Struggling with debt? Ask a debt advisor a question

KB2

Hi, I have a query about my present situation, and I hope you can offer some advice. I had bank accounts with Lloyds TSB & Halifax when I first turned 18, with minimal overdrafts of £100 & £150.
I was using these overdrafts when the changes to their charges were implemented, and I was not happy with these new fees, so I made arrangements to repay the overdrafts monthly. However, the interest & charges continued to mount, until Lloyds reached £916 and Halifax reached £1100. I did visit the bank managers at the time, who said there was nothing they could do as the accounts were with collections by this point. Being an 18 year old and not money wise, I have kept no record of these visits or the arrangements made.
These accounts were passed onto no less than 16 different debt collection agencies, whom I have written to disputing the amounts, showing a willingness to repay the original overdraft amounts, but this has not been accepted. Obviously these are having an adverse affect on my otherwise good credit file. It will be approaching the six year mark at the end of this year and I have received letters from the debt collectors offering me a reduced repayment sum to pay in small monthly instalments. Is it worth accepting this to clear the debt, despite the fact that I still dispute it, just to eventually clear my credit file, or will it be wiped when the six year mark hits anyway?

Many thanks

Former_StepChange_Rachel

Puddle78 wrote: »

Hi,

After my partner tried to set up a business which then failed we were left with multiple debts (personal loan, credit cards, my student loans). We went to the CAB who wrote to the creditors asking if we could replay £1 a month to each (I appreciate this is a short term solution). They all agreed to this but my partner has found a good job since then and we have been busily saving up so we could repay some debts. We are in a position where we could repay my portion of the debts and I wondered if we could do that now or if it would be best to wait until our agreement period ends? When we first went to see the debt advisor they mentioned not treating any creditor preferentially as then the others could demand replayment too. I'm unsure what is the best course of action. Can you advise me please? Thankyou!

Hi there, thanks for getting in touch.

If your situation has improved then we would always recommend that you review your budget and look at what you can fairly afford to offer to your creditors. We can go through your budget with you and look at what your options are. To speak to our Helpline, call 0800 138 1111 (free from landlines and mobiles) open 8am to 8pm Monday to Friday and sat 8am to 4pm. Alternatively you can use our anonymous advice tool Debt Remedy and put together a personal action plan online: http://www.stepchange.org/debtremedy.aspx

If you review your budget with one of our advisors, they can look into whether it would be a good idea for you to speak to our Settlements team. They can investigate if it’s possible for you to fairly settle on all of the debts you’re dealing with. We do have a settlements team here who can look into this for you. More information can be found on our website: http://www.stepchange.org/Debtinformationandadvice/Debtsolutions/Settlementoffers.aspx


Kind regards

Rachel

Former_StepChange_Rory

jamiejackstone wrote: »

Hi there,
Im looking for a bit of advice...
I have a terrible credit rating after missing payments on credit cards and loans and recently set up a debt management plan with Step Change (which is a big help!)

I live with my wife and child and our mortgage is entriely in her name, although i pay half of all the payments.

We recently had our house valued, and we have a good amount of equity in the house and wanted to look into releasing some of it by remortgaging so that we could pay off debts.

The problem we have is that even though we would do this entirely in my wifes name, when she spoke to the bank they wouldnt even consider the application because My credit rating was linked to the address.

Im wondering if anyone can advise on how we might be able to overcome this problem (Preferably without requiring her to divorce me or me living on the street!)

I guess we could sell the house and then pay off debts and relocate, but we are concerned we wouldnt be able to get a mortgage again because of my bad credit rating.

Any advice would be appreciated
Many thanks
Jamie

Hi Jamie,

It’s a common myth that your credit file is specifically linked to anyone else living the same address; it’s the financial link between you and your partner such as a joint bank account, mortgage or even joint bills that can cause this.

If you already have joint debts then this could be the reason why you’re having some difficulties with the mortgage.

Mortgages are a complicated product with lots of different things to consider, but thankfully we have a Financial Solutions team who are on-hand to offer free, impartial advice on mortgages.

They deal with people in similar situations to you, and as we’ve already got information on your situation it should make things more straightforward when we talk to you. You can book an appointment with them and find out more by visiting http://www.stepchange.org/Howwecanhelpyou/Mortgagesandequityrelease/Mortgages.aspx.

Hope this helps,

Rory

Former_StepChange_Rachel

KB2 wrote: »

Hi, I have a query about my present situation, and I hope you can offer some advice. I had bank accounts with Lloyds TSB & Halifax when I first turned 18, with minimal overdrafts of £100 & £150.
I was using these overdrafts when the changes to their charges were implemented, and I was not happy with these new fees, so I made arrangements to repay the overdrafts monthly. However, the interest & charges continued to mount, until Lloyds reached £916 and Halifax reached £1100. I did visit the bank managers at the time, who said there was nothing they could do as the accounts were with collections by this point. Being an 18 year old and not money wise, I have kept no record of these visits or the arrangements made.
These accounts were passed onto no less than 16 different debt collection agencies, whom I have written to disputing the amounts, showing a willingness to repay the original overdraft amounts, but this has not been accepted. Obviously these are having an adverse affect on my otherwise good credit file. It will be approaching the six year mark at the end of this year and I have received letters from the debt collectors offering me a reduced repayment sum to pay in small monthly instalments. Is it worth accepting this to clear the debt, despite the fact that I still dispute it, just to eventually clear my credit file, or will it be wiped when the six year mark hits anyway?

Many thanks

Hi there, thanks for getting in touch.

The six year period you’re referring to – The Limitation Act – refers to situations where a creditor has had a period of six years to contact and establish a payment with you on a particular debt. If they fail to do contact you within the 6 year timeframe, the debt becomes what’s known as ‘statute barred’. This means that the creditor cannot pursue county court enforcement after the six years has passed, as the debt wouldn’t be enforceable. The debt isn’t ‘written off’ and may still remain on your credit file, it just wouldn’t be pursued through the court.

In this circumstance, the Limitation Act would not likely apply because you’ve been in correspondence with the creditor and collection agencies involved. The debt may also still be escalated to county court, and the Limitation Act would not apply in this instance.

If you’ve made a formal, written complaint to the bank already regarding these charges (proof of postage is recommended) and the matter’s still not resolved, it would then be a good idea to get in touch with the Financial Ombudsman and see if they can look into this dispute for you: http://www.financial-ombudsman.org.uk/

If it turns out that you do need to deal with this debt and look at repayment options, we can help you put together a budget to make sure your living expenses are covered first. We can also look at possible debt solutions for you. Visit our website to find out more: http://www.stepchange.org/Howwecanhelpyou/Debtadvice.aspx

Kind regards

Rachel

catherinelirian

If you need help with your debts, this is the thread for you.
goo.gl/7VaRPh

Ultimatechezz

Hi all,

I have 2 loans (one for car) and a credit card worth £30,0000 and my wife has £16,000 on credit cards and £2500 left to pay on her car.

We recently moved house from one we owned to a rented as it was for my wifes new job (Manchester to cumbria)

Anyway, we have £25,000 from the sale of our house. I want to use it to clear my debt and then I will help to pay off wifes debt giving her what I am paying per month (£550), however she doesn't want to as this is a deposit for this house we are renting and want to buy.

It will take me 5 years to clear my loans/credit card or maybe quicker if I can over pay. I don't think we could get a mortgage with the state of our finances at the moment anyway...not sure if my idea is the best but it could see all our debts gone with 2.5 years if done correctly...then we can save up the money spent from savings?

Not sure how to move forward?

MrMolehusband

I'll try to be brief with this.

My wife and I are in serious bother with debt. We owe over 40k - a couple of cards, a catalogue account, and a couple of loans. Our monthly outgoings on debt alone are in the region of £1200.

Our home has no equity, and is worth approx 105k. We have no means to rent out a room as it only has two bedrooms and we have two children.

We actually pay all our debt outgoings each month, however this leaves us incredibly short for food/petrol. We need a car for ferrying my eldest to school (9m away) and my youngest to her grandparents.

My wife and I both work, with a joint income of, perversely, the sum total of our debt. So roughly 42k.

Here's our huge problem. The majority of the debt we have, is actually in my wife's name. This wasn't a conscious thing we decided, it just so happened that's how the applications worked. The problem is compounded by the fact that my wife works in the legal profession - so she can't sign up to any Debt Management Plan, as she would lose her career.

We are at the point now where we are at a loss as to what to do now. It might sound twee, but it feels like we haven't smiled for God knows how long. Our patience is wearing thin, with each other and our kids.

Any advice or help would be gratefully received.

runforlife

It can be done Mr Mole. There is a solution to every debt problem. A DMP does not necessarily mean that your wife would lose her job. It's not the same as an IVA for instance. Contact Stepchange for impartial advice.

You can go on their website and complete the debt remedy tool which is completely anonymous and without obligation. Though you'll find them extremely helpful when you talk to them. My situation by the way was a further 10K on your debt and a similar joint income. Good luck.

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

Former_StepChange_Laura

Ultimatechezz wrote: »

Hi all,

I have 2 loans (one for car) and a credit card worth £30,0000 and my wife has £16,000 on credit cards and £2500 left to pay on her car.

We recently moved house from one we owned to a rented as it was for my wifes new job (Manchester to cumbria)

Anyway, we have £25,000 from the sale of our house. I want to use it to clear my debt and then I will help to pay off wifes debt giving her what I am paying per month (£550), however she doesn't want to as this is a deposit for this house we are renting and want to buy.

It will take me 5 years to clear my loans/credit card or maybe quicker if I can over pay. I don't think we could get a mortgage with the state of our finances at the moment anyway...not sure if my idea is the best but it could see all our debts gone with 2.5 years if done correctly...then we can save up the money spent from savings?

Not sure how to move forward?

Hi there,

Thanks for your message. It seems as though the issue you’re faced with is whether to pay off the debts now and delay getting back on the property ladder, or get back on the property ladder sooner but face the prospect of being in debt for longer. That’s not an easy choice to face, but we can help you to weigh up your options.

From what you’ve told me about your situation, I think you would benefit from some free debt advice. I’d suggest you give us a call and have a chat with one of our debt advisors. They’ll be able to discuss your financial details in more depth, put together a budget and recommend the best way for you to deal with your debt. We offer a range of debt solutions, and can advise you on whether it’s in your best interests to make a settlement offer with the money from the sale of your house.

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

Kind regards,
Laura

BatGirlPants

On the online debt remedy - when you put in a loan debt what do you put? The original amount minus what has been paid? What about interest? I have no way of knowing exactly was is 'outstanding'. I think a DMP is the result whatever i put. The loan is about 7 months old and was 15k with 20% ish interest over 5 years (£381 a month). Thanks