Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Rachael

Hi

Thanks for posting on the forum.

It can be difficult to reduce the credit total when the minimum payments are a struggle. If your granddaughter feels there is money available to pay over the minimum, then this is the best route to reduce the debt total without impacting her credit file.

I’d recommend overpaying towards the debt with the higher interest rate first to reduce the total debt needing to be paid back overall. Some people choose to look at credit transfer options, where cheaper products might be available with reduced or even 0% interest for a time. Please be aware there is usually a one off fee for this and an application can be rejected. This isn’t something I can advise of but there is plenty of support and information on the MSE website if your granddaughter wanted to explore this option.

If your granddaughter does begin struggling further and the minimum payments do become a real problem, then I’d recommend speaking with a free debt organisation for support. We do have an online budgeting and advice tool, Debt Remedy, where your granddaughter can get advice anonymously if they’d prefer. There will be some impact on a person’s credit file when they make reduced payments from their contractual agreement, however, credit files can improve overtime as credit files tend to fluctuate over a person’s lifetime.

Thanks
Rachael

craftygran wrote: »

My granddaughter is a single parent with a 3 year old, she works 24 hours at the local hospital. She has just told me she owes approx £1000 on two credit cards and a catalogue and is only able to make the minimum payments which means the balances are not reducing. She is unwilling to ask for advice because she says if she does anything to reduce the payments it will affect her credit rating.

Should she pay minimum payments on 2 of the debts and pay any extra off the smallest one first.
Or should she look at the interest rates and pay minimum payments on the lowest rates and extra off the one with the highest rate.

StepChange_Rachael

Hi

Thanks for posting.

Sometimes gambling can have an impact when you apply for certain solutions, however, this is more likely to be insolvency solutions as these options are applying to have some of the debt written off. In a DAS DPP, you’ll pay back the full debt total, so it’s less likely there would be any impact in the application being rejected. Although creditors can reject a DPP, ultimately the decision if it goes ahead or not, is not up to them and can be accepted even without their approval, if it’s deemed the best solution for the debtor (you). I think it’s unlikely to have any great impact in it going ahead. If it was questioned then you’d have a reasonable argument to make, now you’re in work, have a solution to the debt through advice this has meant you have now stopped gambling.

Take care,
Rachael

anon24 wrote: »

Hi there. My husband and I are in the process of applying for a DAS in Scotland. We have went through all the figures and the potential saving for us is just phenomenal. And the best part is it pays off our creditors in 6 years instead of open ended/a lifetime on credit card minimum payments. As usual with me though, there is a problem. Because of all the debts and the worries over it. Coupled with me struggling to find work until 3 months ago, I got myself into a vicious cycle of gambling!! Sports betting mainly. Trying to earn some extra money to pay debts!! The result is that the 3 months bank statements ive sent show a lot of debit card payments to online bookies. I have not gambled in nearly a week now and I have absolutely no intention or interest in doing it again. My question is, is it likely to hamper any chance we have of getting accepted for this DAS? I am so so worried as the thought of my stupidity ruining this chance to finally see light at the end of the tunnel and start to live again, is just making me sick with worry. Can you help with any advice please?
Thank you

StepChange_Rachael

Hi

Thanks for posting on the forum and explaining your situation.

As you've mentioned, there are a few different things to take into account, such as your financial situation changing as you need to make plans regarding money for the move overseas. The equity in the property is another aspect to consider when finding the best way forward.To be able to give accurate advice an advisor would need an idea of your full financial situation and discuss these expected changes in detail to give accurate recommendations. In this case, I’d suggest speaking with a debt advisor and potentially also getting mortgage advice to have a clear understanding of your options going forward.

I’d always recommend getting free advice and if you do want to explore this route further then we can help at StepChange, you can find our contact details here. We also do have a mortgage team.

Thanks,
Rachael

mikeyeagle wrote: »

Hi, hoping for some help please!


Between my wife and I we have nearly £40k across 4 credit cards, overdrafts and a loan. This has largely been caused by my wife having to take a significant pay cut to study, whilst outgoings increased meaning on average there was a difference of almost £1100/month due to lower income and greater childcare costs.


We have equity in our house, and the longer term goal is emigration to Aus or NZ in the next couple of years, so in theory we could clear this and have enough left if we sold up, but the emigration process would cost a significant sums in total and we're struggling with outgoings.


Two cards have a few months zero% left, whilst the others are not on any deals as such - but those total about £20k. The overdrafts are around £2k each. I'm less worried about the loan in a way, as whilst it has about 4 yrs left, it's 3.5% - looking to consolidate some debts earlier today, we were being quoted rates around 16% or more.


Our fixed rate mortgage which I think was about 60-65% loan to value ends its fixed term at end July. we've previously consolidated credit cards used to finance home improvements so we've been warned it is unlikely to be agreed again.


Not sure how to proceed other than scrutinising every outgoing penny right now and I feel we're stuck in a rut we can't escape from....


Any advice would be appreciated, thanks in advance.

SSD92

Hi,

This year I am really trying to get my finances back in order and for the most part, it's going ok. Gradually getting there. Any account I have outstanding balances on, I have direct debit's set up so the balances are reducing.

However, I took a loan out of £525 with MyJar back in September 2018 but missed the first payment, my own fault. They sent the account to a debt recovery company fairly quickly where I set up a payment plan, at the time the balance was £763.87. I paid monthly, however one month my wages went in later in the day and I hadn't noticed the payment hadn't gone through that month until I received an email stating that the balance owed was now £849.90. At this point, I'll admit that I buried my head in the sand with the account. The balance owed now is £1020 which just seems outrageous for a £525 loan. Is there anything I can do? I called MyJar and explained that I would be happy to set up a payment plan for the £763.87 but the member of staff couldn't, or wouldn't do anything as it's with a different company now and I'd have to deal with them. I've tried and they send me back to MyJar. So I'm in a bit of limbo. Any advice would be appreciated.

DeeDee_5by5

Hi I have just started with Step Change, my first payment will go out 1st Feb,
a bout £60 for the credit card and £6 for the store card
I owe £8000 on a credit card and £500 on a store card
I have had some DWP back pay and can now pay off fully the £500 store card
if I pay £500 to the credit I owe £8000 to as well would Step Change be ok with that
would the creditors be ok with that as well , and do I pay it through Step Change.
do I phone and tell Step Change or go on line and tell them

sourcrates

DeeDee_5by5 wrote: »

Hi I have just started with Step Change, my first payment will go out 1st Feb,
a bout £60 for the credit card and £6 for the store card
I owe £8000 on a credit card and £500 on a store card
I have had some DWP back pay and can now pay off fully the £500 store card
if I pay £500 to the credit I owe £8000 to as well would Step Change be ok with that
would the creditors be ok with that as well , and do I pay it through Step Change.
do I phone and tell Step Change or go on line and tell them

Your telling them here as you've posted in their advice thread.

hixyhicks

Im going to get into persistent debt problems with some cards.I have never missed a payment but im starting to get post and emails saying i need to pay more which i cant.Firstly can card companies at this stage make me pay more or cause me to default by upping the payments?what i was hoping to do is.Pay the smaller amounts of first whilst paying the minimum on the others then adding the monies to the next.I would just like to know what to expect.

Thank you

Abi83

Hi,
Hope this is the right place to ask this question. I wouldn't exactly say that I'm struggling with debt but I recently took out a loan to do some home improvements. The cost, as always, increased and so I also borrowed some money from my parents. I originally wanted to remortgage in order to do the work but was told that I couldn't as there wasn't enough equity in the house. Having had the work done there is now equity in the house to remortgage in order to pay off the loan and my parents however I have been told by Santander that they don't allow remortgaging to consolidate debts. I'm currently tied in to this mortgage until Aug 2023 and although I can afford to pay all debts without consolidating, it would make life much easier if I could put them on the mortgage. Is there any way around this? Are there any debt consolidation mortgages anymore? I'd just rather pay one 'lump sum' per month rather than my mortgage, my loan repayments and money to both my parents ��
Any advice would be greatly appreciated ��

alila91

I'm new to Forum's, so I hope I'm doing this right I would like some advice on my current financial situation. I currently have around 16,000 of debt across three credit cards.

I have recently emigrated abroad (outside the EU) and now have no UK income and only enough income from a temp job to afford my rent and bills in my new home.
I have 1,500GBP left in my UK account which I have been using to pay my Credit Card min payment each month but that will run out shortly.

I was wondering if a settlement option may be an option for me if I can borrow funds from a family member? How much is a good amount/percentage to offer?

StepChange_Allen

SSD92 wrote: »

Hi,

This year I am really trying to get my finances back in order and for the most part, it's going ok. Gradually getting there. Any account I have outstanding balances on, I have direct debit's set up so the balances are reducing.

However, I took a loan out of £525 with MyJar back in September 2018 but missed the first payment, my own fault. They sent the account to a debt recovery company fairly quickly where I set up a payment plan, at the time the balance was £763.87. I paid monthly, however one month my wages went in later in the day and I hadn't noticed the payment hadn't gone through that month until I received an email stating that the balance owed was now £849.90. At this point, I'll admit that I buried my head in the sand with the account. The balance owed now is £1020 which just seems outrageous for a £525 loan. Is there anything I can do? I called MyJar and explained that I would be happy to set up a payment plan for the £763.87 but the member of staff couldn't, or wouldn't do anything as it's with a different company now and I'd have to deal with them. I've tried and they send me back to MyJar. So I'm in a bit of limbo. Any advice would be appreciated.

Hi there

Thanks for your post.

The first thing I'd do here is ask for a statement of what you've paid, and all the interest and charges added. The maximum a payday loan can increase with all interest and charges is 100%, unless court action has been taken; these would be in addition to that 100%.

If you haven't got a CCJ (county court judgment) for the debt, then the maximum you should have to pay back to a £525 loan is £1050. As you've already made some payments, unless it's a CCJ, £1020 seems wrong, so I'd query it as stated above.

If the charges that have gone on are above 100%, excluding any legal costs, then you can make a complaint to them. I'd recommend doing this in writing, either by post or e-mail, and keep a copy of your complaint.

I hope this helps.

Allen