Struggling with debt? Ask a debt advisor a question

System

PandyTudor wrote: »

Hi, I hope someone can help.

I have debts going back 8-10 years, most are now statute barred and I am dealing with them (thanks to the help/templates on MSE).

The tricky part of my credit file seems to be MONTHLY new defaults from one single debt with RBS, the debt in question is a student overdraft, I finished Uni 10 years ago and have made no contact or payment for over 7 years.

Two real questions.
1. Can I approach them to stop defaulting every month (under statute barred?)? If so how?
2. Is there anything I can do to get the MONTHLY defaults removed from my credit file?

Further on 2, I assumed that you could only default once? I spoke to a friend about this and they said that as it wasn't a loan, but an overdraft that they could default each month that I don't clear the overdraft?

If anyone could offer any advice on this I would be very grateful.

Many thanks,
PandyTudor

Hi PandyTudor and welcome to the forum.

It’s a sketchy area and it’s worth considering that some creditors don’t actively place a default on your credit file until just before the debt becomes barred (although this is not best practice).

I’d recommend you start by sending the Limitations act letter to RBS, you could also add a note about the default and that this could be seen as a form of harassment.

It’s always worth noting that statute barred debts do still exist and still be chased; they just can’t be enforced via the courts.
I hope this helps.

Kind regards,

Mat

System

FingerPastry wrote: »

Hi,

Just before Christmas my partner spoke to someone representing a debt management company to help us sort out our jiont debts of around £6798.30. They told her that they would do the usual, negotiate on our behalf to reduce our debt, freeze interest etc etc. Now I don't really (or didn't), really understand how these work, so I called them. The representative told me that they charge a one off fee of £40 (we agreed £20 per week), i.e. the first two weeks payments would cover their management fees. I said that it seemed very cheap, so what is in it for them and he told me it is the volume of people they get on board that pays for them............. So we agreed to sign up with them.

Fast forward to the start of this month and I thought it odd they hadn't been in touch at all, so I contacted them and asked them for a statement (they have been taking £20 per week since December). I received the statement last week and apart from the breakdown of debt repayments they have arranged there was one item at the foot of the letter saying £30 Monthly Management Fee. I read the small print and it does indeed seem to be a monthly payment! I havbe just tried to call them and have got no answer,but will continue to call to get clarification if possible.

A quick bit of rough maths shows that at £80 per month (on a 4 week month) to them the shortest agreed repayment time (16.5 months) would cost us £495 in fees (that debt itself is £330!), while the longest term one they have negotiated (i.e. what would be the maximum time we would be with them) is 223 months, meaning we would have paid them over £6600 in fees for a debt of £6798.30!!!!!!

Anyway my point is, can I get out of this agreement with them and can anyone recommend a debt management company / centre that won't rip us off?

........And yes, we have been pretty stupid / naive..... but please help!!!

Hi and thanks for your message.

I can see you’ve already had some good advice from mum2one

If a debt management plan is your best option, we provide these free of charge so that all the money you pay into the plan goes towards clearing your debts. It’s also worth noting that nobody can guarantee that interest and charges are stopped on your debts, this is entirely up to the creditor.

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 free Helpline on 0800 138 1111. We’re open Monday to Friday 8am - 8pm and Saturday 9am until 3.00pm.

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

I hope this helps.

Kind regards,

Mat

System

meggiemoo1992 wrote: »

Hello, Last March I was diagnosed with Bipolar Affective Disorder. For many years I have experienced manic episodes during which I bought many things from a car (15,000 loan) at the worst point. Cycles of maxing out cards.....
Anyway, since being diagnosed and taking meds I've not bought anything except food and paying bills really. I had a next directory card which had 900.00. 600.00 I transferred to 0% then paid remainder. I have mbna which last month had 560.00 this month has 290.00 which I am paying next week from March salary. Zero. Gone! Going to leave it open as get offers 0%. In cards that leaves Barclaycard £1858.13 0% til Aug 13 and Natwest £3551.68 0% til Sept. Finally, Santander loan got 3 figures - capital 4645.09, redemption 4763.84 and total 5650.29. I have been making over payments. So my question is, when mbna is paid next week. what should I target next. The loan which currently ends June 2015. Think its 13.9%. Just pay min on cc then bal trans Aug? I do feel i am making some progress but I just want to do the best thing to make it go quicker. Thank you, x

Hi and welcome to the forum.

It sounds like you’ve made a brilliant start so far, well done.

You’d really need to look at what interest rates the 0% cards default to when the 0% period ends.

Some people think it’s best to start on higher interest credit first, but this is complicated slightly when you have credit on 0% deals.

Personally I would concentrate on paying down the credit cards as much as possible before they become interest bearing. Once these are clear you can start on the loan.

If you need any further help or advice you can always come back to us.

I hope this helps.

Kind regards,

Mat

FingerPastry

mum2one wrote: »

You did the right thing seek help, - I would take a look at page 1 - there be links to the stepchange debt rememdy and other advice sheets, I have been with stepchange for 6 months, and can't recommend them enough, best thing is every penny goes to my debts, xx

Thank you for the advice!:j

I have had a read and also a reply below form Mat, so will get in touch with them to hopefully help us out!

Thanks again! x

kimbroolay

I started a new job in July 2012 which unfortunately resulted in me losing £300 a month due to outer London changing to fringe allowance. I've now got an overdraft of £600 and a credit card of 2K. I'm really struggling to keep on top of things and it doesn't help that my partner isn't any help.

Should I get a loan to clear everything or to just clear my overdraft?
My only worry with having a loans the monthly repayments because once all my bills come put I'm left with £300 for the month which some of it needs to go on food shop for the month and fuel.

Due to being in my overdraft I don't see this remaining £300 and with my overdraft currently at £600, that's half my pay so when my bills come out I'm back in it.

Can anyone advise me on what to do?

StepChange_James

kimbroolay wrote: »

I started a new job in July 2012 which unfortunately resulted in me losing £300 a month due to outer London changing to fringe allowance. I've now got an overdraft of £600 and a credit card of 2K. I'm really struggling to keep on top of things and it doesn't help that my partner isn't any help.

Should I get a loan to clear everything or to just clear my overdraft?
My only worry with having a loans the monthly repayments because once all my bills come put I'm left with £300 for the month which some of it needs to go on food shop for the month and fuel.

Due to being in my overdraft I don't see this remaining £300 and with my overdraft currently at £600, that's half my pay so when my bills come out I'm back in it.

Can anyone advise me on what to do?

Hi Kim,

I've spoken to a lot of people over the years who've been in a similar situation and taken a loan to pay off their overdraft. Most of them still had problems with affording everything (made worse by the new loan) and built the overdraft back up.

So it's important to be really careful when taking out new credit to pay off old credit. It sounds like the budget you've planned suggests you'll be cutting your finances quite fine if you take out a new loan.

I'd suggest getting in touch with us for some advice (contact details are in my signature below). We'll help you plan out a detailed income and expenditure budget (it sounds like you've already done this but we can help you make sure everything is covered). After that we'll be able to recommend solutions that suit your circumstances.

One thing you could consider would be moving bank accounts to a simple one with no overdraft. Rather than constantly swinging in and out of your overdraft you can then make a regular payment to the overdraft every month and make progress towards clearing it off.

Hope this helps.

James

Dee_cb

Hi, I'm looking to get some advise if possible. My debt is currently at just over £16,000, to 5 companies, 1 is a loan the rest is on credit cards. I am paying slightly more than the minimum payment on the credit cards each month, and I have not missed a payment for years. After I have paid all my bills I am left with about £80 disposable income a month. I have spoken to a company about looking at debt management but they have said because I can 'afford' the minimum payments I wouldn't be able to go down that root. I work for a financial services company and I am concerned that I could lose my job if I start to fall behind on payments. I'm really unsure on what to do next so any advise would be greatly appreciated.

StepChange_James

Dee_cb wrote: »

Hi, I'm looking to get some advise if possible. My debt is currently at just over £16,000, to 5 companies, 1 is a loan the rest is on credit cards. I am paying slightly more than the minimum payment on the credit cards each month, and I have not missed a payment for years. After I have paid all my bills I am left with about £80 disposable income a month. I have spoken to a company about looking at debt management but they have said because I can 'afford' the minimum payments I wouldn't be able to go down that root. I work for a financial services company and I am concerned that I could lose my job if I start to fall behind on payments. I'm really unsure on what to do next so any advise would be greatly appreciated.

Hi Dee,

It's hard to be certain without knowing more about your finances, but it's fair to say that it's best to avoid DMPs (Debt Management Plans) if you can afford to keep up with the full payments.

It's not that DMPs are a bad thing but they do affect your credit rating and there's no guarantee that creditors will freeze interest and charges.

If you'd like a second opinion you could get in touch with us and we'll have a look at your budget and see how things stack up. If you've only £80 left to feed yourself after paying bills it sounds like you probably can't afford to keep up with all your debt repayments.

We'll be able to help you look at your options. 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.

If reduced payments are the best option then it's probably worth checking with your employer to see what the effect would be. I've found that people who work in financial services are often allowed to go onto DMPs without if affecting their employment when they are upfront about things but it's always best to check before entering into anything.

Hope this helps.

James

mum2one

FingerPastry wrote: »

Thank you for the advice!:j

I have had a read and also a reply below form Mat, so will get in touch with them to hopefully help us out!

Thanks again! x

No probs, just wanted to show there is light at the end of the tunnel. There all lovely at Stepchange, - hope you get sorted ok. xx

hollow_crown

Hi,

Apologies firstly as this may be a relatively long post. I have a few queries that I've never had answered in relation to credit reports and also debt collecting firms.

My credit score with CreditExpert is 465 - its very poor. I have a 'default' account with 1 company for £719. If I pay this off in full so the balance becomes settled, will this lift my credit score as it's one less outstanding balance? I had a credit card with Capital One a few years back that I settled and that is still listed as 'default' on my credit report.

I also have a Current Account with a bank that is 6 payments late standing at £3,179 (I had a student overdraft of £3000, as soon as I left university, unemployed, they started charging me £2/day). On my report it is listed as £3,179 but I am receiving letters from the debt collectors it has been passed to saying I owe over £3,300.

These are the only two things listed on my credit report as bad - if I can pay these off will my score jump drastically or is it something that will still take years? I am definitely not expecting it to happen overnight, don't get me wrong.

One last question - I receive letters in the post from debt collectors saying I owe them random amounts of £100+, £80+, £200+ etc. Now I know that some of these are actually from accounts I've previously had such as BT, Eon etc...but they aren't listed ANYWHERE on my credit report and never have been, both with CreditExpert and Equifax. Should I be more concerned with paying the two accounts off from above that ARE listed on my account, or should these be paid off first.

Apologies for the length of this!!

Thanks in advance