Struggling with debt? Ask a debt adviser a question

StepChange_Kirsty

Hi there,

Thanks for your post.

First thing I would say is please get back in touch! Even though you’ve had a debt management plan (DMP) before with us we can still offer you help and advice.

With a DMP, whether it’s through StepChange or self-managed, the most important thing is that you can afford the monthly payments without it causing you further financial difficulty. I can see this is something you have now learnt from.

When we set up DMP’s, we make sure that a review is done at least once a year or sooner if there is a change in circumstances. Sometimes this means that payments will reduce or increase and it’s a normal thing to happen during a DMP especially if it takes a few years to pay the debts. Please don’t worry if you need to send them an updated budget which is more sustainable for you. It’s better for them to get regular affordable payments than for you to need to continue the debt cycle.

Give us a call though and we’ll be more than happy to help.

Kirsty

Better_place wrote: »

I have been on a stepchange dmp before, then went self managed and have been doing this for a while. However, I have been offering creditors payments I think are reasonable for the debt amount rather than the actual amount I can afford - that being the case, i have borrowed again just to keep my head above water and I could kick myself, I feel so stupid - another ridiculously high interest loan. I really want to start again with stepchange but am worried my creditors will think I'm mucking them about. I am panicking about writing to them again to offer lower payments due to my own stupidity. What would you suggest? Thank you for any advice

StepChange_Kirsty

Hi there,

Thanks for your post.

If you’ve offered all of your creditors a fair share of the lump sum you have available but NRAM have not agreed to the settlement, there is nothing strictly to say you cannot revert to paying them by instalments (on the basis that NRAM is not secured).

That being said, its possible NRAM could still decide to take legal action to recover their debt. There is some useful information on our website about what your creditors can and cannot do if you have defaulted which you can find here.

Whilst I cannot give you a set answer here about what you should do, my concern is that if you pay £150 per month to NRAM it will still take you over 16 years to clear the debt and a lot can happen in this time. Perhaps a compromise could be made here. For example, if you were to pay NRAM the settlement figure which you had offered you could then arrange to pay the difference by instalments. Alternatively you could set enough money to aside to complete essential work to the property and pay the rest to NRAM again making the remaining debt more manageable.

As the loan you have taken out is secured against the property it’s important you ensure you can still pay this every month so the property is not at risk.

Sorry I’ve not been able to give you a specific answer but I hope this helps.

Kirsty

Jt1979 wrote: »

Hi

A little advice needed if possible. It's a very long story so I will try to get to the point. We have 5 creditors who we have been paying £1 a month to for 7 years. Our circumstances have improved slightly and we are trying to get this sorted. We have managed to get a secure loan and agreed settlement figures with 4 of the 5 creditors.
This leaves 1, NRAM for 29k. They have said the won't budge on the figure and want all of it. After we have paid the other 4 off we will have aprox 25k left, the house is in extreme need of some work done, kitchen and windows as they are in a very very bad state. Whats the situation with me spending the money on the house and not paying NRAM off?
I hope this makes sense

Thanks

Jt1979 wrote: »

I would just like to add that we would like to start paying NRAM off at maybe £150 a month also.
Again I hope this makes sense.

Thanks

EFC1234

Hi,

During my time at uni I got into debt by going into my overdraft (which is 0% interest), I accumulated around £2,000 and now in a steady job I have been paying it off but I want to start saving for a house but want to clear my debt first. I am curious to know if transferring this on to a credit card is a good idea? With my history, I am concerned about signing up for one but if it would benefit me for saving for a house and help me pay back my overdraft debt then I would consider it more.

Any advice?

Best

StepChange_Allen

EFC1234 wrote: »

Hi,

During my time at uni I got into debt by going into my overdraft (which is 0% interest), I accumulated around £2,000 and now in a steady job I have been paying it off but I want to start saving for a house but want to clear my debt first. I am curious to know if transferring this on to a credit card is a good idea? With my history, I am concerned about signing up for one but if it would benefit me for saving for a house and help me pay back my overdraft debt then I would consider it more.

Any advice?

Best

Hi there

Welcome to the forum and thanks for posting.

There are options to deal with this overdraft but it's hard to know which is best without knowing more about your situation (for example, the interest rate on the overdraft and your monthly budget). It may be worth having a look around the main MSE site for more ideas as it's not our main area of expertise. Briefly, I'd say you could consider:

1. Continue repaying off the overdraft as fast as you can.

2. There may be the odd credit card provider that will allow a transfer from an overdraft but I don't think it's common. If there are any charges, make sure they're not more than you're saving in overdraft interest. Don't take out cash off it to pay off the overdraft as cash withdrawals on credit cards are expensive.

3. If there interest and charges are high, a small personal loan at a low interest rate could be an option, but be sure you can pay it back okay.

I hope this helps a little.

Allen

Rcwam88

I received a dro on the 13th of August 2018 which included my council tax bill for 2018/2019 as they had asked for it upfront so could be included.

On the 20th of August my partner and kids moved in. We notified HMRC , DWP, even went to council put in a joint letting application for housing.

I received a council tax bill this month. This is not covered by my dro but it stated I was getting a 25 percent discount. I rung up to inform them I shouldn't be getting the discount as my partner lives with me. They didn't have her down on the system as living with me. Today I received new bill which is including council tax from the 20th of August 2018 at full rate to the end of the tax year April. Around £800.

Can they chase me for a debt that is covered by a dro or as my partner moving in given them a loophole to find a way around it.

Rocoliy

Hi my first time posting but really need some advice my husband has had credit card debts and for years now since before we were even married but he always paid them off then fell on hard times we have been burying our heads in the sand but really need to get things sorted. We both work but have always struggled with money without going into why and how the debt built up as it’ll take a long time but mainly through health problems in the past and change in jobs resulting in a cut in wages ... so on his credit report he has 10000 owing to cabot says default 2013 and Barclaycard 5000 says default 2014 and Lowell 2000 says default 2013. We aren’t sure of when he last paid anything on them as we don’t have any bank statements at a guess maybe 2013. He’s had no contact with any of them either since roughly 2013 we moved house in 2015 so we don’t receive anything in the post. We just need some advice on what to do is he better getting in touch now and coming up with a plan to pay them off ? We rent have barely any savings and have 2 children but both work .Any help appreciated.

StepChange_Kirsty

Hi there,

Thanks for your post.

Whilst the debt relief order (DRO) would have covered your liability for the council tax 2018/2019 and they cannot chase you, your partner would still be liable for council tax for the period she lived in the property so they can chase your partner.

It’s important your partner contacts the council to make an arrangement to repay the outstanding debt. If your partner would have difficulty with repayments to the council tax she can get in touch with StepChange and we can offer some help and advice. Our contact details can be found here.

I hope this information is useful.

Kirsty

Rcwam88 wrote: »

I received a dro on the 13th of August 2018 which included my council tax bill for 2018/2019 as they had asked for it upfront so could be included.

On the 20th of August my partner and kids moved in. We notified HMRC , DWP, even went to council put in a joint letting application for housing.

I received a council tax bill this month. This is not covered by my dro but it stated I was getting a 25 percent discount. I rung up to inform them I shouldn't be getting the discount as my partner lives with me. They didn't have her down on the system as living with me. Today I received new bill which is including council tax from the 20th of August 2018 at full rate to the end of the tax year April. Around £800.

Can they chase me for a debt that is covered by a dro or as my partner moving in given them a loophole to find a way around it.

StepChange_Kirsty

Hi there,

Thanks for your post and welcome to the forum.

Based on what you’ve mentioned these debts may be classed as Statute Barred. If you’ve not made any payments to these debts or sent any written acknowledgement in the last 6 years then under The Limitations Act 1980, the creditor would have lost its chance to enforce the debt through the court. However, it does not mean the debts are written off so the creditors can still send letters requesting payment.

There is some useful information on our website about what The Limitation Act 1980 does and what you should do if you believe the debt is statute barred which you can find here.

The defaults will automatically drop off your husbands credit file 6 years from the date they were issued.

I hope this helps.

Kirsty

Rocoliy wrote: »

Hi my first time posting but really need some advice my husband has had credit card debts and for years now since before we were even married but he always paid them off then fell on hard times we have been burying our heads in the sand but really need to get things sorted. We both work but have always struggled with money without going into why and how the debt built up as it’ll take a long time but mainly through health problems in the past and change in jobs resulting in a cut in wages ... so on his credit report he has 10000 owing to cabot says default 2013 and Barclaycard 5000 says default 2014 and Lowell 2000 says default 2013. We aren’t sure of when he last paid anything on them as we don’t have any bank statements at a guess maybe 2013. He’s had no contact with any of them either since roughly 2013 we moved house in 2015 so we don’t receive anything in the post. We just need some advice on what to do is he better getting in touch now and coming up with a plan to pay them off ? We rent have barely any savings and have 2 children but both work .Any help appreciated.

Rocoliy

Thank you Kirsty for your fast reply and the information !

Barbie61

Hello, I have a DMP in place which has been running for 3 years, I haven't adjusted the figure I pay despite direct debits increasing each year but now I am worried about the upcoming increase to the workplace pension this month and wondering if I should opt out. I only have another 8 years of working life left so it won't be anything impressive on retirement and I'm weighing this increase up against paying off more of my debt so that its paid earlier. I know you're not pension experts and not allowed to give advice but I'm concerned that if I reduce my monthly payment on the DMP that the creditors will want to take me to court or refuse to honour the 0% interest they have kindly agreed to.