Struggling with debt? Ask a debt adviser a question

Rikki1

Need some advice I have £300,000 equity in my home but I have serious credit problems I have missed mortgage payments and a couple of ccjs on my file I lost my job so got in trouble financially if I could remortgage and take out £15,000 I would be debt free but don’t know what to do!

Madcatsazz

Hello. This is my first post so apologies if I!!!8217;ve picked the wrong place to ask. If so, please feel free to redirect me!

I enlisted a PPI claims company in January (I know) and quickly realised that I didn!!!8217;t need them and I got very annoyed with the constant texts call and emails so I cancelled on 13/3/18. They continued messaging, calling and emailing me about claims which I ignored after they advised there would be a cancellation fee. Yesterday they finally sent a cancellation response and kindly attached a bill for £204. I accept I have no choice but to pay this amount for the work they did (though it hurts some to accept it costs £36 to !!!8216;process a response!!!8217; and another £36 to send a letter). I have phoned them today and advised I am willing to pay but can not afford to pay in one go. I have offered £51 per month for four months to settle the debt which I feel is reasonable as it would take them this long to refer it and they would lose money to the credit company. It also took them four months to issue the invoice in the first place. They have rejected my offer and told me the only way to avoid the charge is to continue with them. I have refused to continue with them as I am unhappy with their service so they remain steadfast in requesting payment with 14 days. I have sent payment of £51 as offered anyway and emailed advising I cannot pay more than offered but reiterated that I will pay over four months. I don!!!8217;t know what else I can do. Any advice welcome (except please don!!!8217;t tell me I!!!8217;m stupid for signing up because I realise that already)

Former_StepChange_Joe

Hello

Thanks for your message, and welcome to the forum.

If you're struggling with your mortgage payment and are in arrears, your lender will want to help you. They can offer different types of help which is why it's so important to contact them directly as soon as possible. Ask them for some breathing space while you figure out how to improve the situation and get back up to date. There’s a useful article on the StepChange website about this – click here to read it.

It sounds like there’s a lot going on at the moment, so I think a good place to start is to get in touch with StepChange. They’ll be able to provide you with free and impartial debt advice that’s tailored to your situation.

The first step is to build a budget. You can do this using their anonymous online self-help tool, Debt Remedy. This is available 24 hours a day and takes about 20 minutes to complete. The tool will guide you through creating a budget and will then offer the best debt solution for you.


I hope you’ve found this helpful.

Joe

Rikki1 wrote: »

Need some advice I have £300,000 equity in my home but I have serious credit problems I have missed mortgage payments and a couple of ccjs on my file I lost my job so got in trouble financially if I could remortgage and take out £15,000 I would be debt free but don’t know what to do!

Former_StepChange_Joe

Hello

Thanks for your message and welcome to the forum.

If you feel you’ve been treated unfairly or dishonestly by this company, I suggest making a complaint to them via their internal complaints process. If you’re not satisfied with the outcome of the complaint or they don’t respond within 8 weeks, you can escalate your complaint to the Legal Ombudsman. Bear in mind that if you were planning on disputing the bill, you may have undermined your claim by making a payment towards the bill already.

You don’t have to pay their bill all in one go if you can’t afford to. The reason why they’re holding their ground and insisting you pay as soon as possible is a) they want to get the payment from you in as short a time as possible and b) they know that they have very little power to make you pay more than you’re offering, other than following the debt collection process, which can cost them money and takes time. You can read more about this on the StepChange website by following this link and this link

Instead, keep paying them an affordable amount each month. They could of course keep adding charges, but they’re more likely to stop the charges if you can prove that you’re unable to afford what they’re asking for.

StepChange can help you put together a budget which will show what you can afford to pay to your debts. A good place to start is their online Debt Remedy tool. This is available 24 hours a day and takes about 20 minutes to complete. The tool will guide you through creating a budget and provide you with a copy of this you can send to the PPI claims company. You’ll also be able to download a personal action plan, containing some free, tailored and impartial advice on how to deal with the debt.

I hope you’ve found this helpful.


Joe

Madcatsazz wrote: »

Hello. This is my first post so apologies if I!!!8217;ve picked the wrong place to ask. If so, please feel free to redirect me!

I enlisted a PPI claims company in January (I know) and quickly realised that I didn!!!8217;t need them and I got very annoyed with the constant texts call and emails so I cancelled on 13/3/18. They continued messaging, calling and emailing me about claims which I ignored after they advised there would be a cancellation fee. Yesterday they finally sent a cancellation response and kindly attached a bill for £204. I accept I have no choice but to pay this amount for the work they did (though it hurts some to accept it costs £36 to !!!8216;process a response!!!8217; and another £36 to send a letter). I have phoned them today and advised I am willing to pay but can not afford to pay in one go. I have offered £51 per month for four months to settle the debt which I feel is reasonable as it would take them this long to refer it and they would lose money to the credit company. It also took them four months to issue the invoice in the first place. They have rejected my offer and told me the only way to avoid the charge is to continue with them. I have refused to continue with them as I am unhappy with their service so they remain steadfast in requesting payment with 14 days. I have sent payment of £51 as offered anyway and emailed advising I cannot pay more than offered but reiterated that I will pay over four months. I don!!!8217;t know what else I can do. Any advice welcome (except please don!!!8217;t tell me I!!!8217;m stupid for signing up because I realise that already)

Madcatsazz

Thank you for your advice. I do not particularly agree with their methods but I do not have grounds to complain hence the reason I have accepted that I need to pay.

In relation to the arrangement, they are still refusing to accept the arrangement as I had an email declining. I have written back requesting they give me an explanation as to why they are declining the offer and requested they reconsider.

In terms of them referring the debt and adding costs to the bill if I don’t clear it in 14 days, will I have to pay those costs even though I’ve offered to pay and am showing them I’m paying?

StepChange_Allen

Madcatsazz wrote: »

Thank you for your advice. I do not particularly agree with their methods but I do not have grounds to complain hence the reason I have accepted that I need to pay.

In relation to the arrangement, they are still refusing to accept the arrangement as I had an email declining. I have written back requesting they give me an explanation as to why they are declining the offer and requested they reconsider.

In terms of them referring the debt and adding costs to the bill if I don’t clear it in 14 days, will I have to pay those costs even though I’ve offered to pay and am showing them I’m paying?

Hi there

Thanks for posting.

In general, creditors can continue adding interest and charges even if an informal arrangement has been made to repay a debt. This type of bill isn't a typical debt though, so I don't know how they establish interest and charges; they should have been detailed in the original agreement that you signed so perhaps have a look on there.

As Joe mentioned, if you need further advice re this in terms of affordability, especially if you have other debts, please register with us via Debt Remedy or our telephone Helpline: www.stepchange.org/Contactus

Best wishes

Allen

SuzyN

I am currently considering a DMP (Cant quite bring myself to phone StepChange) but I have some questions if someone would be kind enough to help that will hopefully help me get over the panic hurdle?

Q - Iv gathered its a good to build up an emergency fund but even if I didnt pay for 2/3 months I still have other things that would use than money eg I need to give family back cash and vet bills and some things I need to live eg my sink is broken as are my kettle,toaster and microwave and both our cars need tyres and services.

Can I make vastly reduced payments for 6 mths to get things in order then start where I know I can meet the payments? If so how do I tell the advisor at StepChange that I need to do this?

If I do this will creditors just go for a CCJ? (Instead of working with me)

Q - I have some small debts on only a few hundred etc... if I stop paying everyone temporarily then I could pay these in full to reduce creditors. Is this ok or do I just add everyone in?

Q - Some of my debts are interest free loans - do I keep paying them properly?

One is the gas that was put in and I dont want them coming and taking it back out?? Its with Barclays.

Two are for our phones which we need for work - will they ask for them back (Barclays/apple scheme)??

Q - I have the following products with Santander which is my biggest worry....

Mortgage
Secured loan
Credit card £900
Bank account £3600 o/d (maxed each month)
Bank account £100 o/d
Car loan PCP (ends April 19 with balloon)
Car loan normal ends another 3.5 yrs

I need to keep paying my mortgage, secured loan and two cars. The credit card is £900 and the overdrafts £3700.

I dont want to upset Santander as we are in negative equity and if interest rates shoot up I may need them to be helpful to us with our mortgage in the years to come. I always have made all my Santander payments.

what to do? Will dmp ing some of Santander effect the mortgage and hp?

Q - I have two other loans that are only viewable on my payslip and do not appear on any credit ref checks as they are work credit union debts. If I dont pay them them my employer would be informed and that would be disastrous and they will just deduct them from my wages.

I also have a local CU debt but again I cant stop paying it as my family & friends will find out and this cant happen - its a small community. Will this bar me from a DMP?

Q - Ive just read a thread where the poster stopped paying full payments and ended up with a CCJ. Is this common? I can have defaults and pay them off but a CCJ or IVA would effect my job so I cant have them. #Panic

Sorry for the questions just my mind is going mad. Im swinging between excitement and finally taking control and panic that its all going to fall down round me.

I have all my payments due to come out on Wednesday coming and Ive cancelled all my non essential ones so Im going to have emails, letters, texts, phone calls hitting me from then. Feel a bit ill about it all.

I have applied online for an was accepted for a normal Nationwide joint bank account WITH NO OVERDRAFT so thats the first step to getting things sorted - incase I need to part ways with Santander. Just need to show ID.

Thanks for your thoughts,

Suzy x

gizmo66

Hi All




I want to remortgage but have considerable cc debts at moment, and some investment properties, so my current bank, nationwide have said they will not take on the remortage request. If I can remove the cc debts, how long do they stay on credit history, so I can try to remortgage agin once they have gone? Or is it the investment proproties that I have that will be impacting my remortgage request? Nothing is secured on the house, and I have £190k equity in the house with only £110k to pay. Mortgage is currently with Halfix.

StepChange_Rachael

Hi Suzy

Thanks for posting.

I’ll try and answer your questions as best as I can, but firstly I know it can be difficult to talking through your situation and discussing the debts might be something you’ve not done before and it can be a big step but at StepChange we’re more than happy to help and support you to a solution.

Firstly it’s important the budget is right for you. If you’ve important costs you need to budget for then your budget needs to reflect that. A budget is there to support any solutions you might decide to go ahead with to give it the best chance of success and reduce the chance of further action from the creditors. When you speak with an advisor at StepChange let them know, our phone advisors will help build the budget with you.
Depending on your budget and the costs you have we might recommend a token payment option until your finances improve.

To answer question two, we’d advise to treat all creditors fairly, if you’ve stopped making payments to one creditor but continue to pay off others it can be seen as preferential treatment, as we don’t know what solutions we’d be recommending yet making preferential payments can effect some solutions so we’d suggest not to do this. You can ask all the creditors for a temporary hold while you’re exploring your options. You can find a link to asking for breathing space here.

You’ve asked about the interest free loans, again we’d advise on treating all creditors fairly. When you ask for a hold/breathing space most creditors will stop interest and charges for this period anyway.

To answer the third question, it depends on the type of debt as to whether we’d be advising to ask for a hold. If the debt relates to a contract that you need the use of then we’d advise you to keep this in place or find a cheaper contract that you could move to. For example if you stop paying your phone contract you won’t be able to use the phone, you could find a cheaper contract or sim only and then cancel the old contract. You could then ask for a hold on the old contract if there was any debt left owing.

We’d only suggest asking for a hold on non-priority debts. Continue paying the mortgage, secured loans, and vehicles on finance as the risk of not paying these is much higher than debt such as credit cards, unsecured personal loans, catalogues etc.

Making reduced payments to unsecured debts won’t impact you mortgage as such, even if they are with the same provider as some unsecure debts, however making reduced payments to creditors will impact your credit file which could impact the interest rate that’s available to you.

Credit Union debts can be stopped so this will stop coming from your wages. If this debt isn’t linked to your employer then it won’t impact your employment even though it’s deducted from your wage. Some employers provide advances; this type of debt could impact your employment. I’d suggest checking the impact with your work first by speaking with your HR department or payroll about the deduction.

All debts would need including in tailored debt advice, however it depends on the situation and type of debt as to how it will be affected based on the solution. There are many types of debt solution. In general we advise to include all debts however this is something we can discuss in more detail when you call in.

When you make reduced payments to your creditors or miss payments whether you are in a repayment plan or not it means the creditors could take court action and issue a CCJ. This is greatly reduced if you’re in a managed solution as creditors are more likely to do this if they aren’t receiving any payment.

You’re making really positive steps forward in finding a solution to the problem debt. I really would advise calling in so we can discuss the queries you have in more detail and help you look at the options available to you.

You can find our contact details here.


Thanks
Rachael

SuzyN wrote: »

I am currently considering a DMP (Cant quite bring myself to phone StepChange) but I have some questions if someone would be kind enough to help that will hopefully help me get over the panic hurdle?

Q - Iv gathered its a good to build up an emergency fund but even if I didnt pay for 2/3 months I still have other things that would use than money eg I need to give family back cash and vet bills and some things I need to live eg my sink is broken as are my kettle,toaster and microwave and both our cars need tyres and services.

Can I make vastly reduced payments for 6 mths to get things in order then start where I know I can meet the payments? If so how do I tell the advisor at StepChange that I need to do this?

If I do this will creditors just go for a CCJ? (Instead of working with me)

Q - I have some small debts on only a few hundred etc... if I stop paying everyone temporarily then I could pay these in full to reduce creditors. Is this ok or do I just add everyone in?

Q - Some of my debts are interest free loans - do I keep paying them properly?

One is the gas that was put in and I dont want them coming and taking it back out?? Its with Barclays.

Two are for our phones which we need for work - will they ask for them back (Barclays/apple scheme)??

Q - I have the following products with Santander which is my biggest worry....

Mortgage
Secured loan
Credit card £900
Bank account £3600 o/d (maxed each month)
Bank account £100 o/d
Car loan PCP (ends April 19 with balloon)
Car loan normal ends another 3.5 yrs

I need to keep paying my mortgage, secured loan and two cars. The credit card is £900 and the overdrafts £3700.

I dont want to upset Santander as we are in negative equity and if interest rates shoot up I may need them to be helpful to us with our mortgage in the years to come. I always have made all my Santander payments.

what to do? Will dmp ing some of Santander effect the mortgage and hp?

Q - I have two other loans that are only viewable on my payslip and do not appear on any credit ref checks as they are work credit union debts. If I dont pay them them my employer would be informed and that would be disastrous and they will just deduct them from my wages.

I also have a local CU debt but again I cant stop paying it as my family & friends will find out and this cant happen - its a small community. Will this bar me from a DMP?

Q - Ive just read a thread where the poster stopped paying full payments and ended up with a CCJ. Is this common? I can have defaults and pay them off but a CCJ or IVA would effect my job so I cant have them. #Panic

Sorry for the questions just my mind is going mad. Im swinging between excitement and finally taking control and panic that its all going to fall down round me.

I have all my payments due to come out on Wednesday coming and Ive cancelled all my non essential ones so Im going to have emails, letters, texts, phone calls hitting me from then. Feel a bit ill about it all.

I have applied online for an was accepted for a normal Nationwide joint bank account WITH NO OVERDRAFT so thats the first step to getting things sorted - incase I need to part ways with Santander. Just need to show ID.

Thanks for your thoughts,

Suzy x

StepChange_Rachael

Hi

Thanks for your message.

It’s likely that the amount of unsecured debt is having a significant impact on you being able to re-mortgage. I’m not sure how much this is but depending on different factors as well as the outstanding unsecured debt this is likely to have a big impact on being able to re-mortgage.

If you were able to pay your credit cards off then it’s likely that your credit file will improve. The debt will show that it’s been settled in full on your credit file, most notices on credit files stay for six years from the date it was updated. However, with it showing the debt has been repaid it’ll unlikely have a negative impact on re-mortgaging.

Less unsecured debt will likely benefit a re-mortgage application, however without knowing more about the situation it’s impossible to say exactly.

I’d suggest speaking with an impartial mortgage advisor who’ll be able to give you a better understanding of what’s affecting your application and the options available to you.

You can find the details to StepChanges Financial Solutions team here.
.
Thanks
Rachael

gizmo66 wrote: »

Hi All




I want to remortgage but have considerable cc debts at moment, and some investment properties, so my current bank, nationwide have said they will not take on the remortage request. If I can remove the cc debts, how long do they stay on credit history, so I can try to remortgage agin once they have gone? Or is it the investment proproties that I have that will be impacting my remortgage request? Nothing is secured on the house, and I have £190k equity in the house with only £110k to pay. Mortgage is currently with Halfix.