Struggling with debt? Ask a debt advisor a question

StepChange_James

DebtBurden2013 wrote: »

I have finally after a long time of running from the problems of my debt have decided to try and deal with them.
I have a debt which was in huge and not payable within my lifetime.
I have accepted liability for the debt in the past.
I had a court order to pay £200 off a month for the first few years i didn't do anything and they didn't try very hard to contact me.
After a while they came after me for the £5000 arrears or so on the debt. Which for the past 3 or 4 years i have been paying off but in lump sums of £1000 here and £2000 next as they threaten legal action.
The thing is either me paying £200 a month or my current method is not going to work especially seeing as it is into a black hole (debt will never be paid).
I sought to get legal help but with no court or settlement fee because im in debt Solicitors don't seem too interested to even send letters for me. I even tried to get advice from a free legal aid centre(useless)

Out of desperation I contacted the solicitors representing my creditor and they spoke with me briefly and said to make a full and final settlement offer and asked for a statement of means as part of that and provide supporting documents.

Before i ever mentioned a sum the solicitor named an amount to me to make as a suggestion which is the sum i was also thinking I could reasonably make with loans from family.



Question: what sort of supporting docs should i send.
Bank statements, credit card bills, phone bill etc?

In the past few months i have really cut back on expenses and we have been using my wifes savings a bit so my current account doesnt show all the spending.
I dont want to really start sending them my wifes bank details as this debt was all my own.

The real alternative to me not having an offer accepted is either bankruptcy or emigrating to china.

So Im hoping i can get some advice on how to deal with them and what to give and what not give.

thanks for reading this if you made it this far.

Hello,

It's hard to know exactly what the solicitors would want. The statement of means will be an income and expenditure budget. This just needs to be two lists, one of monthly money in and one of monthly money out.

Photocopies of payslips should be enough to prove income. If they want proof of your outgoings then you can photocopy the statements which show bills being paid and black out the confidential bits with marker pen (leaving just the relevant lines showing bills going out). As long as you put an explanatory note in you should be fine.

The reason for them asking for this is that they want to know what kind of monthly payment you can afford. They're more likely to accept a settlement if your budget shows it'll take ages for the debt to be paid by installments.

As always with full and final settlements, make sure any agreement is confirmed in writing before sending any money over.

Kind regards

James

DBB_22

I am currently in the process of negotiating full and final settlement with my creditors via my Debt Management company.

I have an account with Cabot that has a default that expires on 10 July 2013. If I part settle now will the default still drop off in July?

Will there be any negative impact should I part settle prior to the default expiring or waiting for it to expire and then part settling?

I keep hearing that if I part settle prior to expiry that the default will sit there for another six years.

I don't want to damage myself for another 6 years for the sake of a few hundrew quid. On the other hand...I could do with a few hundred quid!

Last ever question – I promise. I should be out of the DMP by end of next week!

StepChange_James

DBB_22 wrote: »

I am currently in the process of negotiating full and final settlement with my creditors via my Debt Management company.

I have an account with Cabot that has a default that expires on 10 July 2013. If I part settle now will the default still drop off in July?

Will there be any negative impact should I part settle prior to the default expiring or waiting for it to expire and then part settling?

I keep hearing that if I part settle prior to expiry that the default will sit there for another six years.

I don't want to damage myself for another 6 years for the sake of a few hundrew quid. On the other hand...I could do with a few hundred quid!

Last ever question – I promise. I should be out of the DMP by end of next week!

Hello,

Great news about nearly being debt free, congratulations!

There's a good article on Experian's website about how full and final settlements affect your credit rating: http://www.experian.co.uk/consumer/questions/askjames261.html

In terms of the default notice, it should be updated when the debt is cleared to show that it is no longer an ongoing debt.

The settlement shouldn't add another six years to the default notice. It should just drop off six years from it being entered.

If you're feeling a bit nervous you could contact the company yourself and ask them what information they're going to put on your credit history as part of the settlement. If you do, I'd suggest making sure they won't issue a new default notice. It would be strange for them to do this but if they did it would mean another six years on your credit file.

Good luck for the future.

James

jennlily

Hello All,

My husband and I joined Step Change in 2004. It was going well in the early years but then 2008 happened! My husband lost his construction designing job, and was out of work for 6 months. He re-trained with British Gas and we are very lucky, however in the time he lost his job, we had 2 boys (now have a little girl too) and they still needed things. I was working round the clock but it obviously wasn't enough. So yes catalogue's, Vanquis credit cards helped us cope. We shouldn't have been accepted but was! To cut a long story short, We now pay £161 to Step Change, £300 to catalogue and £220 to Vanquis per month. This is close to £700 a month, and were struggling, would an IVA be the answer, (Debt Free Direct keep hassling me) our debts total £26,000. I am waitressing at the mo, but I do have a conditional offer from University to start March next year, its for adult nursing and I have to give up my job as it's needs 100%. Our situation as I see it is going to get worse, especially as our Child Tax Credit seems to have been cut too.
Any help much appreciated
Kind Regards
Jennie Brown

StepChange_James

jennlily wrote: »

Hello All,

My husband and I joined Step Change in 2004. It was going well in the early years but then 2008 happened! My husband lost his construction designing job, and was out of work for 6 months. He re-trained with British Gas and we are very lucky, however in the time he lost his job, we had 2 boys (now have a little girl too) and they still needed things. I was working round the clock but it obviously wasn't enough. So yes catalogue's, Vanquis credit cards helped us cope. We shouldn't have been accepted but was! To cut a long story short, We now pay £161 to Step Change, £300 to catalogue and £220 to Vanquis per month. This is close to £700 a month, and were struggling, would an IVA be the answer, (Debt Free Direct keep hassling me) our debts total £26,000. I am waitressing at the mo, but I do have a conditional offer from University to start March next year, its for adult nursing and I have to give up my job as it's needs 100%. Our situation as I see it is going to get worse, especially as our Child Tax Credit seems to have been cut too.
Any help much appreciated
Kind Regards
Jennie Brown

Hi Jennie,

£700 a month over a five year IVA would work out to a total of £42,000 you paid in - so an IVA might not be a good idea based on your current circumstances because you'll pay back more than you owe.

Obviously it sounds like things are likely to change with your finances soon, so it's probably worth reviewing your situation when you know what your income will be as a student nurse.

An IVA might become an option then but I'd recommend talking to a few companies before going ahead with it.

I'd also suggest you give us call and explain about the situation with these two extra debts. We'll be able to review your finances and work out how to proceed.

Kind regards

James

mysterio1727

Hello MSE

Myself and husband are in a state with our finances. Im going to be as honest and up front as possible. We have credit card debts and combined the total is a whopping £35k.
There are 11 credit cards in total:

HIS
Lloyds 2933.32 (interest on this one)
Nationwide 2387.20
Tesco 5852.21 (interest on this one)
Marks & Spencer 1849.04
Virgin 5304.86 (interest on this one)
MBNA 6958.34

HERS
Tesco 2403.09 (interest on this one)
Bank of Scotland 1494.24 (interest on this one)
Nationwide 1850.17
Santander 1094.44
Virgin 2843.00 (interest on this one)

We pay around £700 a month alone in paying these off. We have 3 kids, have never missed a payment on our mortgage (repayment) with nationwide, and I am failing to see any light at the end of the tunnel in getting out of the above credit card debts.
My partner has recently tried applying for a Barclaycard to switch one of the ones that has interest being applied but has been unsuccessful.

We earn jointly 43k a year, our mortgage is currently following just above the bank of England base rate as I mortgage deal has not long ended so our payments are approximately £550 a month. We have the usual bills, gas, water, c/tax, elec, tv licence, kids activities, wraparound care, car insurance and car tax, home phone, mobiles, life insurance, home and contents, income protection, and my husband pays csa for his son.
I did consider bankruptcy for us but was unsure if we would lose our house or cars (we have 2 that are worth combined about 4k). Would this be the right way to go?? I cant risk losing the home with having 3 kids.
Then I considered just moving house?!
Our mortgage outstanding is about 117k and I am confident we would get at least 156k for our home - my thought was to pay off the debt with what money we made on the house?? I have no idea where to turn to for advice, how to start getting out of this mess, please, please, please would you be able to help.
Our house was in the process of being gutted as it was a real mess but we have no money each month to do this up now as its all going on credit card repayments. I cant sleep because I worry so much about it and feel anxious a lot of the time too. I spoke to our bank who we have the mortgage with and was told that they wouldn't come out to revalue the house that we bought 4 years ago so we couldn't put the debt onto the end of the mortgage. We also had a call from a financial advisor to say there was nothing he could do for us.

Any sound advice is greatly appreciated, thank you.

excelsiors

I posted this in my own thread, but I figured it couldn't hurt to repost it if actual debt advisors frequent this thread. Hope this is not considered rude, just very worried!

Hi there,

I have very severe bipolar and anxiety disorder and am on a DMP which is going well. Halfway through. My debts are getting cleared well. Unfortunately, I also have an overdraft with the dreaded HSBC.

(I have a parachute account with the Co-Op that I use for my day to day stuff and I love it.)

In 2004, I had a serious nervous breakdown. HSBC, during that time, passed my credit card on to Metropolitan (who I now know are just HSBC's bullies) who hounded and bullied me, while I was in a psych hospital and recovering, to pay a huge amount I barely afforded until (THANK GOD) I cleared the debt. Their bullying nearly drove me to suicide.

Anyway, recently I started getting letters from HSBC telling me I wasn't paying enough into my account to justify the OD limit -- fair enough, I probably wasn't.

I called up and set up a six month plan with their -- very reasonable, to be fair -- money management team about clearing the OD. They have suspended debit interest for 6 months so I can clear the OD and want a set amount paid in every month. I was happy with that, and felt I was well on track with my debts. I have stuck to this plan to the letter since setting it up.

I was most dismayed (and sick, and anxious) to get a letter this Saturday from HSBC telling me that in order to maintain my current OD, it is recommended that I pay in 290.00 a month. This is TOTALLY different (like, ten times bigger!) to my plan with the money management team. When I called customer services, they also said they could see that I'm on a plan with the money management team that's still valid but could not explain the letter. Apparently nobody who works on a Sunday could explain the letter or do ANYTHING.

Given my past treatment with HSBC, I am terrified. I am going to call the money management team in the morning but can anybody tell me -- is this new letter (which is an unpersonalised, form letter that recommends and does not demand) likely to be a vague nastygram churned out in the hopes of squeezing a few extra quid from someone by a computer that's not aware I'm on a plan with the money management team?

As I'm sure you can appreciate, given my treatment by Metropolitan (who HSBC can say they're different from all they like, but I know the truth -- HSBC bullied me back then) in the past, this is already starting to make me ill.

Cheers for reading and hope you can give me some advice/words of comfort.

StepChange_James

mysterio1727 wrote: »

Hello MSE

Myself and husband are in a state with our finances. Im going to be as honest and up front as possible. We have credit card debts and combined the total is a whopping £35k.
There are 11 credit cards in total:

HIS
Lloyds 2933.32 (interest on this one)
Nationwide 2387.20
Tesco 5852.21 (interest on this one)
Marks & Spencer 1849.04
Virgin 5304.86 (interest on this one)
MBNA 6958.34

HERS
Tesco 2403.09 (interest on this one)
Bank of Scotland 1494.24 (interest on this one)
Nationwide 1850.17
Santander 1094.44
Virgin 2843.00 (interest on this one)

We pay around £700 a month alone in paying these off. We have 3 kids, have never missed a payment on our mortgage (repayment) with nationwide, and I am failing to see any light at the end of the tunnel in getting out of the above credit card debts.
My partner has recently tried applying for a Barclaycard to switch one of the ones that has interest being applied but has been unsuccessful.

We earn jointly 43k a year, our mortgage is currently following just above the bank of England base rate as I mortgage deal has not long ended so our payments are approximately £550 a month. We have the usual bills, gas, water, c/tax, elec, tv licence, kids activities, wraparound care, car insurance and car tax, home phone, mobiles, life insurance, home and contents, income protection, and my husband pays csa for his son.
I did consider bankruptcy for us but was unsure if we would lose our house or cars (we have 2 that are worth combined about 4k). Would this be the right way to go?? I cant risk losing the home with having 3 kids.
Then I considered just moving house?!
Our mortgage outstanding is about 117k and I am confident we would get at least 156k for our home - my thought was to pay off the debt with what money we made on the house?? I have no idea where to turn to for advice, how to start getting out of this mess, please, please, please would you be able to help.
Our house was in the process of being gutted as it was a real mess but we have no money each month to do this up now as its all going on credit card repayments. I cant sleep because I worry so much about it and feel anxious a lot of the time too. I spoke to our bank who we have the mortgage with and was told that they wouldn't come out to revalue the house that we bought 4 years ago so we couldn't put the debt onto the end of the mortgage. We also had a call from a financial advisor to say there was nothing he could do for us.

Any sound advice is greatly appreciated, thank you.

Hello,

Thanks for posting. I'm glad you've found us, as it sounds like you really need some advice now and we can help you with that.

If you both went bankrupt then it would deal with the debts but because you've got equity in your property it's likely the house would be affected. Also your cars would probably be sold (depending on their individual value).

If the official receiver (the person appointed by the courts to deal the the practicalities of bankruptcy) thought you needed a car they may let you buy a cheap one out of the sale proceeds then they'd take the difference.

So that makes bankruptcy maybe a less attractive solution but there are lots of different ways to get out of debt and we can give you advice about what would suit you best.

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

StepChange_James

excelsiors wrote: »

I posted this in my own thread, but I figured it couldn't hurt to repost it if actual debt advisors frequent this thread. Hope this is not considered rude, just very worried!

Hello,

It's absolutely fine to copy over your question, we're alwasy happy to try and help.

I'd echo the advice you received over on the other thread, if you've got an agreement in place and have stuck to it there's a good chance the letter could be computer generated and sent by mistake.

You're right to check this with HSBC though, to make sure they aren't trying to change the agreement you've got set up with them.

I'd suggest talking to your DMP provider about this debt too. As DMPs will usually take up all of your disposable income, it makes me think that the payments you make towards this debt must be coming out of the money you need for your own personal expenses.

Our experience is that DMPs work best when all credit debts like this are included in the plan as everyone gets fair treatment and you don't have the worry of dealing with them directly.

Hope this helps.

James

kdronan

Hi,

What happens if a creditor wont deal with a third party debt management company, such as StepChange?

Regards,