Struggling with debt? Ask a debt advisor a question

Former_StepChange_Rachel

sarahsausage wrote: »

Hi i am trying to get debt free but have a 3,000 overdraft with lloyds tsb. i cant seem to be able to lower the overdraft and lloyds dont ssem to be helping (apart from charges charges charges) they offered me a 5 year loan to pay it off which would result in me paying almost 6,000!! the only solution i can thing would be to clos my account and drip feed the overdraft off...or could i get a 0% card for 20 months and balance transfer the overdraft and pay it off within the 20 months...can i do that? or is there anything else i can do? i am not happy with the bank as i have always banked with them have insurances with them and now i feel like they wont help me many thanks for your help in advance x

Hi there, sarah sausage

The problems you’re experiencing are very common and there is something you can do to start paying the debt off in a way that’s realistic.

I would recommend that you consider getting yourself a basic bank account with a bank that isn’t connected to Lloyds in any way (Halifax and Bank of Scotland are part of the same banking group, so you wouldn’t get an account with them).

I advise this because Lloyds (and every bank in the UK, for that matter) have what we call the Right of Offset. This means that not only can they continue to charge you penalties on this account, they can reduce the overdraft or take it away altogether. They don’t have to warn you prior to this (although most banks do as a courtesy).

If you get your money moved away, you are in control of your finances and don’t have to worry about your money being seized without warning.

It might not be a good idea to take out further credit to clear this overdraft. There are risks involved when doing this so we generally advise against it.

I suggest you get in touch as soon as you can. We are a free and confidential debt advice charity. We help thousands of people like yourself who need advice and support moving forward. We can look at what you’re best doing long term and we don’t charge any kind of fee for our advice.

If you’d like to find your best solution in just 20 minutes you can try our free advice tool Debt Remedy: http://www.stepchange.org/msehelp.

Alternatively, you can call our Helpline and chat to one of our advisors on 0800 138 1111

Best regards,

Rachel

huntert

Hi guys,
A bit of advice would be apritiated on this one so here goes. I was in about 60k of debt a while ago with credit cards and loans..a company then contacted me and told me i might not have to repay them due to gov legislation..i gave them my details and they investigated and then informed me i wouldnt be required to pay these debts...i stopped paying and went into default ect put up with the year or so of harrassment only for the company to then tell me i had missed the cut of date and would have to pay!!!!
My credit in tatters and a 6 month work lay off left me devistated and on the brink, mortage far behind and no income.
Well eventually i got back to work and have got my mortage up to date and 30K paid back via settlement agreements.
Now the thing is, for the moment i have a really well paying job and have managed to bank a bit of money.
The 30k i owe is to halifax and bos, (two loans one credit card)who have blair oliver and scott as representives...and they are so hard to deal with regarding a settlement figure (settlement figure per each 10k debt not the whole 30k)...i have not told them about my new position and currently pay them about £70 a month.
My delema is should i pay a lump sum of my mortage or pay towards these debts? if i could get a reasonable settlement figure i would but i dont see any advantage if i dont...advice please.............

Former_StepChange_Rachel

rwp150 wrote: »

Hi, I am new the forums and have been reading with interest as lots of useful advise and tips.

I have decided that 2013 is the year to face up to my debts, my wife and I have approx £30k of debt, which we were coping with, but we have now maxed all of our credit cards and overdrafts and are really struggeling with basic living costs.

I have been looking into why this has happended, and the main reason is we used to get 0% credit cards and move around the debts, but then the credit crunch and no one would give us a 0% deal, the interest rate on all of our cards have then crept up, the worst bing barclaycard which went up from 9.9% (after into offer) to 24.9% within a year! The minimum payment is £120 and interest is £100 a month and we just can't afford to pay it off.

We also have a HSBC overdraft which is constantly at it's limit (£4k), I am really concerned that HSBC will see tha we are struggeling and then pull the overdraft after I get paid which would really mess us up and I need to ensure I can keep food on the table for the kids and the car on the raod so I can work.

I have thought about moving my salary to another bank account and then just leaving the HSBC overdraft and slowly paying it off, the problem I have with that is the interest on the overdraft is currently £60 a month but this is with money going in it so the interest will go up which will just make things worse!!

Anyone have any ideas? Do you think HSBC would pull the overdraft? At the moment we haven't defaulted on anything.

Many thanks for your help

Hi there, rwp150

I’m glad to hear that you’re ready to face up to your debts this year. Please know you don’t need to do this alone. We are a debt advice charity and we help many people who like you have decided this is the year they put an end to their debt worries for good.

The balance transferring is something we come across a lot, and once that’s no longer an option the interest can rocket upwards.

You’re right to be concerned about the overdraft. As I’ve mentioned in a previous post, the bank does reserve the right to withdraw the facility if they feel that you can no longer afford the overdraft.

I would certainly consider banking somewhere else. This way you are protecting your income and can start thinking about payments on your debts that you can actually afford. Please make sure that you go with someone who is not linked to HSBC, Barclaycard or anyone else you owe money to (any bank staff should be able to tell you who they’re affiliated with if you ask them).

For your long term options, I strongly suggest you get in touch with us. We’ll have a look at your budget and figure out what is the fairest, most realistic way to deal with these debts.

You can use our anonymous online advice tool Debt Remedy: (http://www.stepchange.org/msehelp)

Or if you’d prefer a chat with an advisor, you can do so by calling our Helpline on 0800 138 1111

rwp150

StepChange_Rachel wrote: »

Hi there, rwp150

I’m glad to hear that you’re ready to face up to your debts this year. Please know you don’t need to do this alone. We are a debt advice charity and we help many people who like you have decided this is the year they put an end to their debt worries for good.

The balance transferring is something we come across a lot, and once that’s no longer an option the interest can rocket upwards.

You’re right to be concerned about the overdraft. As I’ve mentioned in a previous post, the bank does reserve the right to withdraw the facility if they feel that you can no longer afford the overdraft.

I would certainly consider banking somewhere else. This way you are protecting your income and can start thinking about payments on your debts that you can actually afford. Please make sure that you go with someone who is not linked to HSBC, Barclaycard or anyone else you owe money to (any bank staff should be able to tell you who they’re affiliated with if you ask them).

For your long term options, I strongly suggest you get in touch with us. We’ll have a look at your budget and figure out what is the fairest, most realistic way to deal with these debts.

Or if you’d prefer a chat with an advisor, you can do so by calling our Helpline on 0800 138 1111

Thank for getting back to me Rachel, one quick question about setting up a new bank account, I already have one with the Co-Op which was opened when I set my mortage up with them, I don't have any other debt with Co-Op other than the mortage and they are not linked to any other banks that I deal with so I assume it should be ok to transfer to them? Many thanks

slave_to_debt

Hi I have debt of around £16000 consisting of a benefit over payment which I have tried to contact and come up with a solution that I can afford but to no avail the amount they want leaves me with not enough money to pay everything, and two credit cards which up to now I have never missed a payment. I have been advised by two different companies to take out either a IVA or a DMP the problem is the debt is mine and I don't want to drag my partner down with me, we have a mortgage together and I have been given conflicting advice one says an IVA will mean the house will be in jeopardy and the DMP the people I owe the debt to can ask for me to be made bankrupt and we will lose the house any way I am now so worried and confused all I want is a way to pay this debt without losing everything. Please could you give me some advice on which I should take as I have a deadline the over payment has to be paid by the 27/01/2013

StepChange_James

huntert wrote: »

Hi guys,
A bit of advice would be apritiated on this one so here goes. I was in about 60k of debt a while ago with credit cards and loans..a company then contacted me and told me i might not have to repay them due to gov legislation..i gave them my details and they investigated and then informed me i wouldnt be required to pay these debts...i stopped paying and went into default ect put up with the year or so of harrassment only for the company to then tell me i had missed the cut of date and would have to pay!!!!
My credit in tatters and a 6 month work lay off left me devistated and on the brink, mortage far behind and no income.
Well eventually i got back to work and have got my mortage up to date and 30K paid back via settlement agreements.
Now the thing is, for the moment i have a really well paying job and have managed to bank a bit of money.
The 30k i owe is to halifax and bos, (two loans one credit card)who have blair oliver and scott as representives...and they are so hard to deal with regarding a settlement figure (settlement figure per each 10k debt not the whole 30k)...i have not told them about my new position and currently pay them about £70 a month.
My delema is should i pay a lump sum of my mortage or pay towards these debts? if i could get a reasonable settlement figure i would but i dont see any advantage if i dont...advice please.............

Hello,

Thanks for posting. It's a difficult decision and I suppose personal choice comes into it too.

It's worth giving serious thought to getting rid of the unsecured debts, as it sounds like they've been hanging around for a while and it would be good to have them out of your hair.

On the other hand, if you can afford to increase your installments from £70 to something that would clear the debts in a reasonably short amount of time then that could be an alternative and it would mean you could pay your mortgage down.

I'm sure you're aware that companies don't have to negotiate settlements, but many will consider a reduced offer if you pay them a lump sum.

It's a nice problem to have I suppose, if I was in this situation I think I'd lean towards paying off unsecured debts.

Hope this helps.

James

StepChange_James

rwp150 wrote: »

Thank for getting back to me Rachel, one quick question about setting up a new bank account, I already have one with the Co-Op which was opened when I set my mortage up with them, I don't have any other debt with Co-Op other than the mortage and they are not linked to any other banks that I deal with so I assume it should be ok to transfer to them? Many thanks

That Co-op account sounds fine. The mortgage is a priority bill that should be paid in full every month, so there's no issue with that being linked to your bank account.

All the best.

James

StepChange_James

slave_to_debt wrote: »

Hi I have debt of around £16000 consisting of a benefit over payment which I have tried to contact and come up with a solution that I can afford but to no avail the amount they want leaves me with not enough money to pay everything, and two credit cards which up to now I have never missed a payment. I have been advised by two different companies to take out either a IVA or a DMP the problem is the debt is mine and I don't want to drag my partner down with me, we have a mortgage together and I have been given conflicting advice one says an IVA will mean the house will be in jeopardy and the DMP the people I owe the debt to can ask for me to be made bankrupt and we will lose the house any way I am now so worried and confused all I want is a way to pay this debt without losing everything. Please could you give me some advice on which I should take as I have a deadline the over payment has to be paid by the 27/01/2013

Hi and welcome to the forum.

It's possible to be made bankrupt by a company you have unsecured debts to, but in practice it's incredibly rare.

DMPs and IVAs are both potentially good options for you, it just depends on your circumstances which suits you best. We've a blog post that runs through some of the similarities and differences: http://moneyaware.co.uk/2011/07/12-differences-between-an-iva-and-a-dmp/.

I'd suggest that you get in touch with us and we can have a look at your finances and talk you through your options before the deadline you've been set.

The first thing to do is visit our online debt advice service Debt Remedy (http://www.stepchange.org/msehelp) to help you find a solution to your debt problem quickly.

Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

To help you fill in the form, it’s best to gather together information about:
• Your income
• Your expenditure
• The creditors you owe money to

You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

If you phone us it may be possible to refer you directly to a debt advisor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

All the best.

James

huntert

StepChange_James wrote: »

Hello,

Thanks for posting. It's a difficult decision and I suppose personal choice comes into it too.

It's worth giving serious thought to getting rid of the unsecured debts, as it sounds like they've been hanging around for a while and it would be good to have them out of your hair.

On the other hand, if you can afford to increase your installments from £70 to something that would clear the debts in a reasonably short amount of time then that could be an alternative and it would mean you could pay your mortgage down.

I'm sure you're aware that companies don't have to negotiate settlements, but many will consider a reduced offer if you pay them a lump sum.

It's a nice problem to have I suppose, if I was in this situation I think I'd lean towards paying off unsecured debts.

Hope this helps.

James

Thanks James, im just really hesitant to make them an offer only to have them refuse and start hounding me again and hammering me with threats and intrest..its not even like you get to talk to anyone..blair oliver and scott are just so hard to deal with...........

angel1973.123

hi there. I would really like some advice. During the christmas period, and in January, (as it was my twin sons 18 birthday), i took out 3 pay day loans, thinking I would not have a problem paying them back. But i was working 2 jobs at that point, but i have recently lost one of the jobs, and have had my hours cut in my second job!!!!! i owe approx £1000, and am supposed to pay this at the end of the month, but am not going to be able too. Is there anyway I can get payments reduced, and the interest frozen?
Thanks you