Finally rang Step Change

Rooster01

I have finally took the courage to contact Step Change who were extremely professional and very understanding, didn't once judge me for the amount of debt I owe. I had been managing until I was off sick for 3 months and things more or less went down hill from there. I had already set up payment plans with both Halifax and Nationwide, Very and Littlewoods have been understanding and it was Very who asked me to contact Step Change. Very arranged to ring me back and the advisor informed me it was the best decision I've made. I'm concerned about a few things.........Lloyds I've banked with for a number of years and currently have overdraft in place plus morgage. Step Change have advised me to change banks......I'm also concerned about creditors using debt against my house as I currently own £28,000 but house is worth £177,000. This is a joint morgage and my wife has excellent credit rating with hardly any debt and pays credit cards off in full each month, she is not included in the DMP so worried about her credit rating and fixed morgage deal when it comes up for renewal in 4 years time. Step Change informed me it will take 5 years and 2 months to repay debts.....How do creditors react to DMP?

Pixie5740

If you have a joint mortgage with your wife then the two of you are financially linked. Your DMP is going to have a negative impact on her credit file.

National_Debtline

Hi Rooster01

Rooster01 wrote: »

I have finally took the courage to contact Step Change who were extremely professional and very understanding, didn't once judge me for the amount of debt I owe. I had been managing until I was off sick for 3 months and things more or less went down hill from there. I had already set up payment plans with both Halifax and Nationwide, Very and Littlewoods have been understanding and it was Very who asked me to contact Step Change. Very arranged to ring me back and the advisor informed me it was the best decision I've made.

Well done on picking up the phone and seeking advice.

Rooster01 wrote: »

I'm concerned about a few things.........Lloyds I've banked with for a number of years and currently have overdraft in place plus morgage. Step Change have advised me to change banks......

The advice StepChange have given you about changing bank accounts is standard and nothing to be concerned about. You should keep your income in a separate place from any unsecured debts you have, otherwise a creditor may be able to dip in and help itself - this is sometimes known as "offsetting".

It doesn't matter that you will be using a bank that is not your mortgage lender.

Rooster01 wrote: »

I'm also concerned about creditors using debt against my house as I currently own £28,000 but house is worth £177,000.

The debts in your (pending) DMP are unsecured, remember. At worst, they may go to court and seek "Charging Orders" as security for their debts. However this will not jeopardise your property in practice, as all they would be getting are "restrictions" on your stake in the home.

Rooster01 wrote: »

This is a joint morgage and my wife has excellent credit rating with hardly any debt and pays credit cards off in full each month, she is not included in the DMP so worried about her credit rating and fixed morgage deal when it comes up for renewal in 4 years time. Step Change informed me it will take 5 years and 2 months to repay debts.....

Yes, the two of you are finally "connected" so this may have some effect on your wife's creditworthiness. However in all honesty I think that right now, it is best to focus on getting your debts under control rather than worrying about a remortgage four years down the line.

Rooster01 wrote: »

How do creditors react to DMP?

StepChange may get a mixed response initially - some creditors take longer to come on board than others. However their track record of setting up sustainable arrangements is very good. Creditors would rather you were using a free debt management service than paying someone a fee or doing nothing at all.

Dennis
@natdebtline