Struggling with debt? Ask a debt advisor a question

Former_StepChange_Rachel

tiredwithtwins wrote: »

Hi,
wondered if I could get some advice please?
after years and years of bad money management I have been getting myself straight financially. My credit score has been good and I haven't had any problems getting any credit for the past few years. I split from my ex a few years ago and he doesn't pay any child support for our 3 teenagers but has them to stop 2 nights a week. I recently changed jobs due to a change in my work contract (I was a sister in the NHS) and a wage dispute so my income has been quite minimal over the past few months leading me to use my Halifax overdraft facitlity (always within the limit and regular payments still going in). I also have 2 credit cards that are pretty much maxed out, and a 10k loan (with the Halifax that I used to buy a car and household items).
before my salary problems/job change I used this excellent site to look at changing bank accounts and applied to switch to first direct. As the switch date approached I realised I was going to struggle to pay off the Halifax overdraft in full so put a hold on the transfer.
the thing is, I completely forgot the date (deferred switch date 30th nov) and was only reminded when I went into my online Halifax account on monday and my account wasn't there! I phoned first direct who were very sympathetic but they said the switch had happened and couldn't be stopped. likewise the Halifax said it was too late.
when I phoned the Halifax, they said I couldn't make any kind of repayment plan on the now-closed overdrawn account until it had been passed to the collections department (which happens if the balance is not cleared within about 30 days) - I cant pay the £1500 overdraft in the next 30 days so this will obviously have a huge impact on my credit score as it will go to the collections dept.
at the age of 48 I was hoping to get most of my debt cleared in the next 12 months (I now work 3 jobs to try and boost my income) with a view to saving for another year to be able to get a deposit together to buy a house (im currently renting and its draining the life out of me).
can anyone advise me on what to do next? I seriously need to avoid a bad credit rating as it will effectively end any plan I have of buying a house, but at this precise moment in time I cant find £1500 to pay off the balance ... am I pretty much doomed?
thank you

Hi there, thanks for posting.

I’m sorry to hear you’ve been struggling since the split from your partner and as a result of the pay dispute you mentioned. Many people find themselves struggling when dealing with life changes like this, and it can easily lead to relying on credit from time to time to get by.

We wouldn’t usually recommend consolidating your debts or taking out further credit in order to clear the balances you mentioned. Sometimes if you use credit to pay off something like a credit card of overdraft, there can be the temptation to use that facility again. This can often make a sough debt situation even more difficult to deal with.

I can appreciate that you would like to protect your credit rating as much as possible. Any notes left on your credit file due to defaults and missed payments do eventually drop off your credit file after a period of six years. What’s more, if you make reduced payments on your debts, this is still acknowledged on your credit file which will improve over time as a result. You can read more about debt advice and possible concerns about credit ratings on our blog: http://moneyaware.co.uk/2011/06/i-don%E2%80%99t-want-my-credit-rating-to-be-affected/

It sounds like you would benefit from getting in touch with us and getting some free and confidential debt advice on your situation. We can take a look at your budget and any debt solutions that may be beneficial for you. We do this by taking a look at your budget and figuring out what you have left over once all your most important living costs and household bills are paid.

Our online advice tool Debt Remedy can help you put together a personal action plan in around 20 minutes: http://www.stepchange.org/Debtremedy.aspx

Alternatively, you can call our Helpline on 0800 138 1111. We’re open Mon – Fri 8am to 8pm and Sat 8am to 4pm, and our Helpline number is free from landlines and mobiles.

Kind regards

Rachel

Former_StepChange_Rachel

mdunbar91 wrote: »

Hi there,

I am 24 and completed university 2 years ago. I have just started getting charged for my student overdraft through Bank of Scotland - £1 a day. I am currently working/traveling overseas and haven't got the money to pay it off, although i should by early next year. Is there a better option other than just gritting my teeth and paying the extra every month?! Its currently sitting at £700..

Thank you for your help!

Hi there, thanks for posting.

It’s quite common for student overdrafts to become a problem long after you’ve graduated, and the daily charges can be a real source of frustration.

From what you’ve told us, it may be a good idea to put your budget together via our online advice tool Debt Remedy. It takes around 20 minutes and we’ll also be able to tell you of any long term debt solutions that may be suitable for you so you’re fully aware of all your options. You can then show your budget to the bank to give them an idea of what you can afford to pay towards clearing the overdraft at the moment.

Please be aware that if you come to an informal arrangement with your bank to pay the overdraft off in instalments, they’re not obliged to stop the charges on the account. They may however eventually pass the debt to a collection agency, at which point the daily charges on the debt are likely to stop.

You can access Debt Remedy here: http://www.stepchange.org/Debtremedy.aspx

Alternatively, you can speak to one of our advisors about your overdraft and work through a budget over the telephone. Find out more about getting free debt advice from outside the UK here: http://www.stepchange.org/LivingoutsidetheUK.aspx

Kind regards

Rachel

Former_StepChange_Rachel

beckiscoffs wrote: »

Hello,
I have a few old debts that have b been bought by lowell. Some of these debts uave quadrupled since i first had them, presumably from lates fees etc. Do i have to pay all thos extra money or can i just pay what was originally owed to my creditors? Thanks

Hi Becky, thanks for getting in touch.

Usually, you would be liable for any late charges that were added to these debts before they were passed to a collection agency such as Lowell. You can always ask for a breakdown of the balance if you feel that it’s an excessive amount. You can then query any amounts that seem unfair or unreasonable.

Please know that if you need free debt advice, we can help. Our online advice tool Debt Remedy can help you put together a personal action plan in around 20 minutes: http://www.stepchange.org/debtremedy.aspx

Kind regards

Rachel

Former_StepChange_Rachel

Onmyway2 wrote: »

Hello,
After quite a few years trying to pay off as much as I can off my debts I have now changed tactic and am paying the minimum in order to save enough money to sell my house, pay off the debts and start over.
As I will have to move into rented accommodation for a few years (at least) I decided to do all I could do improve my credit rating ready for any checks they run.
I lowered my Argos (due to be closed in Jan 2016) & Next cards then phone CC1. They agreed to lower my limit by £3k but claimed it may negatively impact my credit score. Is this true? I was about to reduce CC2 by £4k but now I'm unsure of what to do.
I don't want to sell my house and then find no-one will rent to me as I have 2 kids and am way past sofa-surfing age.


Thanks in advance....

Hi there Onmyway2, thanks for posting.

I’m sorry to hear things have been difficult recently. It sounds like you’ve had to make some tough choices in regards to the debts you’ve mentioned.

The problem with paying the minimum on debts such as credit cards is that it could cost you more in the long run with the interest that’s added. Credit cards in particular can be a problem in this regard.

When it comes to the creditor you mentioned that offered to lower the limit to £3k, am I right in thinking that they’re offering you a figure to settle the debt? When a creditor offers to settle the debt on a lower amount than the original balance, this would be recorded on your credit file as ‘partially settled’. If you were hoping to settle the balances on all of your debts, we would recommend that you try to do this as fairly and equally as possible by settling based on what you owe to each creditor. We have a settlements team who can talk you through this after you’ve completed a debt advice session with us.

I feel you would definitely benefit from speaking to us in a bit more detail about your situation. Our advisors can go through your budget with you and give you some long term debt advice and options on what you can do moving forward. Our Helpline number is 0800 138 1111 and we’re open Mon – Fri 8am to 8pm and Sat 8am to 4pm.

Alternatively, our online tool Debt Remedy can help you build a personal action plan in around 20 minutes: http://www.stepchange.org/debtremedy.aspx

Kind regards

Rachel

Onmyway2

StepChange_Rachel wrote: »

Hi there Onmyway2, thanks for posting.

I’m sorry to hear things have been difficult recently. It sounds like you’ve had to make some tough choices in regards to the debts you’ve mentioned.

The problem with paying the minimum on debts such as credit cards is that it could cost you more in the long run with the interest that’s added. Credit cards in particular can be a problem in this regard.

When it comes to the creditor you mentioned that offered to lower the limit to £3k, am I right in thinking that they’re offering you a figure to settle the debt? When a creditor offers to settle the debt on a lower amount than the original balance, this would be recorded on your credit file as ‘partially settled’. If you were hoping to settle the balances on all of your debts, we would recommend that you try to do this as fairly and equally as possible by settling based on what you owe to each creditor. We have a settlements team who can talk you through this after you’ve completed a debt advice session with us.

I feel you would definitely benefit from speaking to us in a bit more detail about your situation. Our advisors can go through your budget with you and give you some long term debt advice and options on what you can do moving forward. Our Helpline number is 0800 138 1111 and we’re open Mon – Fri 8am to 8pm and Sat 8am to 4pm.

Alternatively, our online tool Debt Remedy can help you build a personal action plan in around 20 minutes: http://www.stepchange.org/debtremedy.aspx

Kind regards

Rachel

I think you are missing the question. Sorry if I wasn't clear - I asked to lower my credit limit so that when I apply to rent I won't have higher amounts of credit available to me but the chap said it may negatively effect my credit rating - is this true or is it a sales tactic?
I am only paying minimum for 6 months so I can sell my house and pay off all debts in one go with profits. I have been paying more for quite a while and nowhere near clear yet.

Former_StepChange_Rachel

Onmyway2 wrote: »

I think you are missing the question. Sorry if I wasn't clear - I asked to lower my credit limit so that when I apply to rent I won't have higher amounts of credit available to me but the chap said it may negatively effect my credit rating - is this true or is it a sales tactic?
I am only paying minimum for 6 months so I can sell my house and pay off all debts in one go with profits. I have been paying more for quite a while and nowhere near clear yet.

Hi Onmyway2, thanks for getting back to me.

I'm sorry I misunderstood your original question there. I must admit that this is a bit of an unusual scenario and not something we could advise on much further. Our expertise is centered more around looking at affordable ways to pay back the debt that you owe.

With a concern like this, it may be best speaking to one of the three credit reference agencies - Experian, Equifax or Call Credit. If you are in need of budgeting or debt advice however, we're more than happy to help you.

Kind regards

Rachel

nursebear83

Hello, I've been a mature student for the last 6 years and have accumulated a lot of debt along the way. I am really struggling to sort it all out at the moment. My partner also has debts and on top of it all I have bi polar disorder which hasn't helped. I am waiting to start my first job in a long time and really want to try and get on top of all the debt and make a fresh start. Thing is I don't really know where to start and if there is anyone who can help?

Many thanks

J

Onmyway2

StepChange_Rachel wrote: »

Hi Onmyway2, thanks for getting back to me.

I'm sorry I misunderstood your original question there. I must admit that this is a bit of an unusual scenario and not something we could advise on much further. Our expertise is centered more around looking at affordable ways to pay back the debt that you owe.

With a concern like this, it may be best speaking to one of the three credit reference agencies - Experian, Equifax or Call Credit. If you are in need of budgeting or debt advice however, we're more than happy to help you.

Kind regards

Rachel

Thanks for the advice. Apparently it will hurt my credit score, which is unfortunate as I have already lowered 3/4 cards. I was told the optimum amount of debt to have as far as your credit score goes is 25% of your available credit & I just changed mine to about 70% (doh!). Looks like I won't be closing my store cards in January after all as this would increase m % further!

StepChange_Jen

nursebear83 wrote: »

Hello, I've been a mature student for the last 6 years and have accumulated a lot of debt along the way. I am really struggling to sort it all out at the moment. My partner also has debts and on top of it all I have bi polar disorder which hasn't helped. I am waiting to start my first job in a long time and really want to try and get on top of all the debt and make a fresh start. Thing is I don't really know where to start and if there is anyone who can help?

Many thanks

J

Hi there,

Thanks for posting.

I’m sorry to hear you’re struggling, dealing with debt can be very stressful but you don’t have to deal with it alone. We’re here to help.

You mentioned that you have mental health issues at the moment. Debt and mental health issues are often linked and if you haven’t
already, I’d suggest getting in touch with your GP for some support. If you’d like to read more about debt and mental health,
there’s a page on our website about it here:

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

It’s good to hear that you want to take the steps to deal with your debt. From what you’ve said, it sounds like you’d benefit from some free debt advice and as a charity this is something we can offer. We’d be happy to take a look at your situation and discuss any possible debt solutions with you.

There are two ways you can get help from us. You can give our Helpline a call and talk through everything with one of our advisors. They’ll ask you for information about your income, budget and debts. They’ll then use this to let you know about any debt solutions suited to your situation and what your next steps should be. You can find out how to get in touch with us here: http://www.stepchange.org/Contactus.aspx

Alternatively, you can use our free, online Debt Remedy tool. It works in the same way as our Helpline, except instead of talking with an advisor you just need to enter your information online. You can find Debt Remedy here: www.stepchange.org/debt-remedy

I hope this has helped but if you have any more questions, please let us know.

Kind regards,

Jen

StepChange_Jen

nana2four wrote: »

Hi we are on a DMP with stepchange and we are due our yearly review , but our circumstances are going to change we have sold our home and we will have about 50k equity ,we will be private renting. We wont be able to claim any help with housing costs as we will have the equity , we could pay alot of the debt off with the money, but as we are on a reduced income at the moment i dont feel that will be a good idea ,my plan is to move stay with the DMP and focus on improving our income.The issue is that the rent is higher than our mortgage so on paper we wont be able to afford the DMP and im scared they will take us off it all our debts are unsecured they are 3 cc and 3 bank loans all ours.So my question is do we have to do a review if i ignore it will they stop the DMP ?

Hi there,

Thanks for posting.

The best thing to do here would be to get in touch with our client support team to let them know about your change in circumstances. One of our advisors will be happy to chat through your
situation with you and can advise what they believe is the best way for you to move forward.

It’s important to keep us updated with your current situation, so we can make sure that the debt solution you’re on is still the most suitable one for you.

You can contact our client support team on this number: 0300 303 5300.

I hope this helps,

Jen