with your DMP provider to explain your situation.
They should be able to advise you on what they can do to help.

If you’re paying a fee-charger for your DMP, you should be aware this is something we are able to offer for free. If you’ve not yet received free debt advice, I’d suggest you contact our Helpline for some free advice.

Our Helpline advisors would be happy to have a chat with your about your situation. They’ll take information about your income, expenditure and debts, and any recent changes to your situation. They’ll then be able to discuss what solutions may be suitable for you.

You can find out how to get in touch with us here:

http://www.stepchange.org/Contactus.aspx

Alternatively, you can use our Debt Remedy tool online:

http://www.stepchange.org/Debtremedy.aspx

Debt Remedy takes around 20 minutes to complete and works in the same way as our Helpline. You just need to enter your income,
debts and budget online and it’ll create a personal action plan to help you deal with your debts.

I hope this helps and if you’ve got any more questions you know where we are.

Jen

Flibbitygibbit

Hi I hope Im posting this properly as not used to using these things!

Ive been an overspender for years plus Ive made some really bad financial decisions in the past and am in the frustrating position of owing £15, 000 bank loan, £2,000 each on 2 credit cards and £1,000 on another and £1,700 overdraft.

I can pay these but am not sure of the most cost effective way to do so? Can anyone advise me the best way to pay off my debts?

So frustrated with myself and been doing a lot of reading on reasons people overspend and am determined to stop!

Former_StepChange_Rory

Flibbitygibbit wrote: »

Hi I hope Im posting this properly as not used to using these things!

Ive been an overspender for years plus Ive made some really bad financial decisions in the past and am in the frustrating position of owing £15, 000 bank loan, £2,000 each on 2 credit cards and £1,000 on another and £1,700 overdraft.

I can pay these but am not sure of the most cost effective way to do so? Can anyone advise me the best way to pay off my debts?

So frustrated with myself and been doing a lot of reading on reasons people overspend and am determined to stop!

Hi there,

It's good to hear that you've read around the topic of overspending and dealing with debts, you'll get lots of support on the MSE forums from people in similar situations.

There's a number of different ways to deal with debts that haven't necessarily become a problem but you're looking to clear them as quickly as possible.

One option is to make sure you pay more than the minimum balance each month. This can save you money because as the debt reduces, you also reduce the amount of interest and other charges which you would normally pay if you were only making the minimum payments.

Also, shop around to see if you can find better deals such as cards that offer cheaper rates of interest. But be careful and don't use these to borrow any more new money and always carefully check the terms of the new agreement before signing into anything.

Sometimes people find it easier to repay overdrafts when they're not using them. You could switch banks and repay the overdraft each month until it's cleared. If your loan is with the same bank, this usually isn't an issue as long as the payments are kept up-to-date from the new account.

We would normally not advise taking out a large consolidation loan to repay your debts and then start using the existing limits to build up even more debt. Once you have paid your debts off, cancel the agreements and destroy any cards.

To help you find the best way of reducing or paying your debts off, take a look at the main https://www.moneysavingexpert.com website for comparisons or speak to an independent financial advisor.

If the debts have become a problem and you feel like you're going to struggle to make even the minimum payments then this could be a sign that you'd benefit from some expert debt advice. If your budget is already quite restricted then repaying debts might cause you to fall behind with other areas or make cutbacks to essential spending.

You could start by using our free, anonymous online Debt Remedy tool which will ask details about your finances to offer practical advice on how to deal with your debts in about 20 minutes.

If you're able to afford making payments to your debts without it impacting your household bills and living costs then this is all about making sure you keep on top of your budget and payments.

I hope this helps,

Rory





I hope this helps,

Rory