Struggling with debt? Ask a debt adviser a question

StepChange_Rachael

Hi

Welcome to the forum and thanks for your post.

Part of the collection process for creditors in the UK is that a debt can be sold on if the original contract is defaulted. A default happens when the original agreed payment has been missed or a reduced payment made.

At this stage the creditors can pass a debt on to a collections agency or go through the court and set a CCJ against the debt. Both routes are legal.

Once a debt has been passed on, the collections agency has the legal authority to collect for the debt. However, they do have to provide the original contractual agreement to enforce the debt through the court process.

Hope this helps.

Thanks
Rachael

Jspencer wrote: »

hi, i've seen a recent post online about clearing debt and wanted to know if its true. It claimed you can clear debt passed on to debt collectors by disputing it as 'no contract' as the original company have now passed on the debt they cancelled their original contract with me, lots of people have responded saying they've tried it and it works but they're all american ! so not sure if its possible in the UK.

Jspencer_2

Ohhhh ok just thought I’d ask thank you

Sparklyteacher1987

I've been thinking about contacting StepChange for a while but have stopped myself.
I have about £19k in credit card debt which has built up due to my own recklessness etc. I have a mortgage which has 12.5 years left on it.
I'm 30.

Here's why I've stopped myself: I've been "coping" with minimum repayments....just.
But I also have a boyfriend (he's German) who is doing a masters course for the next year and a half. After that I don't know what is going to happen-whether he will try and find a job here or whether I will sell up and move with him somewhere else. I'm hesitating about starting a DMP because I know I won't be able to get a mortgage again. I'm also worried that if I stay put, when my mortgage deal is up for review, they won't offer me a new one and I'll be stuck on an unpredictable interest rate.

Any advice?! ��

StepChange_Allen

Sparklyteacher1987 wrote: »

I've been thinking about contacting StepChange for a while but have stopped myself.
I have about £19k in credit card debt which has built up due to my own recklessness etc. I have a mortgage which has 12.5 years left on it.
I'm 30.

Here's why I've stopped myself: I've been "coping" with minimum repayments....just.
But I also have a boyfriend (he's German) who is doing a masters course for the next year and a half. After that I don't know what is going to happen-whether he will try and find a job here or whether I will sell up and move with him somewhere else. I'm hesitating about starting a DMP because I know I won't be able to get a mortgage again. I'm also worried that if I stay put, when my mortgage deal is up for review, they won't offer me a new one and I'll be stuck on an unpredictable interest rate.

Any advice?! ��

Hi there

Thanks for posting.

I speak to a number of people that are right on the borderline of being able to manage and not being able to; where minimum payments are just about achievable but they're not really bringing the debt down. There's not necessarily a definite right and wrong answer to what you do in this situation, but it's definitely worth getting some advice and seeing what your options are.

Simply contacting us for advice has no effect on your credit rating, so if we recommended a DMP for example, you could still choose to keep going as you are. You can find all our contact details to do a budget with us on the phone or online, on our website: www.stepchange.org/contactus

With specific regard to your mortgage, any debt solution including a DMP is very likely to have a negative effect on your credit rating. However, at the end of your current deal you could either go onto the standard variable rate or possibly even still get a fixed rate deal; it's not definite that you won't be able to. Your current bank may consider giving you one, especially if you always pay your current one, but there's no way of knowing until you apply.

Ultimately though, if you're only just making ends meet and the debt isn't really reducing, it may come down to whether your income will increase or expenses reduce in the short to medium term. If things will improve, it may be possible to then start clearing the debt more quickly, but if not, a debt solution may be the only way to resolve the debts.

I hope this gives a little bit of insight, but please contact us so that we can look at your situation specifically and explain your options clearly.

Best wishes

Allen

Sparklyteacher1987

Thank you ^
If I was to sell my flat in a couple of years to move, would I have to give some of the money from the sale to pay off more of my credit cards? Meaning I wouldn't be able to use it to help pay for future housing once the 6 years had passed?

von179

Hello,

I'm new to the forum and have read a lot of questions and responses but am unable to find anything similar to my situation to obtain the correct advice. Sorry if this has been asked before.

8 years ago I took out a bank loan, I needed 7k for a car and other things, computer for work etc. I was young and and very naive and let the woman in the bank talk me into a 14k loan... so stupid, I know that now..

For 3 years I kept up payments and everything was fine, then my employer had to reduce my hours and my partner died. I fell into depression and couldn't of cared less at the time weather or not I was making ends meet.

They issued a CCJ and i was asked to make monthly payments, which i never did. I tried to set up a DD with the debt agency and the only way they would let me pay was to go into a bank and use their paying in slip of do it over the phone, at this point I wasn't even speaking to my own family on the phone and barely got out of bed so again I did nothing. I obviously know this was the worst possible thing to do but I was deep into a black hole of depression and was not taking care of myself in any way what so ever.

Over the last five years they never contacted me so I pushed it to the back of my mind. I have had the CCJ now for 5 years and one month and they have now tried to call me... I have been driving every-time they have called so I haven't spoken to them yet and i would like some advice before i do so.

My question is, can they demand the full re payment? if i start to make payments now will the CCJ remain on my file as It will be due to drop off in dec '18. or will it still go and i can continue to make payments in the background?

Would It be likely they would accept a settlement figure?

Sorry for all the questions but I've read a lot of stories where debt agencies don't make you aware of all your rights and scare you into agreeing to large payments and threaten you with bailiffs etc.

Many thanks for taking the time to read this.

katie4

Hi
I seem to gather from the forums that debt consolidation loans are pretty frowned upon. however, i am in the position to be able to put extra money now towards my credit cards the thing is the interest on one is 42% it will take me a long time to pay these off (i have three credit cards)
currently pushing £400-500 a month onto the highest apr card but i'm thinking it may be better to get a debt consolidation loan to pay off all cards, it would save me thousands in interest take only 3 years and a manageable £250 a month meaning i can then cancel the cards and start putting some money into savings as well.


would this seem sensible? thanks

Daveb45

At present I have £12500 outstanding on five credit cards and £33000 outstanding on three loans , with other outgoings (rent,car,food,gas/electric etc). I have £2100 coming in a month but £2650 going out. I am 57 years old what are my best options.

StepChange_Allen

Sparklyteacher1987 wrote: »

Thank you ^
If I was to sell my flat in a couple of years to move, would I have to give some of the money from the sale to pay off more of my credit cards? Meaning I wouldn't be able to use it to help pay for future housing once the 6 years had passed?

Hi again

Thanks for coming back to us.

It's unlikely that you'd be forced to use any money from that to clear more debt, but it could be a good option, it all depends what's happening then really. Generally, it's better to pay off debt and having a fresh start than to save money aside for the future if you can't currently use it; however every situation is different.

We can discuss this in more detail if you decide to register with us.

Allen

StepChange_Allen

von179 wrote: »

Hello,

I'm new to the forum and have read a lot of questions and responses but am unable to find anything similar to my situation to obtain the correct advice. Sorry if this has been asked before.

8 years ago I took out a bank loan, I needed 7k for a car and other things, computer for work etc. I was young and and very naive and let the woman in the bank talk me into a 14k loan... so stupid, I know that now..

For 3 years I kept up payments and everything was fine, then my employer had to reduce my hours and my partner died. I fell into depression and couldn't of cared less at the time weather or not I was making ends meet.

They issued a CCJ and i was asked to make monthly payments, which i never did. I tried to set up a DD with the debt agency and the only way they would let me pay was to go into a bank and use their paying in slip of do it over the phone, at this point I wasn't even speaking to my own family on the phone and barely got out of bed so again I did nothing. I obviously know this was the worst possible thing to do but I was deep into a black hole of depression and was not taking care of myself in any way what so ever.

Over the last five years they never contacted me so I pushed it to the back of my mind. I have had the CCJ now for 5 years and one month and they have now tried to call me... I have been driving every-time they have called so I haven't spoken to them yet and i would like some advice before i do so.

My question is, can they demand the full re payment? if i start to make payments now will the CCJ remain on my file as It will be due to drop off in dec '18. or will it still go and i can continue to make payments in the background?

Would It be likely they would accept a settlement figure?

Sorry for all the questions but I've read a lot of stories where debt agencies don't make you aware of all your rights and scare you into agreeing to large payments and threaten you with bailiffs etc.

Many thanks for taking the time to read this.

Hi there

Welcome to the forum and thanks for posting.

I'm very sorry to hear about the passing of your partner and the health problems that you have since been through. I hope that you have help and support for the health side of things now; if not then it may be best to contact your GP in the first instance.

When a creditor gets a CCJ, a judgment is set by the court, either for a monthly instalment, or 'forthwith' (which means in full). If this judgment is broken (i.e. the payments set are not made) then the creditor is allowed to use enforcement to try and collect the money. This is most commonly done via an attachment of earnings if you're working, enforcement agents (bailiffs) or a charging order on your property if you're a home owner (though they can do this even if the CCJ is up to date). So they could send the debt to bailiffs any day now if they wanted to.

In direct answer to your question, yes they can ask for the full amount. However, if you're unable to pay that, which most people are, you can apply to 'vary' (change) the judgment to an affordable amount by completing form N245 (available on the gov.uk website).

It's possible creditors might accept a settlement figure, it depends on a lot of factors so it's not possible say if this particular one would. There's no harm in asking though.

In regards to your credit file, the CCJ will drop off after 6 years, however it's still enforceable by all the normal methods.

I hope this is helpful. If you'd like some more in depth personal advice, please contact us: www.stepchange.org/contactus

Allen