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Struggling with debt? Ask a debt advisor a question

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  • ceeforcat
    ceeforcat Posts: 1,131 Forumite
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    Hi there - I normally post on the 'cutting tax' forum and this is all a bit novel for me.

    Over the years I have sent a few clients (and some relatives) down the CCCS path. However, I now have one who requires a similar solution, in my opinion, but, before he 'takes the plunge' has some concerns.

    The main one is that he is self-employed - a sole trader. He has a business overdraft, a business loan and a premises loan all secured by legal charge on his business premises. He does not use the same bank for his personal and business affairs.

    He has approximately £60000 of personal credit card debt, all in his sole name. £8000 is attributable to a credit card issued by his personal bank. The repayments on his credit cards amount to almost £2500 per month and this is now unsustainable. His home mortgage is with a third lender.

    His concerns centre around the effect on his business debts in the event that he enters a DMP to address his personal debt, particularly as his trading name is also his own name. I believe that the fact that his debts are secured against his business property does, by some irony, assist him. He is aware that he will have no alternative but to move his personal banking to an organisation with whom he has no indebtedness and also that his credit rating will be trashed.

    Is it possible to consider the DMP route in these circumstances? How will the non-existent credit rating impact on his business borrowings? (I should say that the business is healthy and there is no further requirement for additional borrowings)

    Thank you for your assistance in this regard.
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
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    red_apple wrote: »
    Hi
    I have not been completely honest with your company I have a dmp with you which i have had for 5 years. when i started the dmp I was not claiming dla for both my children

    A few years back I got dla for both my kids I did not declare this at my reviews as I saw the money as my kids money for their disabiltys and not for my debt repayment I now know this is wrong.

    I have over the past two years saved up 3 thousand pounds to pay my debt but it is not enough to clear the rest of my debt 5 thousand pounds debt . I am worried that if i phone up and say about the kids dla i will get into trouble for not declareing it in the past

    I was completely honest about my outgoings I didnt claim for the extra stuff I had to pay out for my kids disabiltys because of my kids dla covered this, and I did say about the extra child tax credit i got due to them both being on dla it was just the dla I didnt say about.

    im not sure how to put this right. Should cancle my dmp pay of the 3 thousand pounds of my debt then start a new one this time declareing my kids dla, or should I say nothing and carry on saving untill i have paid of all my debt . I am commited to clearing this debt I have never missed a dmp payment and I have saved this money to help clear my debts. I have foolishly got my self into this mess and i do worry about this daily .

    The thing is with the kids dla payment I could proberly come off the dmp and just pay the min payments should i do that .

    im sorry to of load this on to you but i just want to put this right i am very sorry for this mess please help :(
    Hello,

    Thanks for getting in touch. It sounds like this has been worrying you quite a bit, so the best thing to do would be to give us a call and talk to us about it. I promise we don’t bite!

    We do look to include DLA in our budgets under income but we also make sure that we cover all the additional costs that you have under expenditure too. I’d suggest making a list of all the disability based costs that are not currently on your budget, so we can fully review your income and expenditure and check out how things are looking.

    I would also suggest you mention that you have a lump sum available, as then we can advise you on whether full and final settlements offers are an option. This is where your creditors write off some of the debt if you make a one off payment to clear the rest.

    It must have taken a lot of courage to have posted this comment, I’m confident that things won’t seem nearly as bad once you’ve give us a call and we’ve gone through your options.

    All the best.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
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    ceeforcat wrote: »
    Hi there - I normally post on the 'cutting tax' forum and this is all a bit novel for me.

    Over the years I have sent a few clients (and some relatives) down the CCCS path. However, I now have one who requires a similar solution, in my opinion, but, before he 'takes the plunge' has some concerns.

    The main one is that he is self-employed - a sole trader. He has a business overdraft, a business loan and a premises loan all secured by legal charge on his business premises. He does not use the same bank for his personal and business affairs.

    He has approximately £60000 of personal credit card debt, all in his sole name. £8000 is attributable to a credit card issued by his personal bank. The repayments on his credit cards amount to almost £2500 per month and this is now unsustainable. His home mortgage is with a third lender.

    His concerns centre around the effect on his business debts in the event that he enters a DMP to address his personal debt, particularly as his trading name is also his own name. I believe that the fact that his debts are secured against his business property does, by some irony, assist him. He is aware that he will have no alternative but to move his personal banking to an organisation with whom he has no indebtedness and also that his credit rating will be trashed.

    Is it possible to consider the DMP route in these circumstances? How will the non-existent credit rating impact on his business borrowings? (I should say that the business is healthy and there is no further requirement for additional borrowings)

    Thank you for your assistance in this regard.

    Hello,

    Thanks for posting. When we speak to self employed clients we usually help them to plan out a business budget which helps to calculate their net income that then gets put into their personal budget.

    For your client I would expect his business loans to go into his business budget, so would be deducted from his earnings when working out his net income and therefore not be part of any reduced payments we recommend.

    If a DMP is his best option then it will involve him making reduced payments to all his personal debts and therefore have a knock on impact on his credit rating. We also ask that people do not take out any additional personal credit while on a DMP.

    These things combined could make things tricky in the future if he needed to apply for credit in his own name, but we have many self employed clients on DMPs who seem to manage.

    You may well know already, but our online advice tool Debt Remedy (http://www.stepchange.org/msehelp) can provide debt advice to the self employed and works much the same way as our telephone service.

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • ceeforcat
    ceeforcat Posts: 1,131 Forumite
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    Thank you so much, James (I presume) - gives me something to get back to him with. Much appreciated.
  • red_apple_3
    Options
    Hello,

    Thanks for getting in touch. It sounds like this has been worrying you quite a bit, so the best thing to do would be to give us a call and talk to us about it. I promise we don’t bite!

    We do look to include DLA in our budgets under income but we also make sure that we cover all the additional costs that you have under expenditure too. I’d suggest making a list of all the disability based costs that are not currently on your budget, so we can fully review your income and expenditure and check out how things are looking.

    I would also suggest you mention that you have a lump sum available, as then we can advise you on whether full and final settlements offers are an option. This is where your creditors write off some of the debt if you make a one off payment to clear the rest.

    It must have taken a lot of courage to have posted this comment, I’m confident that things won’t seem nearly as bad once you’ve give us a call and we’ve gone through your options.

    All the best.

    James


    Hi James
    Thankyou for reply i am very scarred to phone up as im worried i will be in trouble for not saying about the extra money how do i say that i have this money without getting into trouble :(
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
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    red_apple wrote: »
    Hi James
    Thankyou for reply i am very scarred to phone up as im worried i will be in trouble for not saying about the extra money how do i say that i have this money without getting into trouble :(

    Hello,

    You don't need to be scared, we're here to help people, not to tell them off!

    If it would make things a bit easier, you could PM "StepChange Private Messages" your reference number and let us know when would be a good time for us to call you.

    I'll then pass your details to a colleague, explain your situation and ask them to call you back.

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Raq100
    Options
    Hi,
    I wondered if anyone would be able to advise us.
    My partners just had a letter from 1st credit saying he owes 8000 odd, now he did have an outstanding debt, and about 5 1/2 years ago last made a payment, he had agreed a small about with them due to low income, but that was the last payment.
    Since then, this debt and another disappeared off his credit report.
    He has started his own small business which at the moment is making just enough to cover phone and car. But it is going in the right direction.
    Until then I am supporting us both in terms of money.
    As this was so long ago, and any old company could say you owe them money, I did read somewhere you can request a copy of the original agreement.
    Would this be the best thing to do?
    If so where can I get a copy of a template letter.
    Thanks so much for your help, we feel like we were just starting to get sorted and all this has really upset us.
    Also We have just been thinking and the installments were actually paid by me as he didn't have a cheque book at the time.
    Although it was him that wrote to them to offer installments.
    Would this make any difference that it wasn't him that paid them?
    Also would sending this letter requesting Cca be counted as acknowledging it?
    I am worrying they might take it to court and I thought this letter could postphone that?
    Thanks all so much for your help.
  • red_apple_3
    Options
    Hello,

    You don't need to be scared, we're here to help people, not to tell them off!

    If it would make things a bit easier, you could PM "StepChange Private Messages" your reference number and let us know when would be a good time for us to call you.

    I'll then pass your details to a colleague, explain your situation and ask them to call you back.

    Hope this helps.

    James

    Thanks James
    that would be good if i can pm you the info you need it may take me a couple of weeks to do this as i need to find out the info, like how much i spend on disabled stuff and now is quite busy

    I am having to look at middle schools for my autisic son( 3 this week ) and also my daughter is in the middle of getting statemented for her difficultys at school so lots of meeting and paper chassing going on with that and if that was not enough today my brother has been taking into hospital and as i am his next of kin it meens for stuff for me to do in term of arrange his care

    It would be great to get this sorted though as it dose worry me .is that ok to wait a few weeks if its not let me know Thanks very much for your kindness :T
  • john10001
    Options
    MSE_Andrea wrote: »
    If you need help with your debts, this is the thread for you.

    Trained advisors from StepChange Debt Charity (formerly CCCS) are here and waiting to answer your debt questions. They’re a friendly bunch so please don’t be shy!

    There are three ways to get in touch:

    1 - Simply post your question below and James, Mat or Rachel will reply. If your question is about bankruptcy, then pop over to the Bankruptcy board.

    2 - If you would prefer to ask a question in private, feel free to send a message to StepChange Private Messages.

    3 – StepChange Debt Remedy is a free and confidential online debt advice tool. You can put a budget together at your pace, and you can also talk it over with an advisor through online chat.

    If you're a StepChange Debt Charity client already, please contact its Aftercare team rather than posting in this thread (their contact details are in your Welcome Pack).

    This is discussion thread part three, see parts one and two.


    I have a lot of debts but don't want to do an IVA. I am managing to pay the minimum amount on most of my cards each month and interest on my overdrafts. There are one or two cards I have to use for payment of the odd service but it doesn't add to any debt, it just either remains static on those cards or reduces more slowly. I sometimes struggle to do the seven card trick and also pay for necessities like food & drink and also fuel to get to work and keep paying those debts off.

    Things have gotten a little worse with a certain bank earlier in the year having cut off my overdraft which left me in dire straits. As a result I had to reduce the amount I had been paying on that to just barely more than what they charge in interest. They have been making demands for £500 and also full payment which is over £1200 which I simply don't have as I don't even earn that much each month and especially after other outgoings I have little to no disposable income.

    This bank has ignored all my complaints, letters and replies to them on coming to an agreement on repayment and has never replied to me within the eight weeks required in law on complaints and disputes. They seem to be operating a letter factory and I am not actually sure if the different people and locations their letters are coming from are actually real people or just made up names for their template demands.

    They have failed to come up with or suggest any repayment solutions and have completely ignored what I have suggested in the past which would be a similar monthly repayment to a credit card I have which is for a similar amount of debt and ironically with the same bank who use the trading name of a retailer on that credit card.

    I have made a further complaint and response to their latest template letter I have received in which they are stating that if I fail to reply to the letter they will "formally demand repayment" as well as the following: 1) Withdraw banking facilities (already withdrawn afaik!) 2) The enforecement of any security given either by me or a third party (what does that mean?) and 3) Passing of my details to a credit reference agency.

    I have replied to the letter and set the record straight on their numerous faults and failure to respond to my complaints and replies or even note their contents but don't know what good it will do given they cut the overdraft anyway despite knowing my situation. I believe they will completely ignore that reply as well and follow through on doing that regardless of me having replied and trying to reach agreement with them.

    I am unsure what threat 2) means so if you know please let me know. I don't want anything placed on my credit file given that they have failed to prove there has ever been a minimum required monthly payment amount on my overdraft as it was a student account and has never had such an agreement in place on the account. In addition I have only ever made small payments to the account of upto £50 every four weeks max for several years. This bank has only recently at the end of 2011 started making these demands and claims "out of the blue" after the bank in question has found itself as a corporation in difficulties. The fact that I have only ever made those small payment amounts for several years which was never questioned implies otherwise. They have also failed to provide any proof of their claims.

    What are my options now and what do their latest threats above mean as I am sure they will follow through with them as they have previously ignored their own statements as well as my replies and just gone ahead anyway.

    In order to just get rid of this problem bank which is causing me a great deal of stress, worry and ill health, would it be possible to make a full and final settlement offer for a reduced amount (provided nothing negative is place on my credit file) or is this something that is simply not done directly with such organisations but usually only with DCA's?

    Thanks for any advice and suggestions,


    John
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
    Options
    Raq100 wrote: »
    Hi,
    I wondered if anyone would be able to advise us.
    My partners just had a letter from 1st credit saying he owes 8000 odd, now he did have an outstanding debt, and about 5 1/2 years ago last made a payment, he had agreed a small about with them due to low income, but that was the last payment.
    Since then, this debt and another disappeared off his credit report.
    He has started his own small business which at the moment is making just enough to cover phone and car. But it is going in the right direction.
    Until then I am supporting us both in terms of money.
    As this was so long ago, and any old company could say you owe them money, I did read somewhere you can request a copy of the original agreement.
    Would this be the best thing to do?
    If so where can I get a copy of a template letter.
    Thanks so much for your help, we feel like we were just starting to get sorted and all this has really upset us.
    Also We have just been thinking and the installments were actually paid by me as he didn't have a cheque book at the time.
    Although it was him that wrote to them to offer installments.
    Would this make any difference that it wasn't him that paid them?
    Also would sending this letter requesting Cca be counted as acknowledging it?
    I am worrying they might take it to court and I thought this letter could postphone that?
    Thanks all so much for your help.

    Hello,

    Thanks for posting. It sounds sensible in this situation to request a copy of your partner's agreement, to make sure they are definitely collecting for a debt he took out.

    Here is the wording you can use to request the original agreement:

    "To:

    Without Prejudice

    Dear Sirs

    Ref …………………………………….

    With reference to the above account:

    Please will you send me a true copy of the original signed agreement together with an up to date statement of the account showing all transactions, including interest and charges, and a copy of any other document referred to in the agreement.

    I understand I am entitled to this information under ss77-79 of The Consumer Credit Act (CCA) 1974.

    I also understand that this information should be sent to me within 12 working days of you receiving this letter. The CCA states that creditors are unable to enforce an agreement until this request is complied with.

    I am enclosing the £1:00 fee, payable under the Consumer Credit Act 1974, for each account.


    Yours faithfully"


    The wording of this letter does not acknowledge ownership of the debt, so there is no problem in sending it.

    If your partner was the one in contact with this debt I don't think it makes a difference that the payments came from your account.

    If 1st Credit come back with proof this is your partner's debt I would recommend that he gets some advice from us. It is usually possible to come to arrangements for this sort of debt without needing to go through the courts.

    The easiest way to do this would be to use our online advice service Debt Remedy (http://www.stepchange.org/msehelp). Our automated system will then be able to give personalised advice about how best to deal with the debt.

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

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