StepChange Advice

dacdesigns

Hi,

I have contacted StepChange today after being advised by a friend to give them a call.

I have over 12k in debts, 2 credit cards, bank loan and overdraft, all maxed out. I am struggling to pay them on top of our other bills. They have advised me to open a standard bank account and transfer my priority bills and wages across and not to pay any none priority debts. I have to wait a week and half to have the main phone call with one of there advisors, which will then tell me what the plan is but the problem is most of my payments are due in the next few days and I'm worried that I might not like what they have planned. I have never defaulted on any payments and it just seems like I'm defaulting before I know what's what.

What to do?

I need also a basic bank account that has nothing relating to natwest or barclaycard, anyone have any recommendations?

Thanks.

fatbelly

Hi

Sounds like standard advice so far to someone who can't meet the contractual payments on loans and credit cards.

The advice will probably be a debt management plan unless you meet the criteria for a debt relief order.

Presumably the monthly payments for the loan and credit cards come from the overdrawn current account that you will not be continuing to use. You could allow the payments to go out this month if you haven't decided what to do yet. But you still need your income to be going into a new account unconnected to any of your debts.

mum2one

Youve taken the hardest step, I've been with stepchange for over a year now, and theyve been really helpful.

1st - Cancel all of the direct debits you have coming out of your old account, esp with there being an overdraft on it.

2nd - Open a new bank account - if your debts all relate to natwest or barclays then (off top of my head) Nationwide, Santander, Halifax - just a basic current account - no overdraft

3rd - Dont know how ur incomings are - but contact who ever pays you and arrange for wages, benefit payments etc to go into new account.

4th - Your payments that are due in next few days -I'm guessing the amount they want isn't what you have - pay a token amount.

5th- When youve spoken to stepchange (the advisors are lovely) there go through your budget with you, and your income/outgoings debts etc - it takes about a month to get set up, so it could be your need to make your own arrangements for oct's payments

6th - when you go through stepchange - your have a template letter for your creditors - you copy it and send it to each of your creditors - basically says your Seeking debt advice, your not in a position to pay full payment and your enclosing a token payment (even if it is £1/ £10 ) this then buys time as its telling your creditors that you are seeking help, your not burying your head in the sand. if you do get any calls from your creditors - just say your dealing with stepchange - to be honest if you haven't defaulted yet, there unliable to contact you - more just the standard "your payment was short last month" - which by then you would have your telephone call with stepchange and your know what path your on.
xx

dacdesigns

Wow thanks for the quick replies, great ones at that! would the post office be recommended for a basic account or should I stick with one of the big name banks?

dacdesigns

May I ask about these tokens? I have a natwest loan which is set up as a direct debit from my natwest current account, if I cancel the direct debit how do I make a token payment?

fatbelly

A post office card account (POCA) is OK for those on benefits who want to withdraw cash and work using cash.

If Stepchange set up a dmp, you will pay them via standing order, and you may have other D/Ds or S/Os that you want to continue, so you'll need a basic account with a mainstream bank. You may also want a debit card, which Santander don't provide on a basic account.

Halifax (Visa Electron may be a problem), Nationwide, even Lloyds would be OK.

Co-op is well liked on here.

dacdesigns

I noticed that the Co-op is talked about a bit, they have nothing to do with NatWest or Barclays? I was told by SC that Halifax has?

dacdesigns

Update:

I have had my call with Step Change today and they have advised I should apply for a debt relief order, however I own car worth maybe just over 1k and a caravan, which are classed as assets, so they then advised I go bankrupt. I couldn't believe what I was being told, I didn't realise how bad my situation had gotten. I asked about going on a DMP but was told I can't because there is no free money, I really don't want to lose my car and caravan. I have managed to agree a DMP of £100pm split across 5 creditors for the next 10 years. This is only because my partner has agreed to give me some extra money per month and I have just scrapped in a DMP. Looking at my outgoings, I'm still left in a pickle and not much room to breath, would you say I'm better biting the bullet and going bankrupt?

Thanks.

fatbelly

dacdesigns wrote: »

I noticed that the Co-op is talked about a bit, they have nothing to do with NatWest or Barclays? I was told by SC that Halifax has?

Co-Op is independent of the other groups

Surely stepchange didn't say that Halifax is linked to Natwest or Barclays? They're not. They are part of the Lloyds group.

dacdesigns wrote: »

Update:

I have had my call with Step Change today and they have advised I should apply for a debt relief order, however I own car worth maybe just over 1k and a caravan, which are classed as assets, so they then advised I go bankrupt. I couldn't believe what I was being told, I didn't realise how bad my situation had gotten. I asked about going on a DMP but was told I can't because there is no free money, I really don't want to lose my car and caravan. I have managed to agree a DMP of £100pm split across 5 creditors for the next 10 years. This is only because my partner has agreed to give me some extra money per month and I have just scrapped in a DMP. Looking at my outgoings, I'm still left in a pickle and not much room to breath, would you say I'm better biting the bullet and going bankrupt?

Thanks.

How could they advise a DRO without considering your assets? If the car is worth less than £1000 (it might be - have you checked an online site like Parkers or Wisebuyers?) and the caravan worth less than £300 then you could qualify - if also your debts are less than 15k, your surplus income less than £50 per month and you are in rented accommodation.

Bear in mind your car is depreciating like a stone - and are you making much use of that caravan?

Surely you are not saying that Stepchange has persuaded you to get your partner to cough up £100 per month so you can meet their artificial minimum of £100 per month and enter into a ten-year dmp !?

Could you perhaps have a chat with National Debtline? Or find out if your local CAB has any specialist debt advisers, perhaps on the F2F scheme?

dacdesigns

Caravan is our pride and joy, our only means of a break. It's worth about 3k maybe. It is my partners as well but I bought it in just my name, so not sure what would happen there and I believe I can't give it away?

I was the one who mentioned the £100 so we could agree a DMP, basically because I couldn't swallow what he was saying about going bankrupt. I honestly thought my situation wasn't that bad.

I think the Halifax comment was bad advice on there part lol.

I really feel this DMP isn't going to be right for me and worried that I will have 10 years of hell. I'm really not sure what to do.

Issuma

Hi Dacdesigns
There is another option if you feel up for the challenge, you could self manage your own DMP, it might be a good idea first to post your Statement of Affairs on here and let all the good people see if there is anywhere that some changes could be made that may free up a bit more money each month.

I was in a similar situation but we did have enough spare money each money to qualify for a DMP but I'm in a share save scheme at work which I wanted to stay in, my plan is when my shares mature I use this money to pay off my debts (it's like a savings account in a way) but with StepChange they wanted me to come out of this to free up the money that I pay in each month, so because I didn't want to do this I decided to do manage my own DMP and evertything has been fine, my debt is a lot more that yours but we have managed to get our creditors to freeze the interest and we have managed to pay off over 20K in 2 years.

Good luck in whatever you decide to do, if you want any help regarding self managing just give me a shout !!