Struggling with debt? Ask a debt advisor a question

jadecarter

I hope I can be debt free until I die.

StepChange_James

mumofse7en wrote: »

Hi, I wonder if anyone can help me.
I got a call from a company called Advantice saying that I owe £3000 of tax credit overpayment, the man didn't have my current address, I've been here a year, or any other details other than my phone number and name. Stupidly I told him my NI number, date of birth and new address. I have had no letters even though I am still in receipt of tax credits and they have had my new details for a year.
He told me to get credit via the bank or credit card to pay for this and wanted my debit card details, I refused as was worried, so he said it would be marked down as a refusal to pay and that as he had so many details about me he couldn't see why I was concerned, but he had nothing I hadn't given him. He wanted an immediate payment and then. 12 monthly payments of £266.
They then phoned me again at 8.50 this morning, I didn't answer as I am so scared, I suffer with depression and anxiety and am so scared right now I feel really down. Can anybody give me some advice please.

Hello,

It's hard to know if this is a scam or not. It's always best to be careful in these situations so I'd recommend getting in touch with the Tax Credit Payment Helpline on 0845 302 1429. They should be able to look at your account and tell you if there's been an overpayment and see if they've sold the debt on.

If it's legitimate then I'd suggest getting in touch with us for advice on how best to repay this debt (http://www.stepchange.org/Contactus.aspx).

If it's a scam I'd recommend giving the police a call on the non-emergency line (http://www.police.uk/101) and give them as much detail as possible about the call.

You did the right thing to avoid giving them your card details until you knew they were legitimate. If it was a scam I suspect that would have been the information they were really after.

All the best.

James

StepChange_James

rizzlekizzle wrote: »

Hi,

i was wondering if you could help me (my head hurts from trying to work all this out!)- my wife and i really want to get rid of our debts this year and have already made a start but were not sure what to try and pay off first...
we have on overdraft with Nationwide for around £2k, a credit card with Nationwide at £3k (currently interest free) and a loan that is due to expire at the end of next year with around £4k left (17.4%)
we're a bit lost as to what to do so any help would be brilliant!!!

Hello,

Firstly well done on trying to tackle these debts. Getting rid of all of them is an impressive target to have set yourself. I'd suggest planning an income and expenditure budget to make sure you'll be able to manage that level of payment without leaving yourself short on essential bills.

It's really down to you how best to proceed in terms of clearing the debt. Most people want to pay their debts back with the least amount of interest incurred - usually the best way to this is to pay the minimums on everything and overpay as much as possible on the highest interest debt.

Sometimes it's not quite that simple - for example some loans might not reduce interest for early repayment or might not refund all of the interest if you pay it off early. If the 0% offer runs out soon and will revert to a huge % after then that might be worth focusing on.

Really it's up to you but hopefully my reply (though a bit waffly) will give you an idea about potential options.

Kind regards

James

StepChange_James

jogalong16 wrote: »

Hi,

I've carelessly racked up an absolute ton of credit card debt over the last decade. It started off when I was at university and rather than keep my lifestyle aligned to my income after I graduated I just allowed my debt to increase month after month after month. Credit card companies kept increasing my credit limits, presumably because I always paid on time and my salary increased over the years too. However, this has just made things worse.

I now have over £39,000 in credit card debt. Currently, every single bit of that debt is on a 0% card and I've never missed a payment. Up until now, I've always managed to transfer each balance from one 0% card to another as each deal expires. However, I'm now out of runway. I have no other cards to transfer balances to. And I know from informal 'inquiries' to my existing creditors that further wiggle room isn't likely to be granted.

It's only since the start of this year that I finally started being sensible and 'snowballing' my debts but I have to face facts. One 0% deal runs out in June and I owe more than £16k on that card. Another one runs out in July and I owe more than £5k on that one. The interest rate on the former is going to be 18.9% (possible more).

My salary is probably just about such that I could keep paying the minimum amount each month, even with the interest charged on top. But this will never allow me to actually make headway with my overall debt. I see no light at the end of the tunnel.

I already have a comprehensive Statement of Affairs but I found I had many additional costs that couldn't be reflected on the Step Change website when I went there to fill theirs in. Costs that are necessary in the short-term (i.e. dental treatment over 6 months that will be in excess of £1k) or income protection insurance (which in this age of austerity I feel is more important than ever!)

When I got my Personal Action Plan it suggested that I had over £1,000 after household bills that could be distributed across creditors. This simply isn't feasible. It would leave me unable to buy a simple birthday present for a family member and I couldn't have so much as one evening at the cinema every month.

Additionally, I found that the automatically-calculated contractual payments for my creditors was on the high side (some only charge 1% of the current balance, for example) so the amount I am contractually required to pay them was wrong.

Ultimately, I just don't know what to do for the best. Is there enough flexibility in Step Change's offering to reduce the proposed amount I pay creditors from more than £1,000 to, say, £750?

And how frequently does it happen that a creditor doesn't accept a DMP? Mine are all household names and I can deal with my credit rating being destroyed, but if going down the DMP route also leads to threatening letters or one creditor not agreeing to it then I know I'll worry myself sick.

Please help.

Hello,

Thanks for posting.

Both of your questions are related to each other really - the chances of a payment being accepted by your creditor are affected by the information listed in your budget. Companies often scrutinise the information and look for any spending that they think is too much and will reject offers if they think you could afford to offer more.

Getting a budget right is a balancing act between having enough to live off and offering your debts as much as you can reasonably afford. Because everyone is different when it comes to money it can take a bit of effort to find that nice balance.

I don't know what stage of debt remedy you're at but you may be able to go back into your budget and amend it yourself. If not you can call the number in your paperwork and someone in our team can have a look at your details and change them for you.

The payment on a DMP is worked out by deducting your expenses from your income and seeing whats left over. So dropping the payment from £1000 to £750 would involve increasing expenditure to make sure everything that you need is covered but keeping in mind the need to make sure the budget is likely to be accepted by your creditors.

Our advisors are skilled at putting together budget so I'd recommend giving us a call.

If creditors don't accept payments on a DMP we still send them the payment and they'll always apply it to your account. They may use some of their standard debt collection techniques but if you stick to the payments then there's nothing they can throw at you that you can't deal with.

You can read a bit more in this blogpost: http://moneyaware.co.uk/2011/08/you%E2%80%99re-in-debt-but-what-can-your-creditors-actually-do/.

Kind regards

James

StepChange_James

beth3735 wrote: »

mumofse7en. Im not saying its 100% a hoax, but when we owed a little over £1.5k to tax credits due to over payments, we only knew as we had a proper letter from HMRC telling us. Also once they knew the amount, they took a small amount each month off us for 18 months. Not once did they ask for a big chunk.

If I was you I would call Tax Credits up and ask them whether they know if you have over payment pending as you have had a call. They will clear this up for you.

Sorry know you didn't ask information off me, but just wanted to let you know my genuine experience of Tax credit over payments and how they went about letting us know. It wasn't done through a different company or on phone. But then again this could be years old and they have sold it on. Still worth a call as the HMRC would of let you know 1st.

This is great Beth - I'd already replied myself before I read it. Your experience is how overpayments are usually dealt with, thanks for posting.

StepChange_James

jadecarter wrote: »

I hope I can be debt free until I die.

Hi Jade,

I hope you manage this. I'd say that in this day and age it's very hard to avoid any credit. I think there'll be very few people who manage to never use credit at all but trying to have as little debt as possible is absolutely a good idea.

If you've got any debt related questions please feel free to ask.

Kind regards

James

Mach13

Today I learned that my son's debt repayment arrangement via StepChange includes a surprising arrangement with LLoyds TSB (The listening bank)

Apparently, part of his monthly payment includes an amount for around £50 to Lloyds TSB.

....of the £50 paid to lloyds
£24 goes to an interest rate of around 12-13% and a monthly Debt £6 goes to a monthly debt fee.
only £20 goes to reducing the debt, :eek:
Is this normal practice across lenders?

As a Lloyds customer I went to see my bank manager to ask if there was another way this could be done without these fees or high interest rates. But it seems explicitly not! I didn't sense a sympathetic attitude towards the debt recovery either.

The repeated position was.... "Everybody else pays interest rates, why shouldn't people on debt recovery?"

In fact when i expressed my concern over such an aggressive and seemingly unreasonable and unsympathetic position (for a listening bank) with people desperately trying to correct their finances and living on next to nothing to do so, the person alluded to banks like 'Halifax' and seemed to reason that being soft was why they had suffered so badly.

Not what I would expect from them so, I'll be closing my TSB account, purely upon principle and conscience, but this position still seems wrong. is there recourse via another avenue?

Would appreciate some help here

StepChange_James

Mach13 wrote: »

Today I learned that my son's debt repayment arrangement via StepChange includes a surprising arrangement with LLoyds TSB (The listening bank)

Apparently, part of his monthly payment includes an amount for around £50 to Lloyds TSB.

....of the £50 paid to lloyds
£24 goes to an interest rate of around 12-13% and a monthly Debt £6 goes to a monthly debt fee.
only £20 goes to reducing the debt, :eek:
Is this normal practice across lenders?

As a Lloyds customer I went to see my bank manager to ask if there was another way this could be done without these fees or high interest rates. But it seems explicitly not! I didn't sense a sympathetic attitude towards the debt recovery either.

The repeated position was.... "Everybody else pays interest rates, why shouldn't people on debt recovery?"

In fact when i expressed my concern over such an aggressive and seemingly unreasonable and unsympathetic position (for a listening bank) with people desperately trying to correct their finances and living on next to nothing to do so, the person alluded to banks like 'Halifax' and seemed to reason that being soft was why they had suffered so badly.

Not what I would expect from them so, I'll be closing my TSB account, purely upon principle and conscience, but this position still seems wrong. is there recourse via another avenue?

Would appreciate some help here

Hello,

Thanks for posting.
We always ask creditors to freeze interest and charges when a debt is being paid through a DMP (Debt Management Plan). While companies don’t have to agree to this request they usually do – so it’s not normal practice to continue adding interest though it does happen in some cases.

Your son could follow the complaints process with Lloyds. If he submits a short letter of complaint to Lloyds, they’ll then have to put together a response which explains their position. If your son is unhappy with their reply he’ll then be able to escalate the complaint to the Financial Ombudsman (they only look at complaints that have gone through the banks complaint process first).

The ombudsman is completely impartial and the bank has to abide by their decision. You can find out more about this process here: http://www.financial-ombudsman.org.uk/consumer/complaints.htm.
I hope this helps.

James

Mach13

Hi James
that's very helpful

I asked the person I spoke to this morning at the TSB branch how the matter could be escalated?, they didn't mention a formal complaint process. When I asked if there any protocols prior to approaching the ombudsman they just said no you just go to them direct. Surprisingly unhelpful.

So i'll pass this onto my son.
Thanks again

moohound

I am in a DMP with PayPlan and I pay £372 a month for 9 debts. A relative has offered to help me clear these if the creditors will take a reduced payment.

Payplan would not look at helping me get full and final settlements unless I had the money in my account. I explained that the money was not mine and would not be in my account, so we hit a wall there.

I sent out Full and Final payment offers myself of 40% to all creditors. I signed these - is this the wrong thing to do? I don't know.

I have Stake your claim looking at PPI for me. If I made Full and Final settlements, what would happen to this, I don't expect money back and a reduced final settlement , but I don't want to be paying fees for abandoning the PPI process with them, I realise I could have attempted to claim this back myself, but I have already filled all the forms in and one account has PPI on it but I don't think it will be very much. I wish I had not bothered really.

4 creditors are still applying large charges and interest, some are twice than the monthly payment they receive. I emailed PayPlan about this and they suggested I write and complain.

I am currently very stressed about all this, even though a relative has offered to help, I don't sleep or eat properly. I have panic attacks and feel sick and faint and I vomit with worry and stress.

I can't seem to get any answers from PayPlan since my advisor changed. I wish I had gone with CCCS (as was)

Please Please help and tell me what to do next, I feel lost at the moment.