Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Allen

cbutton wrote: »

I returned to the UK from Dubai two years ago, having been made redundant. After sporadic temp work I have finally secured permanent work so feel in a position to start budgeting to pay off a credit card and personal loan debt from when I left UAE.

As I have been contacted by a UK company acting on behalf of a UAE bank (I have acknowledged the debt and asked for time to seek advice) where do I stand with asking them if they would reduce the debt (i.e. interest and charges that have built up)? I would also like to know if my home would be at risk. I have a mortgage, with the flat jointly owned with my sister.

Hi there

Welcome to the forum and thanks for posting.

It's generally rare that companies will reduce/remove interest and charges that have built up previously. If you wanted to ask, I'd recommend asking the company that's collecting the debt now, stating the reasons why you feel they should do this (they can refer back to the original lander if they need to). They may be more likely to freeze the balance moving forward.

Homes aren't really at serious risk from unsecured debts. In theory there's a process which can potentially lead to an attempt at a forced sale of property, but it's incredibly rare for debts like loans and credit cards. It's a bit of an unknown with the debts having originated in the UAE, but if collecting the debt here, they'd have to follow UK collections/court processes.

I hope this is helpful.

Allen

StepChange_Allen

Ch1rpie wrote: »

Hi, been paying back large debt for over 5 years and still have approx £6000 left to pay. Was with a debt company for a while who arranged no interest and payments but I now deal with this on my own. I have 9 creditors and I pay each of these monthly.

I have just had an insurance policy mature and have £2000 which I want to use to pay against some debt.

My questions 1) should I divide this £2000 up equally among the creditors or could I just target a few to clear the totals.
2) Do I target the largest or smallest debts and
3) Should I contact the companies first or can I just pay off the total in one payment and ask the company after to confirm debt settled.

Thanks

Hi there

Thanks for posting.

We always recommend sharing lump sums between all the creditors fairly, ideally on a pro-rata basis (e.g. double the debt balance, double the amount from the lump sum). If you pay a lump sum to only one or two, to settle them, your other creditors could find out (via your credit report) and take issue with it. They might then be less likely to agree to continue your payment plans.

You should just be able to make the extra payments to them without contacting them, or you could just drop them a courtesy e-mail to let them know it's a one off payment.

I hope this is helpful.

Allen

emmajaynewithay

Hello!

I’m currently on a DMP with PayPlan. And have been for a year. I’ve managed to pay off £9K our of £34K of debt this way and this has really helped me feel better.

My worry is this - In the past year I’ve had to do the following:
1) reduce my payments from monthly DMP payment from £900 to £600 after a breakup
2) take two one month payment breaks and pay just £1 per creditor a) to be able to pay to move in somewhere on my own b) just now December to pay for dental treatment

I’ve just been hit with £500 gas bill, after a massive mix-up with my provider so now I worry I’ll have to take another one month payment again to pay this off.

I don’t want to annoy my creditors or PayPlan who’ve been really agreeable so far.

What do I do? I’m really worried.

StepChange_Rachael

Hi

Thanks for your message.

I wouldn’t worry too much about PayPlan, you’re their client so they should be helping to make sure your debts are manageable. Things come up, life happens and sometimes there are unexpected expenses that you can’t foresee. It sounds to me as thought you’ve had perfectly good reasons why you had to have a payment holiday and this should have been relayed to the creditors.

Instead of asking for another payment holiday, you can ask PayPlan to add the gas arrears into your plan. This way the creditors will still receive a payment and you’ll be dealing with the gas bill as well. It might be worth updating the budget with them to incorporate extra in your regular monthly payments to your gas usage so it’s less likely this would happen again.

Take care,
Rachael

emmajaynewithay wrote: »

Hello!

I’m currently on a DMP with PayPlan. And have been for a year. I’ve managed to pay off £9K our of £34K of debt this way and this has really helped me feel better.

My worry is this - In the past year I’ve had to do the following:
1) reduce my payments from monthly DMP payment from £900 to £600 after a breakup
2) take two one month payment breaks and pay just £1 per creditor a) to be able to pay to move in somewhere on my own b) just now December to pay for dental treatment

I’ve just been hit with £500 gas bill, after a massive mix-up with my provider so now I worry I’ll have to take another one month payment again to pay this off.

I don’t want to annoy my creditors or PayPlan who’ve been really agreeable so far.

What do I do? I’m really worried.

needtodothis2020

Hi,
I have made the first steps this morning and phoned stepchange and made a plan with them.
I am just waiting on the documents to come through that advises me on what to do next.
My question is should I contact all my creditors and advise them that I am involved with stepchange and I am entering a DMP or should I wait?
I have already cancelled all my direct debits this morning and now am able to try and build up a bit of an emergency fund.
Many Thanks

scot23

Hi can I ask a quick question re a moritorium (?spelling). Do I submit this to all of my creditors? Or who do I send this back to? I’m at early stage of applying for das/dpp but really worried about what happens when I cancel direct debits and start missing payments and the time from now to my application being finalised and first payment started. Hope that makes sense. Many thanks

StepChange_Rachael

Hi

Thanks for your message. I'm glad to hear you've started your journey to becoming debt free.

Yes, I’d recommend keeping the creditors up to date on where you are in the process, if the payments are due and they are missed due to cancelling them, then creditors will start to get in contact. If they know that you’re getting support from us and we’re helping you find a way forward, it’s much less likely they’d be in contact with you at all at this stage. Creditors will put the account on hold, usually for a minimum of 30 days and this gives you and us time to things in place and it will give you some breathing space.

If you want to discuss your plan in more detail you can always speak with an advisor, and you can find our contact details here.

Thanks
Rachael

needtodothis2020 wrote: »

Hi,
I have made the first steps this morning and phoned stepchange and made a plan with them.
I am just waiting on the documents to come through that advises me on what to do next.
My question is should I contact all my creditors and advise them that I am involved with stepchange and I am entering a DMP or should I wait?
I have already cancelled all my direct debits this morning and now am able to try and build up a bit of an emergency fund.
Many Thanks

StepChange_Rachael

Hi

Thanks for your message.

I'd recommend explaining to the creditors where you are in the process. Creditors will normally put accounts on hold for 30 days when you’re exploring your debt options with a third-party and give you breathing space in the interim. You can find more out about breathing space here. Depending on your advice we do include a template letter you can use with your creditors in your personal action plan, template letters to creditors are also accessible through the StepChange website. You can send this to your creditors asking for this hold, or phone them and ask for it verbally.

With a DASS/DPP, as it’s a more formal solution, supported by the Scottish government, if the creditors decided to start going down the court process during the time it takes to set it up, then there is a more formal hold that can be put in place to stop them. However, it’s not usually necessary as we find creditors to be very reasonable in the interim and put the accounts on hold themselves during the process where they are kept up to date. Creditors will usually only go down the court route as a last resort.

If you do want to speak with an advisor directly regarding your plan, you can find our contact details here.

Thanks
Rachael

scot23 wrote: »

Hi can I ask a quick question re a moritorium (?spelling). Do I submit this to all of my creditors? Or who do I send this back to? I’m at early stage of applying for das/dpp but really worried about what happens when I cancel direct debits and start missing payments and the time from now to my application being finalised and first payment started. Hope that makes sense. Many thanks

User_060921

Bit frustrated. Tried unsuccessfully to get through 4 or 5 times over the past two days and i have had no reply to the email send through my online portal.

I think i will be leaving the step change process and doing this myself. After the initial help and reassurance, its been a mixed bag (at best) since.

Momo89

Hi there,

I currently have £12.5k in debts with consist of 3 credits cards all at 0% and a Zopa loan.

Tesco card- £3200 credit limit and I owe £2974- 0% for 28 months
Virgin Credit card £2200 credit limit and I owe £1855-0% for 20 months
Halifax credit £1800 credit limit and I owe £1600- 0% for 18 months

Zopa loan £5500 currently paying £140 per month for 5 years. I have been using quite a lot of my credit for personal circumstances such as repairing my car, shopping, travel and gambling sometimes online casino- such as money transfers. I have never miss one single payment, no defaults ever recorded and CCJs. I currently owned a 2 bed flat with HTB with my partner and we are looking to sell it by next year or so to move into a 3 bed house. During December, I have made few credit applications for debt consolation loans but were all rejected due I been doing quite few applications. I have checked my credit report and it is now quite poor due the fact of my credit utilisation and credit applications. At the moment, I am currently paying minimum repayments on all credit cards. I know after 3-4months, my credit score might be a bit fair where I see what options might be available to me.

Because I have the intention to move into a new property by next year or so, a new mortgage application will need to be made which might be hard for me. I want to know if a debt consolidation loan might be useful for me or a secured loan on my property, but I am sure if secured loan works with help to buy.

I have no idea about secured loan and want to ask, what if I opt for a secured loan for 12.5K for 7-8years, interest might be lower and my repayment will be less I will use it as debt consolidation loan to pay all those credit cards and Zopa loan. My question is that, if ever I need to sell my currently property, do I need to pay the rest of the secured loan or the full amount I have borrowed before or after making the sell. Secondly, if I go for a new mortgage application, would I be able to add this secured loan onto the new mortgage. Please I would really be grateful if someone could be able to give me the correct advice, I really want to be debt free. Thank you.