Struggling with debt? Ask a debt adviser a question

cheesypuff

Hi
I sent a PM to the Stepchange private messages box yesterday would anyone be able to answer me? I’m suffering awful anxiety st the moment

StepChange_Allen

CoxxyB wrote: »

NatWest £8140 - minimum £178.47
MBNA £12,561 - minimum £322.46
Barclays £9260 - minimum £202.37
TOTAL £29,961

Hello - looking at the above makes me shudder..... I wonder what my chances are in contacting each company and letting them know that we are struggling to make the minimum payments. We have never missed a payment or had any late charges added. The cards are solely in my name but the debt is shared between me and my husband. I am more than happy to pay what I can afford (I am going to put together a list of incomings and outgoings) but I don't want to enter into a DMP if at all possible. I have cut up NatWest and MBNA - but my husband has been using the Barclay card and i've told him he needs to stop using it to bridge gaps.... I appreciate that contacting the card companies letting them know my situation will impact on my credit rating, but is contacting them first explaining that I cannot afford to pay minimum better than not paying them at all? I hope this paragraph makes sense..... Can somebody give me some advice please?

Hi there

Welcome to the forum and thanks for posting.

In theory, you need to stick to your minimum payments in order to keep your original agreement going and avoid your credit file being affected. I say in theory because sometimes people advise me that their credit card company has temporarily reduced payments for them and helped in some way. But unless these payments can go back up to the minimum in a certain time, then a debt solution may be required.

You could start off by speaking to the creditors to see if there's anything they can do, but they may refer you for debt advice from someone like ourselves. What I would definitely say is that communicating with your creditors is a very good thing if you're struggling. Contacting them itself doesn't affect your credit rating.

If you'd prefer, or if the above doesn't work, you can register with us either online or over the phone and see what advice/options we can give. There's no obligation to go ahead with anything we recommend so there's nothing to lose. Details can be found here: www.stepchange.org/Contactus

I hope this is helpful.

Allen

StepChange_Allen

cheesypuff wrote: »

Hi
I sent a PM to the Stepchange private messages box yesterday would anyone be able to answer me? I’m suffering awful anxiety st the moment

Hi there

Thanks for posting.

I'm sorry to hear that you're suffering from anxiety at the moment. I hope you have some support for that but if not, please contact your GP.

An advisor is going through our private messages as quickly as possible today, so please bear with us and we'll be in touch.

Best wishes

Allen

CoxxyB

I will contact them and see what they say.... I may be in touch again depending on the outcome!
Thanks again

bdl89

Hi:

My wife and I, without really knowing what we were doing, refinanced our mortgage and took on a line of credit to take on a major renovation. After the refinance paid out part of the debt, we were left with an overall LOC debt of +$20 000.

A year ago, I converted that LOC debt to a personal loan at a lower interest rate. It was a "blended" payment arrangement, where interest and principal payments remain the same (adjusted yearly with interest rate changes and early payments factored in). We now have a balance of around $17 500.

We are tired of being in debt, and looking to get out as fast as possible. With that in mind, I took a couple of actions (included are some relevant details):
--applied for, and received, a balance transfer credit card with 0% interest for 10 months. (1% transfer fee on any balance transferred). It has a credit limit of $8000.
--converted the loan back to a line of credit, with a 1% lower interest rate (7.86%). Seems puzzling, but with the LOC, we aren't forced to make the blended payment of $415.63 to the loan each month.
--the above seems risky, I know, but it gives us the flexibility to transfer a balance to a lower interest option and pay down as much debt as possible at a lower interest rate, while not being forced to make $415 in blended payments at a higher interest rate.
--we have become strict budgeters, and are committed to paying $600 towards paying down debt each month going forward.

With this in mind, I'm still a bit confused as to the best approach. Do I:
a) transfer $8000 (credit limit) of LOC to the transfer card, and pay down $600/month for 10 months, than transfer remaining balance back to LOC.
b) transfer $6000 (10 months x $600/month) to the balance transfer card, and pay that off in its entirety over 10 months.
c) some wiser option I'm not thinking of?

Am I off base in thinking that we will save substantially if we do this, and remain committed to $600 per month? What would my savings be like?

No matter which option, we will transfer at the end of the 10 month 0% interest period, either back to the LOC, or to another, similar 0 or low interest balance transfer card.

Anything I should keep in mind, or further advice?

CoxxyB

CoxxyB wrote: »

I will contact them and see what they say.... I may be in touch again depending on the outcome!
Thanks again

I spoke to MBNA this morning who were really understanding and sympathetic and helped me find a solution - It wasn’t an easy call to make but I feel so relieved that the person on the end of the phone was patient, understanding and willing to help..... I’ve had interest frozen for 7 months and payments reduced - the breathing space that gives to apply myself to get myself on the road of recovery is such a relief.... thank you to Step Change advise on here and website.

Dannyt1979

hello, i could really do with some advice I had taken out a second mortgage with Nemo personal finance about 12 years ago. myself and my then wife split up, she declared herself bankrupt and I was left with the debt. the house was repossessed and we had a shortfall on both the mortgage and the debt with Nemo. fast forward to now and I haven't paid anthing of what was left 41k plus I haven't had any requests for payment. I do receive a statement monthly but I have not contacted them since 2012. my life has changed now i have a good job 4 kids and want to move on with my life but I have this debt and I don't know what to do for the best. do I contact them and start payments or do i leave well alone? I want to be in a good financial possision and to get a new house in the future but I don't know what to do?

Bevtherev

Hi, My partner & I just need advice on how to consolidate our debts. We owe about £30k in credit cards and overdrafts. We run our own business (it’s in my partners name only). It is established and has been running for 20 yrs. our mortgage repayments are £210 a month. Our house is worth £200k or probably more. We have 12 years left on our mortgage to pay.
We think the best thing to do is to borrow the money against our house.

However, I have a bad credit rating and despite having a joint mortgage I’m not sure we will get a new mortgage due my bad credit rating.

Despite earning good money, all we do is pay bills and debt every month, with hardly anything left to spend on ourselves.

My question is will an independent mortgage broker be able to find us a mortgage? Our bank have said to make an appointment with their mortgage division but I’m sure they’ll say no because of my bad credit rating

I would appreciate any advise you can give us in the best way to deal with our debt.
Many thanks

StepChange_Rachael

Hi

Thanks for your post.

Just to let you know, as you’ve put the $ sign next to the payments. We can only advise of debt within the UK. If the debts are non UK debts we’d advice seeking debt advice or financial advice within the country you reside.

If the debts are UK debts then the advice is as follows. In terms of repaying the debt, if you feel the minimum payments are affordable and this isn’t causing you to struggle or get into further debt that finding the cheapest interest products and paying as much off as possible can be the best option. This will mean you’re not defaulting on the debt, a default opens up the possibility of further action from the creditors.

When it comes down to what process is best from the ones you’ve listed then you might be best seeking advice from a financial advisor. As a debt advisor we’d look to advise on alternative debt solutions and make recommendation of the best way forward when minimum payments are no longer affordable. Rather than be able to provide advice on products.

However, if you are struggling to meet these high payments it doesn’t always prove the best option to continue balance transferring. Sometimes it can lead to further debt: although I can see that you have been reducing the debt overtime.

If you feel this is the case you can access advice using our online Debt Remedy tool.

Thanks
Rachael

bdl89 wrote: »

Hi:

My wife and I, without really knowing what we were doing, refinanced our mortgage and took on a line of credit to take on a major renovation. After the refinance paid out part of the debt, we were left with an overall LOC debt of +$20 000.

A year ago, I converted that LOC debt to a personal loan at a lower interest rate. It was a "blended" payment arrangement, where interest and principal payments remain the same (adjusted yearly with interest rate changes and early payments factored in). We now have a balance of around $17 500.

We are tired of being in debt, and looking to get out as fast as possible. With that in mind, I took a couple of actions (included are some relevant details):
--applied for, and received, a balance transfer credit card with 0% interest for 10 months. (1% transfer fee on any balance transferred). It has a credit limit of $8000.
--converted the loan back to a line of credit, with a 1% lower interest rate (7.86%). Seems puzzling, but with the LOC, we aren't forced to make the blended payment of $415.63 to the loan each month.
--the above seems risky, I know, but it gives us the flexibility to transfer a balance to a lower interest option and pay down as much debt as possible at a lower interest rate, while not being forced to make $415 in blended payments at a higher interest rate.
--we have become strict budgeters, and are committed to paying $600 towards paying down debt each month going forward.

With this in mind, I'm still a bit confused as to the best approach. Do I:
a) transfer $8000 (credit limit) of LOC to the transfer card, and pay down $600/month for 10 months, than transfer remaining balance back to LOC.
b) transfer $6000 (10 months x $600/month) to the balance transfer card, and pay that off in its entirety over 10 months.
c) some wiser option I'm not thinking of?

Am I off base in thinking that we will save substantially if we do this, and remain committed to $600 per month? What would my savings be like?

No matter which option, we will transfer at the end of the 10 month 0% interest period, either back to the LOC, or to another, similar 0 or low interest balance transfer card.

Anything I should keep in mind, or further advice?

neilied

Hi all and thanks in advance.

Over the last 6 years I have managed to amass £15k across 3 credit cards. This was a change in income and mostly spend on a few large bills and day to day stuff.

I am currently treading water on this and have been for 2 years. I ensure I pay on time and none are in default however it is a huge financial strain and getting me very depressed. I have a new job, I have a future option of getting a p/t 2nd job to help. We are also getting some UC top up which helps. 1 provider is my main bank and the apr is great, in fact under 7% but I have the other two over 20%. My bank won’t up the limit, loans due to rating as I’m 90% utilised on card won’t offer a competitive loan rate. Looking for options to get a handle on this but I do not won’t to damage my credit as it is on the up! I would be so grateful for any advice

Thanks

Neil