Struggling with debt? Ask a debt advisor a question

StepChange_James

one_day_rodders wrote: »

Hi,

I have been contacted by Compensation Claim Line who state they can get written off 50% of my outstanding debts.

I get the impression though that all is not as it seems.

I have not parted with any monies nor signed any agreements & dont intend to either until totally satisfied with the details of any "deal".

However I was wondering if anyone else has had any dealing with them & if so what those experiences were & how genuine this "deal" is.

From what I can gather the only way I can see them reducing any debt whatsoever is through reclaiming any ppi paid or excessive interest payments made on my debts - if this is the case then they will not be able to make any impact as I had no ppi on these debts at all.

Would welcome any feedback

I've not got any personal experience of this company, but generally speaking if something sounds too good to be true it nearly always is.

There are a few possible reasons behind their 50% of your debt written off claim. It might be a legitimate debt solution being "sold" to sound as appealing as possible or it could be something less straightforward.

If I was going to guess I think it might be an IVA - though the percent of your debt written off varies a lot depending on your finances and these are not a good solution for everyone.

I'd recommend that you get in touch with us (links in my signature), as we can give you impartial advice about all the different options available and give you an idea of what might help you.

Hope this helps.

James

StepChange_James

Rrambles wrote: »

Hi,
I have 3 payday loans outstanding and I unable to repay them on the due date next week.
Can you advise me on the best way of negotiating a repayment plan with them{assuming that is the best course of action for me)

Hi Rambles

If you know that the payday loan payments are going to be impossible to pay then it’s better to stop them before they try to take payments. Payday loans will usually make you sign up to something called a “continuous payment authority”(CPA) when you take out the loan, this gives them permission to take payments from your debit card.

While CPAs are trickier to cancel than a Direct Debit, it is possible. This blogpost will take you through how to cancel a continuous payment authority (http://moneyaware.co.uk/2012/07/how-to-cancel-a-continuous-payment-authority-cpa-on-a-payday-loan/) and provide you with links to template letters you might need. Bear in mind that you may incur charges for not making the payment on the loan, though if they request a payment and the bank rejects it you have these charges anyway plus the bank charges on top.

Once you’ve stopped the payday loan company from taking payments you need to start thinking about alternative ways of paying the debt. We can help you with this. We can help you plan out an income and expenditure budget, which will show what you can afford to pay towards your debts and we’ll be able to give you advice on how to deal with the debts.

You can get help from us online, using our Debt Remedy tool (http://www.stepchange.org/msehelp) or you can give us a call and talk to an advisor (http://www.stepchange.org/Contactus.aspx). It's up to the payday loan company whether they want to stop interest and charges, but quite often they will do this if you are offering them a reasonable monthly payment (we can advise you on this).

All the best.

James

StepChange_James

Overspent wrote: »

Hello I'm new to the forum and need some advice.

I've got a natwest loan and 3 credit cards, amounting to approx £18k.
I'm a homeowner and work full time, but it looks like now my wage is only just going to cover the bills and the minimum payments on my debts, leaving me with nothing left to provide for my family. I currently have about £80 which I can use for food, but when I get paid next week it will all be accounted for, leaving us with nothing for the coming month. We've also got a baby on the way, which is great exciting news btw , but the wife has been unable to work and we've had to buy everything ready for the arrival, so had to spend a bit beyond our means.

I'm worried about missing payments and don't know what to do.
The loan is £230p/m and my cc's are £10p/m, £70p/m and £210p/m.
I tried applying for a new loan (i know maybe not the best thing to do) to try get the payment lower and under control but the bank declined it.
So now I'm a little unsure what to do?!
Anyone got any advice? Can I contact the bank and ask to miss a payment? Or would one of these debt management plans be wise? Any info would be great!
Thanks
J

Hi Overspent,

First of all, congratulations on the impending arrival! We've a blogpost about having a baby when money's tight: http://moneyaware.co.uk/2012/09/having-a-baby-dont-let-money-worries-get-in-the-way/.

Rather than looking at paying all the bills and having nothing left to live on its usually a better plan to work out what you need to live on (household bills, food, travel, etc) and then see what's left over for unsecured debt.

That's probably going to mean that there won't be enough available to maintain full payments to your unsecured debts but it's better you pay less to them than leave yourself going hungry or falling behind on the rent/mortgage.

We can give you advice on how to sort out the unsecured debts. 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.

Kind regards

James

YoungRio

StepChange_James wrote: »

Hi Young Rio,

It's hard to say exactly how long your credit file would be affected by a DMP but you're calculations could work out to be right. We've recently heard from people who've received default notices in the last few months of a DMP, which will then stay on their credit history a further six years.

While this information would be on your credit history, it tends to matter less the further into your past it goes. So it would still be a factor on credit applications but lenders are likely to see a five year old default notice as less of an issue than one you got a few weeks ago.

As everyone's situation is different there are sometimes circumstances where a DMP is a more suitable option. There's also an element of personal preference involved. I'd suggest you give us a call on the number in your paperwork and we can talk through which option would suit you best.

Kind regards

James

Thanks for the response James,

Another quick question if thats OK?

I have resigned myself to 6years without access to decent credit, i.e Mortgage, So i would prefer to have my file shown as Defaulted as soon as i start to make reduced payments.Is it possible for a creditor to mark my file as Defaulted if i ask them to when i start to make reduced payments? As far as i understand, If they do this, They cannot put any further updates on that file?Therefore from the date of Default, I know exactly when it will disappear as opposed to having a reduced payment flag for the next 7 years then the possibility of them then adding a Default at the end?

Dovii

Hi, I have just been to the CAB about credit card debt as I lost my job. They gave me a letter template along with a financial statement asking them to give me a 6 month break. Do I send this letter to the credit card company and the collection agency they got chasing me, or just the credit card company? I forgot to ask this.

Thankyou

bhoy1976

Hello,

All going well, I should be free of my historical debt this year. Looking to the future I obvioulsy would like to improve my credit rating.

When I entered into a DMP with CCCS in 2008/2009 I understandibly defaulted with my creditors. I was of the understanding that this would there would be only one default notice on each of those accounts.

However, having just had my Noddle account activated some accounts show a Default for consecutive months.

Is this some kind of error or do Defaults show each month until the account is settled.

And if this is correct, will the latest default notice be the the starting point for the six years the notice will remain on my credit report?

Kind Regards

bhoy1976

Lets_get_sorted

HELP....
I have just found out that i will not be working properly for the next 6-7 months due to health .
I run my own bussiness which to be honest has got me into debt .
these amount to £25,000 to MBNA card £5000 nat west bussiness account overdraft and around £5000 with nat west as a loan .
When i shut the firm i will need to get car insurance and tax for two cars ,and if im not working will lose working families tax credit ,i will have an income from another property which will give me around £150 a week to live on after paying my mortgage . I have looked at selling the property but its value is terrible at the moment .
has anyone made offers as final settlements to either of the above ?
any suggestions appreciated .

Former_StepChange_Rachel

Dovii wrote: »

Hi, I have just been to the CAB about credit card debt as I lost my job. They gave me a letter template along with a financial statement asking them to give me a 6 month break. Do I send this letter to the credit card company and the collection agency they got chasing me, or just the credit card company? I forgot to ask this.

Thankyou

Hi there Dovii,

I would forward that letter and a copy of your financial statement to the collection agency, as they are the ones who are taking care of the debts at the moment. It wouldn't hurt to send it to the original creditors well to keep them in the picture.


Did the CAB mention anything about token payments? We at StepChange usually advise a goodwill gesture payment of £1 to each creditor per month until your situation improves.

Best regards,

Rachel

Former_StepChange_Rachel

YoungRio wrote: »

Thanks for the response James,

Another quick question if thats OK?

I have resigned myself to 6years without access to decent credit, i.e Mortgage, So i would prefer to have my file shown as Defaulted as soon as i start to make reduced payments.Is it possible for a creditor to mark my file as Defaulted if i ask them to when i start to make reduced payments? As far as i understand, If they do this, They cannot put any further updates on that file?Therefore from the date of Default, I know exactly when it will disappear as opposed to having a reduced payment flag for the next 7 years then the possibility of them then adding a Default at the end?

Hi there YoungRio,

You’re certainly in your rights to ask the creditor to log the default sooner rather than later, but they are not obliged to do that. They're not meant to default you more than once when they know you're only able to give reduced payments but they can do if they want. If however your payments were sporadic - i.e. payment in full one month, reduced payment the next - they are likely to default you each time.

It might be useful to take a look at our blogpost on default notices: http://moneyaware.co.uk/2011/09/default-notices-what-are-they-and-what-do-they-mean/


The thing to keep in mind is that your creditors would sooner see you making consistent payments, even if they are reduced until your situation improves.

Hope this helps,

Best regards,

Rachel

Former_StepChange_Rachel

bhoy1976 wrote: »

Hello,

All going well, I should be free of my historical debt this year. Looking to the future I obvioulsy would like to improve my credit rating.

When I entered into a DMP with CCCS in 2008/2009 I understandibly defaulted with my creditors. I was of the understanding that this would there would be only one default notice on each of those accounts.

However, having just had my Noddle account activated some accounts show a Default for consecutive months.

Is this some kind of error or do Defaults show each month until the account is settled.

And if this is correct, will the latest default notice be the the starting point for the six years the notice will remain on my credit report?

Kind Regards

bhoy1976

Hi bhoy1976,

Your question is very similar to the one from YoungRio that I’ve just answered (default notices must be today’s hot topic!).

Your creditors don’t usually keep logging defaults on your file once you enter into a DMP, but they can do if they wish. Each one will have its own 6 year period before it drops off.

We’ve written a really useful blogpost that goes into further detail, if you would like to take a look: http://moneyaware.co.uk/2011/09/default-notices-what-are-they-and-what-do-they-mean/

It might also be worth your while to take a look at your Experian and your Equifax credit files. Different creditors will use different credit files so you might not be getting the full picture.

MoneySavingExpert has a really informative article that talks all about how to deal with your credit files most effectively: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Your credit file is mending itself all the while, and if you wanted to take out further credit while you still have these defaults, it’s by no means impossible. It might just be a case of not having the preferable interest rate you would like, ideally.

Hope this helps. Post again if you have any more questions.

Best regards,

Rachel