StepChange plan?

lisa1986

Hello

I am just wondering if anybody can give me some advice A few months ago i had to stop work due to a medical condition, I have 2 credit cards and a littlewoods and very account which i was paying monthly fine with no problems while i was working, However now i am no longer working i am claiming ESA and i am now unable to cover all my minimum payments.

I have been covering both credit cards fine but not the little woods and very account. I have spoken to stepchange who are willing to give me a debt plan that fits in my budget, it all sounds great, they told me they will make an offer to my creditors and its not guaranteed they will accept.

Now i am wondering why my credit card creditors would accept when i have been making the minimum payments, Why would they agree to accepting a lesser payment if i am currently paying them? I can see littlewoods and very accepting. Now another thing is step change have told me to cancel all direct debts on my debts? This has left me confused would it not be better to wait until the debt plan is all accepted etc? This is my first experience with anything like this and i am a little unsure what to do, stepchange seem great so far but i would just like a second opinion.

National_Debtline

Hi Lisa

I don’t think you need to worry. Stepchange’s payment proposal will be based on a realistic financial plan, and will also show each creditor is being offered their fair pro rata share of your available money. It should be clear that you can’t afford the contractual minimum payments, and Stepchange will demonstrate that the offer they are making is fair for each creditor.

It’s not unusual for some people to pay certain debts and not others before they start a DMP, but then suddenly have to make reduced payments once the DMP starts.

Your credit file is going to marked with a default at some point once you start the DMP so cancelling your direct debits for debts shouldn’t make a difference. Creditors need to allow time for someone to take advice once they’ve said they’re having financial difficulties and are seeking advice. I suggest letting your creditors know you’re dealing with Stepchange and setting up a DMP. You can do this in writing based on the following template:

www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

James
@natdebtline

sourcrates

Hi,

Ideally you should stop all unsecured credit payments straight away.

Save up a little emergency fund, if your not working, you shouldn't really be paying anything, as benefits are not really for debt repayments, there for your wellbeing.

How much do you owe ?
Are you a home owner ?
Do you have any assets ?