Struggling with debt? Ask a debt adviser a question

NickyAB

Hi guys. Hoping you can help.
I bought a house about 15 years ago but lost it due to the break up of a relationship leading to less money coming in to the household. Fast forward to now and I have been setting up payment plans on an annual basis with the lender to pay back the difference between how much they sold the house for and how much was remaining on the balance. I'm due to set up another 12 months of repayments now but when filling in the income and expenditure form, it looks like my £500 personal loan repayments are considered a non-priority debt. I'm really nervous that because they consider it non-priority, they'll tell me that I have to pay them the £500 instead and pay the loan lender nothing/a reduced amount. Is this likely to happen? Or will they respect that I have an agreement with this other lender and accept it as a legitimate monthly expense?
Just for clarity, the loan itself came from me consolidating spiralling credit card debts to stop them getting worse rather than buying anything lavish (not sure if that's relevant but thought I'd share for full disclosure). Despite this, my credit rating has been recovered to a point where it's considered excellent by credit vetting companies and I'm really reluctant to let it take a hit again.
If you could please give me your perspective on what's likely to happen here, I'd really appreciate it!

Former_StepChange_Patience

Hi Nicky

Thanks for getting in touch and posting on the forum, I’m sorry to hear about what happened with the house.

If the property was sold and this debt, you’re paying back is a ‘shortfall’ (the sale didn’t cover remaining mortgage at the time) it would also be classed as a ‘non priority debt’. The reason being is that it’s no longer secured against anything, so the action they can take to recover the debt is the same as the loan company.

It’s great to hear that you’re in contact with the previous mortgage company and providing them with annual updates, but whether they ask you for more, based on the new loan company receiving the contractual payment is difficult to say.

They may ask that they’re treated fairly in line with your other creditors, which might mean reducing what you’re currently paying to the new loan but I understand the implication this will have on your credit file.

I hope this helps a little and if you need anything else please get back in touch.

Patience

NickyAB wrote: »

Hi guys. Hoping you can help.
I bought a house about 15 years ago but lost it due to the break up of a relationship leading to less money coming in to the household. Fast forward to now and I have been setting up payment plans on an annual basis with the lender to pay back the difference between how much they sold the house for and how much was remaining on the balance. I'm due to set up another 12 months of repayments now but when filling in the income and expenditure form, it looks like my £500 personal loan repayments are considered a non-priority debt. I'm really nervous that because they consider it non-priority, they'll tell me that I have to pay them the £500 instead and pay the loan lender nothing/a reduced amount. Is this likely to happen? Or will they respect that I have an agreement with this other lender and accept it as a legitimate monthly expense?
Just for clarity, the loan itself came from me consolidating spiralling credit card debts to stop them getting worse rather than buying anything lavish (not sure if that's relevant but thought I'd share for full disclosure). Despite this, my credit rating has been recovered to a point where it's considered excellent by credit vetting companies and I'm really reluctant to let it take a hit again.
If you could please give me your perspective on what's likely to happen here, I'd really appreciate it!

Dad2019

My daughter has received a Court Claim Form, seeking payment of damages and cleaning costs for a property she occupied as part of a nannying job.

She is not disputing the claim, but she can only afford to pay £50 a month. We know that this is going to be acceptable to the claimant, but they are worried she will not pay, hence seeking the backup of a CCJ in case of non-payment.

My query is, if she responds to the claim form, accepting the claim and offering the £50 a month payment, will this mean she automatically gets a CCJ? The guidance online states that the claimant "may seek a judgement against you". it is not clear whether this definitely happens, or if it is the claimant's choice as to whether a CCJ is pursued at this point. As a parent, I am keen to avoid daughter getting CCJ if I can.

Any views welcomed please.

(I appreciate this would have been better sorted out earlier on a voluntary agreement basis, but too many things have been said and done for that to now happen (i.e. no trust remains).

many thanks

forrester_2

Hi

I am looking for some advice please? I have been considering trying to solve my debt for a while, however i have managed to cover it with my salary. However 2 weeks ago i was made redundant.

I have:-

>1 x mortgage with my wife for £170,000, we pay interest only and the value has decreased and is only worth approx £150,000.

>3 x personal credit cards totaling £22,000 which are in my name.

>1 x personal joint loan with my wife totaling £17,000.

My wife earns a part time wage of about £520 a month.

I currently do not earn anything but am looking for another job, which will need to put me back on a salary of £40k+, but it is not so easy.

I have about £13,000 redundancy settlement to live on for the short term. I am also looking into benefits, something i have never done before.

I feel that due to the high debt, and the negative equity on the house we/i should go bankrupt? I dont know if both my wife & I will need to do that or just me as most of the debt is in my name. I dont want her having to pick up the bill.

Would we lose the house seeing as it is at least 20K devalued?

I dont have any real assets except for a car (£2000) which i need while im looking for work and hopefully back in work.

I am just looking for some advice, as i dont see things improving.

Many Thanks in advance

StepChange_Rachael

Hi

Welcome to the forum.

A creditor should look to come to an arrangement outside of court but where this hasn’t been able to be resolved through an affordable verbal agreement, at this stage a creditor can send the debt to court. If a debtor accepts the debt is theirs when official court paperwork is sent, then the CCJ will automatically be set in place.

When the CCJ application is sent there is the option to set aside the debt, but this is costly to do and should only be done if the debt is being disputed. Evidence would be needed to prove the dispute to set a debt aside. As you’ve mentioned the debt is not being disputed, so yes a CCJ would be set.

This would remain on a credit file for six years but then would automatically be removed. Credit files usually improve over time and won’t have an impact on their credit file past six years. The only other way to stop a CCJ being put in place is to pay the full debt within 14 days of receiving the CCJ claim form.

I hope this helps,
Rachael

Dad2019 wrote: »

My daughter has received a Court Claim Form, seeking payment of damages and cleaning costs for a property she occupied as part of a nannying job.

She is not disputing the claim, but she can only afford to pay £50 a month. We know that this is going to be acceptable to the claimant, but they are worried she will not pay, hence seeking the backup of a CCJ in case of non-payment.

My query is, if she responds to the claim form, accepting the claim and offering the £50 a month payment, will this mean she automatically gets a CCJ? The guidance online states that the claimant "may seek a judgement against you". it is not clear whether this definitely happens, or if it is the claimant's choice as to whether a CCJ is pursued at this point. As a parent, I am keen to avoid daughter getting CCJ if I can.

Any views welcomed please.

(I appreciate this would have been better sorted out earlier on a voluntary agreement basis, but too many things have been said and done for that to now happen (i.e. no trust remains).

many thanks

StepChange_Rachael

Hi

Thanks for your message and welcome to the forum.

I’m sorry to hear you've been made redundant, I can see why you’d want to consider your options. Bankruptcy may be the best solution for you, but I’d definitely recommend exploring your options further to make sure any solution you decide to proceed with isn’t going to have any negative long-term implications for you.

In general, assets worth over £1000 are likely to be taken into the bankruptcy. The Official Receiver (OR) could sell assets to release into the bankruptcy. If a vehicle is necessary, and alternative cheaper transport isn’t an option (trains, buses, etc), then the OR might give an amount back to the undischarged bankrupt to buy a cheaper car, but this would be less than £1000. They would also look into any lump sums you’ve received, and your redundancy might be considered an asset in bankruptcy. You can argue that funds need to be set aside for living costs while you’re unemployed, but it would still be a risk.

Properties in negative equity and remain in negative equity won’t be impacted. However, the OR has up to three years to sell the property and release the asset into the bankruptcy. If a property was to increase in value within this time frame, then the OR can force sale of the property. They have three years to complete the sale, otherwise the property would revert back to the bankrupt.

A debt advisor with a full picture of the situation would be able to advise you of the best options available They’d also be able to discuss any potential alternative debt solutions for your partner. If you'd like to speak with us at StepChange for tailored debt advice then you can find our contact details here.

I’d recommend using Turn2us to look into your benefit entitlement as they offer a free benefits calculator through their website.

I hope this helps,

Thanks
Rachael

forrester wrote: »

Hi

I am looking for some advice please? I have been considering trying to solve my debt for a while, however i have managed to cover it with my salary. However 2 weeks ago i was made redundant.

I have:-

>1 x mortgage with my wife for £170,000, we pay interest only and the value has decreased and is only worth approx £150,000.

>3 x personal credit cards totaling £22,000 which are in my name.

>1 x personal joint loan with my wife totaling £17,000.

My wife earns a part time wage of about £520 a month.

I currently do not earn anything but am looking for another job, which will need to put me back on a salary of £40k+, but it is not so easy.

I have about £13,000 redundancy settlement to live on for the short term. I am also looking into benefits, something i have never done before.

I feel that due to the high debt, and the negative equity on the house we/i should go bankrupt? I dont know if both my wife & I will need to do that or just me as most of the debt is in my name. I dont want her having to pick up the bill.

Would we lose the house seeing as it is at least 20K devalued?

I dont have any real assets except for a car (£2000) which i need while im looking for work and hopefully back in work.

I am just looking for some advice, as i dont see things improving.

Many Thanks in advance

Andrew1903

Hi

I've got myself in a huge mess and looking for advice on the best way out of it. My partner knows nothing of the debts and I'm terrified of telling her about them.

At the beginning of 2017 I was in around £8-10k of debt which was due mainly to furnishing our first home, doing the garden, cheap last minute holiday ect. and more than manageable. That was until I stupidly tried to gamble my way out of it and it's backfired massively! The last 8 months or so the I've just been treading water pretty much, making the minimum payments then using the cards again to see the month out, and gamble.online.

I've hit rock bottom this week and have 9p available in my bank account, with all but 1 credit card maxed out, 1 over limit and the last has £60 available for transactions, but not cash advances, which gambling is counted as, otherwise that card would have £0 available also.

I've made the monthly minimum payment on 1 credit card,and have a further 7 still to pay this month, with minimum payments totaling £808.75. I took a £500 payday loan out last month to enable me to meet my outgoings, paid first of 2 £315 payments on 25th June, last one due on payday 25th July.

I had around £300 available this month to pay credit card minimum payments of just under £1000 this month. I gambled it and lost the remaining money available after making the payment on 1 card. After losing the money I had available, I then made a deposit into my betting account using the card I'd made the payment on. Interest has now been added to that card taking it over my limit. I've been in this cycle for months now of having to gamble just to make my payments some months, and the inevitable has finally happened......

Yes I know how stupid I've been!! And as of last night I've closed down all my gambling accounts and self excluded myself.

I'm a home owner, jointly with my partner. We purchased the property 3 1/2 years ago for £250'000 and have a remaining balance of £168'272.41 on our £187'500 mortgage, which was over 25 years, 21 1/2 remaining, We pay £878 a month towards this. We took advantage of the help to buy scheme in Scotland, which put £50'000 towards the purchase of our property.


Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details - Varies from 2300 - 3575 (Work offshore. Basic Salary approx £21k, £75 bonus per day offshore with a high rate of £110 bonus per day 15 onwards. (Max 21 days per month. And work on a 3/3 rota so can vary from 7 days bonus to 22 in a calendar month. The bonus is guaranteed as per contracted rota)

Monthly income after tax - 1800 - 2750
Benefits.- 0
Other income - 0
Total monthly income - 1800 - 2750

Monthly Expense Details

Joint Expenses

Mortgage - 878
Secured/HP loan repayments - 40 (Sofa)
Rent- 0
Management charge (leasehold property) - 0
Council tax - 217
Electricity/Gas - 75
Oil - 0
Water rates - 0
Telephone (land line) - 29
Internet Services - Included in telephone charge
TV Licence - 13
Satellite/Cable TV - 26
Groceries etc -350
Childcare/nursery - 0
Other child related expenses - 0
Pet insurance/vet bills - 26
Pet food - 34
Buildings insurance- 23
Contents insurance - Included in buildings
Life assurance - 50
Other insurance - 0
Entertainment - 75 - 1 meal out & cinema trip per month
Holiday - 0
Emergency fund - 0

Total - 1836 - 918 each

Personal expenses

Mobile phone - 12
Clothing - 25
Petrol/diesel - 80
Road tax - 21
Car Insurance 26
Car maintenance (including MOT) - 20
Car parking - 5
Other travel - 80 (Taxi to/from Heliport)
Presents (birthday, christmas etc) - 60
Medical (prescriptions, dentist etc) - 25
Haircuts - 20
Entertainment - 30 (1 x football match)

Personal - 404

Total monthly expenses - 918 + 404 = 1322



Assets
Cash.- 0
House value (Gross)- 250'000 (168k mortgage + 50k help to buy)
Shares and bonds - 0
Car(s) - 2500
Other assets - 0

Unsecured Debts

Credit cards

£11995 - MBNA
£10998 - Virgin
£ 7213 - TSB - £113 Over credit limit
£ 4995 - Barclaycard
£ 3790 - Tesco
£ 2249 - Capital one
£ 928 - Aqua
£ 433 - Debenhams

Total Credit Card Debt - £42601 - Minimum Current Repayments - £993

Overdrafts

£750 - TSB
£750 - Monzo

Total Overdrafts - £1500

Payday Loan

£315 - Moneyboat (£500 loan in June to get through month, paid £315 off June's pay, 2nd installment due on payday on 25th July)

Total Debt - £44416



Monthly Budget Summary
Total monthly income 2271 - Using average monthly wage
Expenses (including HP & secured debts). 1322
Available for debt repayments - 949
Monthly UNsecured debt repayments - 993
Amount short for making debt repayments - 44

Last years earnings were £35'000. Taking an average monthly wage from that gives £2917 before tax, £2,271 after tax using online calc. With this average I'd still have a shortfall of £44 a month, and I'd be paying this for the rest of my days more than likely! On my worst months wage the shortfall is over £500!

Been looking into a debt arrangement scheme, would this be advisable/do-able in my situation?

Or a consolidation loan? Money supermarket quoted the below with 80% approval, which I'm sceptical about my chances of being approved for at the rates mentioned.

Representative example: If you borrow £44,416 over 12 years, you would make 144 monthly repayments of £473.53. The total amount repayable is £68,188.47. Representative 9.3% APRC, 7.4% (variable) p.a.. A broker or completion fee will be charged and will vary subject to the loan chosen.

I'm willing to do anything possible to sort this mess out, without losing/selling our home, and/or losing my partner.

Any advice appreciated on the best way forward?

Apologies for the long winded post, but better to get everything out there

Thanks in advance

StepChange_Kirsty

Hi,

Thanks for your post and for being so open about your situation.

You’ve made a very positive step in making sure your gambling accounts have been closed and by excluding yourself from the websites. Being so honest about your debts is also a huge step.

The first thing I would recommend is getting some support with your gambling to make sure you’re not tempted to start gambling again and help you regain control. There is a very good charity called Gamcare who may be able to provide you with some free help and advice, you can find their details here.

We can definitely provide you some help and advice when it comes to the debts and I’d recommend you give us a call in order to speak to one of our Scottish law trained debt advisors. The information you’ve put together in this post today will be very useful when speak to us so please have this to hand. You can find our contact details here.

We won’t be able to discuss consolidation loans as further credit is not our area of expertise. If this is something you did want to look into I would recommend seeking independent financial advice.

We hope to hear from you soon.

Kirsty

Andrew1903 wrote: »

Hi

I've got myself in a huge mess and looking for advice on the best way out of it. My partner knows nothing of the debts and I'm terrified of telling her about them.

At the beginning of 2017 I was in around £8-10k of debt which was due mainly to furnishing our first home, doing the garden, cheap last minute holiday ect. and more than manageable. That was until I stupidly tried to gamble my way out of it and it's backfired massively! The last 8 months or so the I've just been treading water pretty much, making the minimum payments then using the cards again to see the month out, and gamble.online.

I've hit rock bottom this week and have 9p available in my bank account, with all but 1 credit card maxed out, 1 over limit and the last has £60 available for transactions, but not cash advances, which gambling is counted as, otherwise that card would have £0 available also.

I've made the monthly minimum payment on 1 credit card,and have a further 7 still to pay this month, with minimum payments totaling £808.75. I took a £500 payday loan out last month to enable me to meet my outgoings, paid first of 2 £315 payments on 25th June, last one due on payday 25th July.

I had around £300 available this month to pay credit card minimum payments of just under £1000 this month. I gambled it and lost the remaining money available after making the payment on 1 card. After losing the money I had available, I then made a deposit into my betting account using the card I'd made the payment on. Interest has now been added to that card taking it over my limit. I've been in this cycle for months now of having to gamble just to make my payments some months, and the inevitable has finally happened......

Yes I know how stupid I've been!! And as of last night I've closed down all my gambling accounts and self excluded myself.

I'm a home owner, jointly with my partner. We purchased the property 3 1/2 years ago for £250'000 and have a remaining balance of £168'272.41 on our £187'500 mortgage, which was over 25 years, 21 1/2 remaining, We pay £878 a month towards this. We took advantage of the help to buy scheme in Scotland, which put £50'000 towards the purchase of our property.


Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details - Varies from 2300 - 3575 (Work offshore. Basic Salary approx £21k, £75 bonus per day offshore with a high rate of £110 bonus per day 15 onwards. (Max 21 days per month. And work on a 3/3 rota so can vary from 7 days bonus to 22 in a calendar month. The bonus is guaranteed as per contracted rota)

Monthly income after tax - 1800 - 2750
Benefits.- 0
Other income - 0
Total monthly income - 1800 - 2750

Monthly Expense Details

Joint Expenses

Mortgage - 878
Secured/HP loan repayments - 40 (Sofa)
Rent- 0
Management charge (leasehold property) - 0
Council tax - 217
Electricity/Gas - 75
Oil - 0
Water rates - 0
Telephone (land line) - 29
Internet Services - Included in telephone charge
TV Licence - 13
Satellite/Cable TV - 26
Groceries etc -350
Childcare/nursery - 0
Other child related expenses - 0
Pet insurance/vet bills - 26
Pet food - 34
Buildings insurance- 23
Contents insurance - Included in buildings
Life assurance - 50
Other insurance - 0
Entertainment - 75 - 1 meal out & cinema trip per month
Holiday - 0
Emergency fund - 0

Total - 1836 - 918 each

Personal expenses

Mobile phone - 12
Clothing - 25
Petrol/diesel - 80
Road tax - 21
Car Insurance 26
Car maintenance (including MOT) - 20
Car parking - 5
Other travel - 80 (Taxi to/from Heliport)
Presents (birthday, christmas etc) - 60
Medical (prescriptions, dentist etc) - 25
Haircuts - 20
Entertainment - 30 (1 x football match)

Personal - 404

Total monthly expenses - 918 + 404 = 1322



Assets
Cash.- 0
House value (Gross)- 250'000 (168k mortgage + 50k help to buy)
Shares and bonds - 0
Car(s) - 2500
Other assets - 0

Unsecured Debts

Credit cards

£11995 - MBNA
£10998 - Virgin
£ 7213 - TSB - £113 Over credit limit
£ 4995 - Barclaycard
£ 3790 - Tesco
£ 2249 - Capital one
£ 928 - Aqua
£ 433 - Debenhams

Total Credit Card Debt - £42601 - Minimum Current Repayments - £993

Overdrafts

£750 - TSB
£750 - Monzo

Total Overdrafts - £1500

Payday Loan

£315 - Moneyboat (£500 loan in June to get through month, paid £315 off June's pay, 2nd installment due on payday on 25th July)

Total Debt - £44416



Monthly Budget Summary
Total monthly income 2271 - Using average monthly wage
Expenses (including HP & secured debts). 1322
Available for debt repayments - 949
Monthly UNsecured debt repayments - 993
Amount short for making debt repayments - 44

Last years earnings were £35'000. Taking an average monthly wage from that gives £2917 before tax, £2,271 after tax using online calc. With this average I'd still have a shortfall of £44 a month, and I'd be paying this for the rest of my days more than likely! On my worst months wage the shortfall is over £500!

Been looking into a debt arrangement scheme, would this be advisable/do-able in my situation?

Or a consolidation loan? Money supermarket quoted the below with 80% approval, which I'm sceptical about my chances of being approved for at the rates mentioned.

Representative example: If you borrow £44,416 over 12 years, you would make 144 monthly repayments of £473.53. The total amount repayable is £68,188.47. Representative 9.3% APRC, 7.4% (variable) p.a.. A broker or completion fee will be charged and will vary subject to the loan chosen.

I'm willing to do anything possible to sort this mess out, without losing/selling our home, and/or losing my partner.

Any advice appreciated on the best way forward?

Apologies for the long winded post, but better to get everything out there

Thanks in advance

ITG

Hi new to the forum
Is it better to pay off my credit card with a loan as I'm paying more in interest

SloughDA

Hi there,
I have been issued the first set of papers in the CCJ process but am very confused about how to fill out the income and expenses sections of the N9A form.
I am unemployed and not eligible for any benefits such as JSA. My wife is working and we have 3 children.
We receive child benefit, in my wife's name.
We receive her wage, obviously in her name.
We receive tax credits in both our names.
We receive LHA in both our names.
Which of these do i put down? Does my wife's income count as mine? Do i include the full amount of tax credits and LHA?

Now, the expenses. We have no money left at the end of the month right now. My wife is on a low wage, rent is high, three kids to provide for, etc.
The expenses section says not to include any payments made by other members of the household out of their income.
About 65% of the money coming in is in my wife's name (wages and CB).
Our household bills are some jointly named, some mine, some hers.

How do i fill in this form without deliberately misleading anyone but still reflect the fact that we have no money to spare?

Thanks in advance.