RE: Badly Advised by Stepchange

cookpassbabtridge1

Help!

I had exposure to various debts and called Stepchange (the Debt Charity) to get advice. I thought it would be sensible if I could amalgamate my debts so thought that Stepchange would be the right company to go through.

Although I was never behind or hadn't defaulted on any payments, Stepchange advised me to take out a debt management plan (DMP). Upon taking out the debt management plan, I suddenly defaulted on all of the accounts I had previously been up to date with. My credit score then went through the floor.

I complained initially on the 6/3/2015. At this point I didn't receive a satisfactory response.
After paying off my DMP for years the repeated marks on my credit file were making me seriously unhappy.
At this point I took out an IVA so I could actually have an end in sight, this has actually made things worse as now I am unable to rent a house for my family.

I feel I should never have been advised to take out the DMP and wasn't made aware of how adversely my credit score would be affected. Stepchange should have taken into account the fact that I am a teacher with a secure job and a clear path for progression. I feel the initial conversation was extremely leading and led me to do the wrong thing financially which has given me nightmares for the past 5 years.

I am currently now unable to rent a house through estate agents and am on the verge of being made homeless after receiving an eviction notice.
I am constantly burdened by my debt and am unable to do anything as simple as get a mobile phone contract.
I have been unable to get a mortgage and a secure home for my wife and 2 young children.
For the past 5 years I have had to struggle under the burden of the DMP and now the IVA, being unable to use credit facilities and also feeling like a failure to my family.

I have sent a complaint to the Financial Ombudsman but I was wondering what else I could do?

Thanks,

Clouds88

Why don’t you put up an SOA and the guys on here can see what is the right path for you.

A DPM is usually suggested if your struggling to make your contractual debt repayments and it has a realistic end sight eg 5 years. I would then personally have gone for bankruptcy rather than IVA as with no assets to protect and repayments over 3 years max it is the better route.

I am sorry to hear about your current situation but let’s see if we can help at all? How many years of the IVA do you have left?

Possible ways around the new house- could you Try going through a private landlord also who may not do such thorough checks?
Or ask for a break on the IVA payments to save up more rent in advance and pay say 3-6 months rent payments upfront to secure another place?

sourcrates

Hi,

You appear to have bounced from one bad decision to another, you must have been struggling with your payments to have sort the advice of Stepchange in the first place, and unfortunately defaults are par for the course with any debt solution.

If you were that upset with a DMP, then why on earth did you opt for insolvency ?

Did you research the consequences first ?

Who advised you to take out an IVA ?

DCFC79

So you weren't behind and hadn't defaulted yet you went to stepchange.

What you needed to do was to look at your spending and cut back and then at a certain point consider a loan to then pay the other debts but consolidation is risky.

Remember your score is only seen by yourself, lenders see your history.

mjm3346

If you had the money to keep paying all your debts but didn't then what did you do with all the extra money?

If you were unhappy in 2015 with being on a DMP then you could have started paying the full amounts again.

If you were unable to keep up the full payments required then one way or another your credit rating would take a hit (Stepchange do not provide consolidation loans and if you were struggling to start with you are unlikely to have got one anywhere)

Exodi

This just doesn't add up. You allege you're cruising along fine but called a debt charity, how you were led into taking out a DMP (which last for defined periods), decided to go down the route of an IVA (so you have an end in sight?) and how despite these arrangements, you seem to still be 'burdened by your debt'.

Personally I think you're trying to find someone to blame for your problems. It doesn't sit well that you've decided to point your finger at a highly reputed (especially on these forums) charity. I'd probably look into the IVA more than the DMP.

How has your debt got so bad? Signing up to a DMP will typically have the interest frozen, it will, in nearly all cases, be cheaper than paying normally.

I hope you find whatever it is you're looking for.

Kentish_Dave

I think that the lesson here is that you need to start taking some responsibility for your situation and to stop looking for someone to blame.

For whatever reason you’ve ended up bringing your family to the brink of homelessness. Fixing this should be your top priority, so stop worrying about the ombudsman and instead focus on your housing.

How many hours do you work at the moment, and can you take on a second job?

terrence45

I thought estate agents could only see the public information on your file? Would a DMP show up?

Where do you live currently and why are you having to look for a new place? Try a private landlord or get a guarantor.

A mobile phone contract is unnecessary - you can get a very good Android smartphone for just over £100 and a pay as you go sim card with bundles of data and calls for £10-15 a month.

Willing2Learn

terrence45 wrote: »

I thought estate agents could only see the public information on your file? Would a DMP show up?

A DMP does not show up. Only CCJs and bankruptcy would show up.
https://www.checkmyfile.com/articles/2892/personal-finance/which-credit-report-information-can-landlords-see.htm

@OP - Your family will not become homeless. If the worst comes to the worst, you should approach your Local Authority for housing. Social Services will not allow young children to become street homeless, so your family is protected. If you are worried and don't know how to contact your Local Authority, then give Shelter a call on 0808 800 4444.
https://england.shelter.org.uk/housing_advice/private_renting/how_landlords_and_letting_agents_check_tenants

ToxtethO'Grady

Er....why are you being evicted? Section 8 or Section 21?
If you are being evicted for rent arrears (section 8) then your credit file has no impact on why you are not being accepted by another landlord or estate agent. Your rent is your priority and in a DMP or IVA they are pretty much the first things you pay so if you are behind with them then no landlord would be happy to accept you.

If it's ending the tenancy (section 21), I'm sorry this has happened and you need advice from Shelter or the local authority. Your landlord should have given you 2 months notice so my advice would be to not pay the rent for those 2 months. If you can discuss this with your landlord and advice you will ask if they can be added to your IVA and you can then use that money for a deposit/ rent advance and this may make you a better bet for a tenancy. Once you have left the debt is unsecured and the landlord would prefer you out rather than going through the possession and then eviction process.



However laying the blame at a free debt advice organisations door when you're in an IVA (a form of insolvency) is like me saying I'm blaming the landlord at the first pub who served me when I was 18 for my alcoholism when I'm 50. I feel that your complaint with the ombudsman will be looked at and filed under 'why' or 'huh?' and turned down.


You need to get your spending under control if you are unable to maintain the payments for the roof over you and your families head. Something else is happening here and you need to sit down and have a think about what that is. Even if you went bankrupt you'd be homeless again the way you are explaining this, so what does getting rid of your debt achieve if it happens again?


DMP's do show on your credit file as creditors will mark your payments (DM) = debt management so if another creditor does a credit check they can see you are in financial difficulties. There is a creditor version of your personal credit check. However you now have an IVA under public information and this is the same (ish) as a CCJ.


I feel I'm not being helpful here but you sound as though you need to face up to the reality of your situation. If you have prioritised payments to a DMP or an IVA over your rent then you have either misunderstood what you needed to do or wilfully refused to pay your rent trying to get debt free. Either way, the roof over you and your families head has been compromised and, as someone who has been street homeless, I feel that you have a caused a lot of heartache and pain for your family when you didn't need to.


I hope your situation works out for you and I know you are trying to resolve this in the best way. Please ask for advice on these forums before your next steps and we will all try to help.

cookpassbabtridge1

Wow, thanks for the helpful replies and I'm astonished by some of the others.

I 100% take responsibility for my actions. In hindsight I never should have done the DMP and have regretted it from the moment I did. Taking out the DMP was my poor decision, as I said I had exposure to a lot of debts (although 2 were 0% interest credit cards and 2 were interest free overdrafts) and just wanted to simplify them, not knowing the catastrophic impact this would have on my credit file.
I'm not behind on rent, and have never missed it in my life. We are being evicted by a section 21 notice.
Thankfully we have found somewhere from a private let. I don't think Stepchange is a terrible company, but I still think I could have been better advised in the first place.
I'm not swanning around having exotic holidays or have an expensive car. I am desperately trying to save every penny to get out of this IVA and actually have the freedom to take my children on holiday.