Struggling with debt? Ask a debt advisor a question

dreamywings1

Hi, I have sent all my paperwork to you with regards to starting a DMP but today I have received a letter from Restons solicitors on behalf of Cabot Financial asking for full payment by Friday 18th December 2015. Please advise as to what to do.

Also this morning I have received a letter from DWP saying that they have asked for DEA from my employer at 11%. I had included DWP in my DMP but obviously this doesnt look like it has been accepted. 11% of my wages per week will wipe out the availability to pay any other debts. What do I do?

Thrugelmir

Onmyway2 wrote: »

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!

Systems used by lenders work on data alone. Not the reason behind the change. Any sudden change in your credit profile will therefore be viewed negatively ( from a lenders viewpoint a defensive measure). As time passes then your "rating" will normalise again.

Don't get hung up on "ratings" created by the CRA's.

mitch20151412

Hello,

I've got myself into about £9,000 worth of debt over the last couple of years (three credit cards and a hefty overdraft).

Enough is enough and I want to sort it out. I make the payments on time every month but just spend it again as it's so accessible.

What's my best option?

Thanks

StepChange_James

dreamywings1 wrote: »

Hi, I have sent all my paperwork to you with regards to starting a DMP but today I have received a letter from Restons solicitors on behalf of Cabot Financial asking for full payment by Friday 18th December 2015. Please advise as to what to do.

Also this morning I have received a letter from DWP saying that they have asked for DEA from my employer at 11%. I had included DWP in my DMP but obviously this doesnt look like it has been accepted. 11% of my wages per week will wipe out the availability to pay any other debts. What do I do?

Hi there,

I'd recommend you give us a call as soon as you can so we can review your situation and see how these two change affect the advice we've previously given you.

Debts being transferred to other companies is a fairly common party of the debt collection process, but if you give us the details we'll be able to work out how best to deal with them.

The DWP applying for a deduction from your wages is something we will definitely need to know about. If it goes through we'll then need to adjust your budget to show the reduced amount of income you'll have after this amount is taken.

Once we've updated your details we can take another look at your situation and work out what's the most practical way to deal with everything.

Kind regards

James

StepChange_James

mitch20151412 wrote: »

Hello,

I've got myself into about £9,000 worth of debt over the last couple of years (three credit cards and a hefty overdraft).

Enough is enough and I want to sort it out. I make the payments on time every month but just spend it again as it's so accessible.

What's my best option?

Thanks

Hi Mitch,

I think the first thing to look at is exactly what the problem is at the moment. I suspect it's one of two possible issues, but obviously don't know enough about you to be sure.

It could be that your debts are unmanageable, so you're trapped in a cycle of paying off then borrowing more. This means that you need to get some help to deal with these debts because paying them in full isn't realistic alongside your essential costs.

The alternative issue could be that you've got the money to manage the debts but it's hard to organise your money in a way that avoids getting into debt. While this might not sound as bad but can make it very hard to avoid debt.

Whatever the main issue is we can help you. If you give us a call (http://www.stepchange.org/Contactus.aspx) or us our online debt advice tool, Debt Remedy (http://www.stepchange.org/DebtRemedy.aspx) we'll help you plan a budget and provide you with an action plan to deal with the debts.

It may be that planning a budget and sticking to it will be enough to crack the problem, but it's also possible that you'll need more in-depth advice.

Kind regards

James

Mandy472

I'm a first time poster but have read these boards before. My need for help is that I can't step away from credit cards or burying my head in the sand.
My current situation is that we are applying for a larger mortgage (buying a new home and selling our existing), I'm now a stay at home mum so my partner is applying in his name. He asked me if I had any debts and I said no and he then found out that I did- £2400 on an asda card and obviously he is furious so home life at the moment is awful, all my own doing. The main bulk of this was a stupid panic decision I made in the summer. I was late paying the council tax bill and I got a court letter demanding the full amount or see us in court. This was something that couldn't happen because we were looking at properties then so I stupidly put it onto an empty credit card I had when I should have told him but I just couldn't I was so scared. Then rather than clearing it I started using it again on silly things, food shopping, petrol and stuff for the kids.
This on its own probably wouldn't be too bad but I did this before. I got myself into massive debts a few years ago (£26k) all secretly until he found out. To clear it all I took the money out of my isa account which is for our mortgage. To pay this all back I now do ironing from home and pay £300 every month into my isa.
So my question is what do I do. The debt needs repaying but if I tell the c c company they will probably put it as a default and then our mortgage will never go through. Home life will then go from bad to a whole lot worse and I'm not coping as it is.
From my ironing work I normally get between £150-£250 a week and then once a month I pay £300 to my isa from this.
Our outgoings are: £632 and I get £138 child benefit and my partner pays into the joint acc £1000 monthly
At the moment I have £380 in cash (ironing money and birthday money) and I return the Xmas presents I bought on the card and not go to a Xmas do next weekend I can manage £500. I have quite a few bags of clothes I can take to the cash for clothes which i can drop off in the week.
What else can I do? If I tell the credit card company what will happen?
At the moment my ability to think straight has gone.
Many thanks

StepChange_James

Mandy472 wrote: »

I'm a first time poster but have read these boards before. My need for help is that I can't step away from credit cards or burying my head in the sand.
My current situation is that we are applying for a larger mortgage (buying a new home and selling our existing), I'm now a stay at home mum so my partner is applying in his name. He asked me if I had any debts and I said no and he then found out that I did- £2400 on an asda card and obviously he is furious so home life at the moment is awful, all my own doing. The main bulk of this was a stupid panic decision I made in the summer. I was late paying the council tax bill and I got a court letter demanding the full amount or see us in court. This was something that couldn't happen because we were looking at properties then so I stupidly put it onto an empty credit card I had when I should have told him but I just couldn't I was so scared. Then rather than clearing it I started using it again on silly things, food shopping, petrol and stuff for the kids.
This on its own probably wouldn't be too bad but I did this before. I got myself into massive debts a few years ago (£26k) all secretly until he found out. To clear it all I took the money out of my isa account which is for our mortgage. To pay this all back I now do ironing from home and pay £300 every month into my isa.
So my question is what do I do. The debt needs repaying but if I tell the c c company they will probably put it as a default and then our mortgage will never go through. Home life will then go from bad to a whole lot worse and I'm not coping as it is.
From my ironing work I normally get between £150-£250 a week and then once a month I pay £300 to my isa from this.
Our outgoings are: £632 and I get £138 child benefit and my partner pays into the joint acc £1000 monthly
At the moment I have £380 in cash (ironing money and birthday money) and I return the Xmas presents I bought on the card and not go to a Xmas do next weekend I can manage £500. I have quite a few bags of clothes I can take to the cash for clothes which i can drop off in the week.
What else can I do? If I tell the credit card company what will happen?
At the moment my ability to think straight has gone.
Many thanks

Hi Mandy,

Thanks for posting. I can tell from your message that this situation is causing you a lot of worry. It may be that things aren't as bad as you fear once you've put together a plan to deal with the debt.


The credit card company know how much you owe them and will expect a minimum payment from you every month, this is usually slightly higher than the monthly interest applied to the account. If you're paying that minimum amount or more every month then there's no reason for the credit card company to have any issues with you owing them money. In fact, that's exactly how their businesses make money.

You would only receive a default on a credit card debt if you fell behind on payments. If that happens it's not the end of the world but it will be likely to lead to your credit history taking a bit of a knock.

It sounds like you're currently looking for ways to raise enough money to clear the debt all in one go. It's hard for me to make suggestions without knowing more about your situation. It sonuds like you've already taken steps to try and get as much money together as possible, and through the ironing you've got a regular stream of income coming in.

If you have any valuable assets or savings then you could use those to clear the debt, but I'd guess you'll have already thought about this before typing your message.

Assuming you won't be in a position to repay this debt all at once, you can then think about how you can repay it through installments.

Obviously the more you can pay the quicker you'll be able to clear it. However it's very important to not pay money to debts that you need for essential living costs.

We can help you plan a budget to work out what's affordable. You can do this online using our Debt Remedy advice tool: http://www.stepchange.org/DebtRemedy.aspx or by giving us a call: http://www.stepchange.org/Contactus.aspx. Either way it's free, confidential and impartial.

Kind regards

James

[Deleted User]

Im hoping for some advice. Im currently on a DMP, paying £80 month towards approx 29k of unsecured debt.

Around 12 months ago I was dismissed from my Job on the grounds of ill health, due to serious mental health issues.

I have now managed to find a new job, and am currently working but at a salary of around 45% of what I used to earn.

I was managing my DMP fairly well, but my circumstances are changing. I have moved into a new privately rented home, and have gone from being the sole carer of my 9 year old daughter to agreeing a joint custody arrangement with her mother. This has also meant I am no longer classed as the main carer so no longer receive any child related benifits.

Now, as part of my dismissal for ill health I was awarded some compensation by my ex employer. This was in total 22k, after spending several months on nil pay I racked up some arrears and debt with friends and family. I used some of this compensation to clear that debt. I also needed to pay the deposit on my home and buy some essentials.

The long and short of it is I am now left with 12k from my compensation but a reduction in my income and an increase in my out goings mean I no longer have a surplus in my budget to pay the DMP, the only way to make the DMP payments is spend less on shopping, fuel etc than my budget allows or to dip into the 12k monthly. I really don't want to do this as I will have no opportunity to ever save this amount again, due to the nature of my mental illness my previous career is now off limits to me.

I ran my figures through the step change debt remedy tool and it suggested that a single payment IVA may be a soloution?

I was wondering if from the information I've supllied anyone thinks that may be a viable option, or has any advice on another way to proceed?

I'm not concerned about my credit rating, it's already trashed, im single, have no assets other than the 12k and a beat up old car. I have no financial affiliations with other people as my new occupation wouldn't be impacted by insolvency. Meaning I'm happy to consider all options including bankrupcy.

Kind regards.

Branston

StepChange_Jen

Branston_the_pickled. wrote: »

Im hoping for some advice. Im currently on a DMP, paying £80 month towards approx 29k of unsecured debt.

Around 12 months ago I was dismissed from my Job on the grounds of ill health, due to serious mental health issues.

I have now managed to find a new job, and am currently working but at a salary of around 45% of what I used to earn.

I was managing my DMP fairly well, but my circumstances are changing. I have moved into a new privately rented home, and have gone from being the sole carer of my 9 year old daughter to agreeing a joint custody arrangement with her mother. This has also meant I am no longer classed as the main carer so no longer receive any child related benifits.

Now, as part of my dismissal for ill health I was awarded some compensation by my ex employer. This was in total 22k, after spending several months on nil pay I racked up some arrears and debt with friends and family. I used some of this compensation to clear that debt. I also needed to pay the deposit on my home and buy some essentials.

The long and short of it is I am now left with 12k from my compensation but a reduction in my income and an increase in my out goings mean I no longer have a surplus in my budget to pay the DMP, the only way to make the DMP payments is spend less on shopping, fuel etc than my budget allows or to dip into the 12k monthly. I really don't want to do this as I will have no opportunity to ever save this amount again, due to the nature of my mental illness my previous career is now off limits to me.

I ran my figures through the step change debt remedy tool and it suggested that a single payment IVA may be a soloution?

I was wondering if from the information I've supllied anyone thinks that may be a viable option, or has any advice on another way to proceed?

I'm not concerned about my credit rating, it's already trashed, im single, have no assets other than the 12k and a beat up old car. I have no financial affiliations with other people as my new occupation wouldn't be impacted by insolvency. Meaning I'm happy to consider all options including bankrupcy.

Kind regards.

Branston

Hi Branston,

Thanks for getting in touch.

I’m sorry to hear you’ve been struggling with mental health issues however it’s good to hear you’ve managed to find a new job.

Without knowing about your full situation it’d be hard to offer specific advice about what solution is best suited to you.

I’d suggest you give our team a call so you can have a chat with one of our advisors about your situation.

If you’re already on a DMP with us, you can reach our support team on this number: 0300 303 5300.

If you don’t already have a plan with us, I’d suggest you get in touch with our Helpline so you can talk through your current situation with an advisor. You can find out how to get in touch with our Helpline here: http://www.stepchange.org/Contactus.aspx

Our advisors will be happy to chat through your options with you and can let you know the next steps to take.

I hope this helps,

Jen

CRobinson

Hello, I currently have just over £5k debt with DFH on a management plan. Would it be possible to transfer this to another company as they are taking a very high fee!

Many thanks
Char