Struggling with debt? Ask a debt adviser a question

StepChange_Rachael

Hi

Welcome to the forum and thanks for posting.

I can understand you’d be feeling stressed, it can be hard to find the best way forward especially if someone else is relying on your support. It’s really going to come down to your brothers affordability, I wouldn’t be able to advise on which to pay first that would reduce his charges without knowing the full picture. If you brother pays the overdraft first for instance, I don’t know how much he's likely to be charged once his credit card stops being 0% interest.

If your brother is struggling to find a way to pay back the debt and is asking for help I’d suggest he speak with a free debt advice organisation like ourselves at StepChange, that way your brother will be able to access his options based on his budget and expected changes, and be able to work out a feasible plan to reduce the debt affordably. Here you can find a link to the online self-help tool Debt Remedy.

I hope this helps.

Thanks
Rachael

anniemals wrote: »

Hi - i'm trying to help my brother to get out of debt.

He is £6k in debt on a credit card (Barclays, 0% interest until May this year), and £1.6k in his overdraft with Nationwide (£20 a month for the overdraft).

I'm planning to move his debt to another interest free card in May, but that's likely Aqua, which means only 6 months more (which is not nearly long enough for him to pay it off).

Which is he best paying off first? Should he focus on reducing his credit card debt and just take the hit on the £20 per month overdraft fee? Or try and get out of his overdraft? He never goes beyond his overdraft limit, he just lives in it perpetually.

I'm finding it very stressful to try and help him because I'm younger than him, and I have never had money issues myself, so this is all very new for me.

Thank you for any advice.

virin96

Hello,

I currently have a £500 OD limit with lloyds and Monzo bank each. I am about -£470 with lloyds and -£490 with Monzo and also a credit card bill of £290 that I need to pay off. I have that debt because of uni, etc. So total debt roughly is £1300 (whole months salary). I just started my new job last Monday and will earn around £1,300 monthly. I live with my dad and grandma so I am rent free and just help out with groceries £50-£100 a month plus my spending which is about £100-£200 a month. Is it better to pay it all off in one go and then go back into overdraft for another month but finally be in credit come end of April (next payday)? Or should I pay back the debts month by month (100 a month for each bank)? My wages will also be paid into my lloyds account end of March, so should I maybe open another account and have my wages paid into that account? Thanks.

160990sl

So I have debts of

Credit card 1 =£1500 26% monthly payment £45
Credit card 2 =£1500 17% monthly payment £30
Loan 1 = £1972. 25% monthly payments £65
Loan 2 = £1654. 18% monthly payments of £110

After all bills etc have £100/£150 spare

Which would you advise paying off first/ highest apr/ biggest amount/ biggest monthly payment so then can put more in to paying off other ones

Tried debt consolidation but apr is ridiculous and with credit score no one would accept me.

fatbelly

160990sl wrote: »

So I have debts of

Credit card 1 =£1500 26% monthly payment £45
Credit card 2 =£1500 17% monthly payment £30
Loan 1 = £1972. 25% monthly payments £65
Loan 2 = £1654. 18% monthly payments of £110

After all bills etc have £100/£150 spare

Which would you advise paying off first/ highest apr/ biggest amount/ biggest monthly payment so then can put more in to paying off other ones

Tried debt consolidation but apr is ridiculous and with credit score no one would accept me.

Clear credit card 1, then ask if they are doing a 0% BT offer before you close the account. If so, you can move the card 2 balance across and kill the interest for a 4% fee

Tryingtobedebtfree

Looking for a bit of advice. I had an old council tax debt where I failed to keep up with the arrangement direct with the council. They passed the debt on to Borstow Stutor. They are a nightmare to deal with and only an 0i71 number to contact. I have been in regular contact to make arrangements to pay but they refused my offers. I recieved around £50 in wages and £46 tax credit. Rent and ctax are £65 a week so struggled to offer any more than £5 a week. They added their £75 and said they would take the lower offer but the refused it again. I've been to my MP for help who has written to them but 7 days after the last contact today they have sent a balif. I didn't answer or let them in but the 101 bill is now 527!!. Any help or advice will be great. Thanks in Advance

StepChange_Allen

KDC80 wrote: »

Please help me as I’m getting myself into a debt hole and don’t know how best to get out of it!
So my mortgage is coming to the end of its 5 year fixed term, and the new variable rate is 0.7% higher than the fixed rate. I’d like to fix it again, but I have a lot of credit card debt left over from my divorce 4 years ago that I’m struggling to shift.
I have 5 credit cards, they are heavily utilised. I have one using 34% of available balance, the other four are between 77% and 98% utilised which is doing no favours for my credit rating. All are now charging interest but I’m scared to apply for a balance transfer to new card for fear of being turned down because of my credit rating and the further impact that would have on my already low score.
So I thought I could put the credit card balance on my mortgage on a new fixed rate that’s lower than the interest on the cards. Removing the large unsecured debt and improving my rating.
However, I’ve been turned down by two lenders in 10 days. The first turned down a joint application with my husband because he has a CCJ from a dispute with a utility company which was unjustified and they said they were at fault but couldn’t back out the CCJ. The second mortgage was turned down in my sole name because they said I had too much unsecured debt (the unsecured debt i’d no longer have if I put it on the mortgage). Subsequently my credit rating has plummeted another 47 points! So now I feel I’m even less likely to get a mortgage deal or transfer credit card debt. What can I do now? I feel trapped.

Hi there

Thanks for posting.

Unfortunately this kind of problem isn't uncommon and there's no easy answer to it. I can see how the re-mortgage was turned down on the basis of the CCJ, and when you then applied alone, both the level of debt plus only basing the application on your income would have harmed your chances.

Re the CCJ, I'm not sure about the 'can't back out of a CCJ' comment from the utility provider. Creditors can remove a CCJ from a credit file and cancel a CCJ if it was obtained incorrectly. It may be worth speaking to them again about this and making a complaint if necessary.

If you're struggling with your debt repayments, you could register with us free of charge and we can look at options to sort your debts out. We also have a mortgage team that may be able to look at suitable mortgages for you, depending on your circumstances and eligibility.

If you'd like us to help, you can find our contact details here: www.stepchange.org/Contactus

Whilst the situation is difficult, the worst case scenario with the mortgage is that you go onto the standard variable rate. I know this is a higher interest rate and payment, but if you need to reduce your debt repayments to be able to afford the mortgage, we can help with that.

Best wishes

Allen

StepChange_Allen

Pinky110 wrote: »

Hi, I’m not sure if I am posting in the right place here. I need advice on how to move forward. I started at college last September, and due to the hours had to stop working so we are relying on my husbands wage and tax credits to get us through. I am starting university in September and fully intend on using the loans services to help with all living costs and uni costs.
But! But over the last few years due to decreasing wages and decreasing tax credits, and 5 children between us we have got into sizeable debt. I thought we would be able to manage that and obviously intend on getting a better pain job after uni but I am not sure how we can continue for the next 4 years like this. Our credit rating is going to pot because we keep missing payments (they all get paid but often late).
My question is, how will either a bankruptcy or one of those debt solution things affect my uni application and loan applications? I can’t go to uni without the loans but we are kind of stuck right now.

Any help would so appreciated.

Kind regards

Pinky

Hi Pinky

Welcome to the forum and thanks for posting.

I'm not aware that debt problems affect applications for student finance, but I'm not completely sure, so I'd suggest speaking to the student loans people and asking them, anonymously if you wish.

If you'd like some free advice about your debts and finances, you can register with us either on the phone or online. All the details can be found here on our website: www.stepchange.org/Contactus

Best wishes

Allen

StepChange_Allen

160990sl wrote: »

So I have debts of

Credit card 1 =£1500 26% monthly payment £45
Credit card 2 =£1500 17% monthly payment £30
Loan 1 = £1972. 25% monthly payments £65
Loan 2 = £1654. 18% monthly payments of £110

After all bills etc have £100/£150 spare

Which would you advise paying off first/ highest apr/ biggest amount/ biggest monthly payment so then can put more in to paying off other ones

Tried debt consolidation but apr is ridiculous and with credit score no one would accept me.

Hi there

Thanks for your post.

As long as you can maintain at least the minimum payment on all debts, and expect to be able to going forward, then it's generally best to target the higher interest debts first; certainly when it comes to credit cards.

With the loans, it can depend whether the interest has already been frontloaded at the start (e.g. borrow £1000, balance on day 1 is £1400 and comes down from there), or whether it's added daily/monthly. I'd also check whether there are any early repayment charges on there, as sometimes these can outweigh the benefits of overpaying.

I hope that's helpful.

Allen

StepChange_Allen

Tryingtobedebtfree wrote: »

Looking for a bit of advice. I had an old council tax debt where I failed to keep up with the arrangement direct with the council. They passed the debt on to Borstow Stutor. They are a nightmare to deal with and only an 0i71 number to contact. I have been in regular contact to make arrangements to pay but they refused my offers. I recieved around £50 in wages and £46 tax credit. Rent and ctax are £65 a week so struggled to offer any more than £5 a week. They added their £75 and said they would take the lower offer but the refused it again. I've been to my MP for help who has written to them but 7 days after the last contact today they have sent a balif. I didn't answer or let them in but the 101 bill is now 527!!. Any help or advice will be great. Thanks in Advance

Hi there

Welcome to the forum and thanks for posting.

The one piece of advice I can give you on here is not to let them in your property if they haven't been in before, because this gives them more powers. There's some advice on our website about bailiffs that's worth reading: www.stepchange.org/debt-info/debt-collection/bailiff-help-and-advice

In order to give you some specific help and advice, we'd need to know more about your financial situation.

You can register with us either on the phone or online completely free of charge. All the details can be found here on our website: www.stepchange.org/Contactus

We look forward to helping you soon.

Allen

neilied

Please see below, what can be done?

Hi all. My wife has had a £2k overdraft for over 10 years, since we had our lovely little ones my wife hasn’t earned her old wage. She has just been living in the overdraft. After Lloyd’s made changes to the charges last year it fast become unaffordable. She approached the bank and they offered a short term agreement. They suspended the charges and downgraded her account. She had to make 3 monthly payments of £60 then she negotiated another 3 months at £70. More recently she spoke with another Lloyd’s person as she had been sent through to arrears/debt team. They said that she didn’t need to be dealt with by them but again set agreement to pay another 3 months of £70 which they mentioned that next maybe a 6 month or 12 month one.

Sorry for the big back story. So yesterday was the first £70 of the new agreement and she ensured it was available. Today was pay day and when she checked the balance showed her pay but available was zero. She panicked and contacted the bank but the department she needed hadn’t opened. The CS told her that they couldn’t see any agreement in place and that her OD was suspended and any payments into the account would go towards it. This has left us really short for the week and more so caused so much distress to my wife she has gone to work today in tears and so stressed. Poor show from Lloyd’s but not sure how we can fix this. I know we need to talk to the dept in question but it has stressed us and the kids out this morning so annoyed by this error.

Thanks