Struggling with debt? Ask a debt advisor a question

sourcrates

If all the above fails, I would not waste any more money servicing this bank loan, you may get a new job soon, or you may not, I think you need to take steps to reduce your outgoings.

This would involve ceasing all credit payments for a few months while you take stock of your situation, in the meantime you write to your bank explaining your out of work, and can only afford x amount per month for the time being.

Ideally you should of done this before all your redundancy money ran out, people struggle on, waste all there savings, then ask for help, instead of seeking help earlier.

Advice about getting the basic bank account is good, and you should do that straight away.
Coop do a good basic account called "cash minder" you get a debt card with this account, most only supply a cash card.

Former_StepChange_Laura

HarmonyDragon wrote: »

Hi, I am seeking advice on how to deal with a bank loan.

I was made redundant a year ago and have only had a couple of months work in November and December. Until now I have been living on redundancy money and keeping up repayments on my bank loan which is 120 a month.

I started signing on in February and I receive £312 a month JSA and £238 HB (,for a room in a shared house)

We have an arrangement for rent and bills where I pay £445 a month into a shared bill account, this includes £297 for rent, the rest is utilities, TV\phone\internet and food.

I have been stretching my last earnings and the last of my redundancy pay to cover all this plus £52.50 for a bus pass, £10 for a phone, 20 towards a credit card bill which is interest-free, and £15 for my overdraft.

So my income is £550 a month and outgoings about £545, not including clothes, toiletries or anything else, and then there is the loan.

Because I had some earnings left I didn't use my benefits in February, so I can cover the shortfall for one, maybe two more months and I am due a tax rebate in April or May which should be several hundred pounds. Meanwhile I am looking for work. But I can see that this is not sustainable in the long term.

It's been suggested to me that I could renegotiate my loan payments with the bank and they should be agreeable as I have a long relationship with them and a clear reason why it is necessary. But I've also heard that once you let them know you are in trouble, they are likely to wait for you to default and then start collections procedures. I'm worried because this is the same bank where I have my current account, which is overdrawn, and my credit card with £1000 borrowed on an interest a free deal. I don't want them to start taking amounts from my current account or demanding payment for my credit card balance. I also don't want to leave this to get worse!

Hi there HarmonyDragon,

Thanks for your message and I’m sorry to hear about your situation. First of all, you’ve come to the right place to ask for advice. Acknowledging the problem is a big step towards dealing with it, and you should know this is something we can help you with.

We offer free and impartial debt advice, and a range of debt solutions. I’d suggest you get in touch with us and have a chat with one of our advisors. They’ll be able to discuss your financial situation with you in more depth and recommend the best way for you to deal with your debt. They’ll be able to look at your income and expenditure, and make sure your money goes towards paying your essential costs such as rent, food and utilities first. You can find out how to get in touch with us here: http://www.stepchange.org/Contactus.aspx

I also agree with mum2one about getting a new bank basic bank account, and this is something we regularly recommend to people who get in touch with us. I understand you’ve been a customer with your current bank for a while, but it’s important to keep your money safe. Banks will regularly have a clause in their loan agreement that gives them a right of ‘set-off’. This means that if you default on payments they would be within their rights to take money from your current account and use it to pay off any outstanding debts you have with them.

I also understand you may be concerned about your credit report, but we would always recommend dealing with your debt first and then taking steps to build up your credit file. This blogpost is aimed at people who are coming to the end of a debt management plan and want to improve their credit file, but you might find it relevant and interesting to have a read through: http://moneyaware.co.uk/2013/10/how-to-improve-your-credit-rating-after-a-dmp/

I hope this helps.

Kind regards,

Laura

StepChange_Private_Messages

marcosdjcm wrote: »

Decision time

Hi,

I am in a strong position to get a DRO, but have also been offered help from a family member to shift/consolidate my debt to a loan that they can get.

It's totally realistic that I can pay this loan in 5 years, but some friends advise me to take the DRO anyway as these things shouldn't involve a 3rd party etc.

It's a nice gesture from the family member and it won't cause any dramas. But not sure which I prefer, having a solid credit rating and having the option to think about mortgage and other things in the next 6 years, or just writing off £10k in debt and dealing with a ruined credit score for 6 years.

any thoughts?

Hi there,

Thanks for your message. As is often the case, there are pros and cons to both of these options.

Borrowing money from family members can help to reduce some of the more stressful elements of owing money, such as contact from creditors and added interest. However borrowing money from family members can also put strain on relationships. As you mention your family member would be taking out debt themselves, they should also consider the fact that this debt would be in their name and connected to their credit file, regardless of what they use the money for.

There are also pros and cons of DROs. A DRO is considered a low-cost alternative to bankruptcy, and could help you to clear your debts in a year. However it is also form of insolvency and, as you mentioned, it’s likely have an impact on your credit rating, so it’s something you should consider carefully.

If you haven’t yet been in touch with us for free advice, I’d suggest you give one of our advisors a call. They’ll be able to discuss your financial situation with you in more depth, and recommend the best ways for you to deal with your debt. If a DRO is something we’d suggest for your situation then having this information could help you make an informed decision about how to proceed. You could also have a chat with the advisor about how any of the debt solutions they recommend might affect your credit file.

You can find out how to get in touch with us here: http://www.stepchange.org/Contactus.aspx

I hope this helps.

Kind regards,

Laura

trying_to_get_out

Hi,


New to this so please bear with me.


I received a CCJ claim form through the post but did not reply to it. This was not intentional, the letter was received by the house but as my mother collects the kids for me I was not aware the claim form had arrived through the post. I have 3 kids and it was found when tidying the boys' bedroom.


As soon as I found it I registered at moneyclaim.gov.uk to try and defend the claim but the website told me that a judgement had been made the day before.


I then went online to try to find help.


To the best of my knowledge the debt was paid 7 years ago with a consolidation loan and I had ignored any correspondence as I believed they had to check their records. In any case knowing the consolidation loan was taken in 2008 then surely the debt would be statute barred?


I immediately sent off a letter asking for evidence that the debt wasn't statute barred. Today I received a letter from the solicitors acting on behalf of the claimant stating that the default date for this account was 16th April 2009 and therefore 6 years has not expired. I do not believe this to be true as I would never make any payment on the 16th of any month (other than day to day living). But they have not provided me with the proof I need in order to make a defence on the grounds of statute barred.


The judgment for claimant is dated 6th March and it states I must pay the claimant the full amount of £8400 by 19th March.


I know that I can fill in a set aside form (read it somewhere) but not sure that I have good grounds (unless kids writing on the envelope is evidence) but I only have until 19th March to either ask to set it aside (not sure where with this short notice I find £155 fee) or do I fill in another form to ask for instalments in order to buy time?


I really don't know what to do but endless internet searching isn't helping me and the less I sleep the stupider I'm becoming.


I really don't need bailiff costs or our car taking away because the £500 its worth wont change my debt and how would I get to work?


Its just so frustrating that the solicitors have given a date but seem more intent on me owning up to something I have doubt over by sending me an income and expenditure form.


Oh and yes if I do complete a set aside form I'm terrified and embarrassed about sitting in front of a court when all I really need to know is whether the amount is statute barred or not.


Will the bailiffs be sent on the 20th of March or do I have time to argue my case with the claimant?


I also read somewhere that I have to do something in a timely manner but I just don't know what to do.


Sorry to have gone on but I needed to tell someone.

sourcrates

If you go for the set aside, on the grounds the debt is SB, then it's up to them to prove otherwise.
Doubt Bayliffs will be knocking anytime soon, you should have the option of paying by instalments if it's not proved SB.

You would be better served ringing National Debtline in the morning for quicker advice.

StepChange_Jen

trying_to_get_out wrote: »

Hi,


New to this so please bear with me.


I received a CCJ claim form through the post but did not reply to it. This was not intentional, the letter was received by the house but as my mother collects the kids for me I was not aware the claim form had arrived through the post. I have 3 kids and it was found when tidying the boys' bedroom.


As soon as I found it I registered at moneyclaim.gov.uk to try and defend the claim but the website told me that a judgement had been made the day before.


I then went online to try to find help.


To the best of my knowledge the debt was paid 7 years ago with a consolidation loan and I had ignored any correspondence as I believed they had to check their records. In any case knowing the consolidation loan was taken in 2008 then surely the debt would be statute barred?


I immediately sent off a letter asking for evidence that the debt wasn't statute barred. Today I received a letter from the solicitors acting on behalf of the claimant stating that the default date for this account was 16th April 2009 and therefore 6 years has not expired. I do not believe this to be true as I would never make any payment on the 16th of any month (other than day to day living). But they have not provided me with the proof I need in order to make a defence on the grounds of statute barred.


The judgment for claimant is dated 6th March and it states I must pay the claimant the full amount of £8400 by 19th March.


I know that I can fill in a set aside form (read it somewhere) but not sure that I have good grounds (unless kids writing on the envelope is evidence) but I only have until 19th March to either ask to set it aside (not sure where with this short notice I find £155 fee) or do I fill in another form to ask for instalments in order to buy time?


I really don't know what to do but endless internet searching isn't helping me and the less I sleep the stupider I'm becoming.


I really don't need bailiff costs or our car taking away because the £500 its worth wont change my debt and how would I get to work?


Its just so frustrating that the solicitors have given a date but seem more intent on me owning up to something I have doubt over by sending me an income and expenditure form.


Oh and yes if I do complete a set aside form I'm terrified and embarrassed about sitting in front of a court when all I really need to know is whether the amount is statute barred or not.


Will the bailiffs be sent on the 20th of March or do I have time to argue my case with the claimant?


I also read somewhere that I have to do something in a timely manner but I just don't know what to do.


Sorry to have gone on but I needed to tell someone.

Hi there,

Thanks for posting.

I’m sorry to hear you’re having to deal with this at the moment and understand it must be very stressful. Please know you don’t have to deal with this alone and we’re here to help. We can’t give specific advice as obviously we don’t have all of the details, but we can give you general information on statute barred debts and CCJs/court action.

It’s a little unclear what the debt is for, however the same rules on statute-barred debts apply to most unsecured debts, so we’ll cover these.

A debt usually becomes statute barred if you haven’t acknowledged or made payments to it for a period of six years and the creditor hasn’t taken court action against you, such as a CCJ. It’s also not six years from the date of the default being applied, it’s the date of last payment or acknowledgement.

If this is the case, then the debt could be statute barred, meaning that it is now not enforceable through the court. Although this doesn’t mean the debt is written off, it does mean that creditors shouldn’t take court action to recover the money.

With the CCJ now being in place, it would cost you to apply to have the judgment set aside and removed, on the grounds that the debt is statute barred. You’d need to pay £155 court fees for the application and provide specific evidence to show that the debt isn’t statute barred at court.

The court also gives you the opportunity to defend the CCJ when you receive the paperwork, and they usually don’t consider misplaced or missing forms as a suitable reason for not defending the judgment at the time. It wouldn’t be possible for us to tell you whether or not defending the CCJ and going to court to prove this would be successful – it really is on a case-by-case basis.

If you decide not to apply to set-aside the CCJ you’ll need to complete an N245 form to ask for instalments and you’ll need to provide proof of what you can pay towards the debt based on your income and budget.

It’s important to not ignore the situation as this could result in the creditor taking further action. However if you take the steps to deal with the situation you’re both more likely to come to an agreement.

I’d suggest giving our Helpline a call so one of our advisors can discuss the situation for you and the options you have moving forward. Whatever you decide to do, we’ll be able to help you and advise on the next steps you should take.

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

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

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

Jen

gkled11

Please if anyone can help,

We are currently struggling financially and somehow managing to pay of some of the debts we owe but not all of them. (Totalling around 10k, By the time I pay them all it will be around 4/5 years or I have been considering a debt relief order.

So do I keep paying the debt off or get it wiped for £90??

Many thanks

Glenn

mizzymac

Hi
Have had some advice from other threads and now a bit confused whether would would need to go down the DMP or Iva route.
Have huge debt causing massive stress so it's now time to take action.
We have £75000 worth £27,000 is a secured loan the rest is unsecured. We haven't missed any payments. Advice so far has been not to mortgage and use the equity towards some of it.
I also need to know if our employment could be affected by entering into an agreement. Have do e the step change tool and it recommends DMP I live in Scotland would it still be the same.
Thanks can no longer avoid dealing with this.!!

Former_StepChange_Laura

gkled11 wrote: »

Please if anyone can help,

We are currently struggling financially and somehow managing to pay of some of the debts we owe but not all of them. (Totalling around 10k, By the time I pay them all it will be around 4/5 years or I have been considering a debt relief order.

So do I keep paying the debt off or get it wiped for £90??

Many thanks

Glenn

Hi there,

Thanks for your question and I’m sorry to hear you’re struggling financially at the moment. You’ve come to the right place to ask for help!

It’s good to hear that you’ve researched your options. It’s important to remember that a DRO is a form of insolvency, and so is something you should consider carefully. We have more information which may help you to weigh up your options on our website: http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx

If you haven’t already had free debt advice, I’d suggest you get in touch with us. We’ll be able to look at your financial situation and recommend the best way for you to deal with your debts, which may include a DRO. The advice we give is free and impartial, and we offer a range of debt solutions.

You can see which debt solutions would be best for your situation by completing our online Debt Remedy tool: http://www.stepchange.org/Debtremedy.aspx This usually takes around 20 minutes, and you’ll need some details about your income, expenditure and debts to hand.

Alternatively you could give our Helpline a call and speak to one of our advisors. You can find our contact information here: http://www.stepchange.org/Contactus.aspx

I hope this helps.

Kind regards,

Laura

Former_StepChange_Laura

mizzymac wrote: »

Hi
Have had some advice from other threads and now a bit confused whether would would need to go down the DMP or Iva route.
Have huge debt causing massive stress so it's now time to take action.
We have £75000 worth £27,000 is a secured loan the rest is unsecured. We haven't missed any payments. Advice so far has been not to mortgage and use the equity towards some of it.
I also need to know if our employment could be affected by entering into an agreement. Have do e the step change tool and it recommends DMP I live in Scotland would it still be the same.
Thanks can no longer avoid dealing with this.!!

Hi there,

Thanks for your message and I’m sorry to hear you’re finding your situation stressful, but you’ve come to the right place to ask for help.

I’m glad to hear you’ve used our Debt Remedy tool. Debt Remedy takes you through the same advice process as an advisor would if you were to give our helpline a call. As long as you answered the Debt Remedy questions as accurately as possible, you can be assured the advice you’ve been given is most appropriate for your situation.

A DMP works in the same way in Scotland as other parts of the UK. If you’d like to read a bit more about DMPs then our website has plenty of information: http://www.stepchange.org/Howwecanhelpyou/DMPDebtmanagementplan.aspx

As a DMP is an informal arrangement between you and your creditors, it’s unlikely it would affect your employment. If you have any other concerns about entering into a DMP, we have advisors on hand to discuss these with you. As you’ve used Debt Remedy, you could give our web helpline team a call on 0800 197 1704. They’re open from Monday to Friday from 8am until 8pm and Saturdays from 9am until 2pm. It would be useful if you could have your web reference number (beginning with W) to hand when you call.

I hope this helps.

Kind regards,

Laura