Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Aidan

Rainbowtrousers said:

Hello and thanks in advance for any help you are available to offer .... 
Wow where to start?! I am almost embarrassed to share my story but I am a 42 year old lawyer (so bankruptcy and other debt consolidation options unlikely to be applicable) who has never budgeted and has been living far beyond his means for many years.
Currently - loan to high street bank (£25,000), 2 credit cards (both 0% until September 2021), parents (£10,000) and car finance (£8,000).
I do work and after bills I have about £750 per month left over. That includes minimum payment on the credit cards and full monthly payment on the loan (£650 per month due to expire in four years i think). I can return the car in march 2022 and not have to pay the £8,000. 
I am just curious how i go about tackling the other debts that are due. A second job? 
Do feel slightly embarrassed by this but hoping someone here can offer help.
Would love love love to be debt free and have savings (for the first time ever!)
I have two spare rooms but hate having housemates (even though that could generate circa £850 per room per month)
I have a weekly cleaner and some other pretty silly outgoings
As i type this the above just sounds a little loco - good to get some help ....
I still have my sense of humour which is good 

Hi,

Thank you for your post.

When you say that you have £750 per month left over after you’ve covered your bills, does that also include money for other spending items such as food, clothing and leisure activities? Before we can give any recommendations, we would need some more details so we fully understand your finances. You could put together a budget using our online tool or if you’d prefer to discuss your situation with an advisor you can give us a call.

Due to working in law, you’ve ruled out bankruptcy, but do you have any restrictions on other types of insolvency, such as an IVA (Trust Deed in Scotland) or less formal debt solutions like Debt Management Plans? 

I hope this helps.

Aidan

StepChange_Aidan

ironchest said:

I Am really really hoping somebody can help me here, I’m messaging on behalf of my parents who are in a right state.

They are 60 and 65, both in low paid jobs working 50+hours a week.  

they own a property with an interest mortgage that has £100k left on it, the Big problem is that have accrued £20k of debt on 3 high rate credit cards (Barclays is the biggest)

the interest means they are literally living hand to mouth despite the hours they do.  They can’t see a way out, selling wouldn’t leave them enough to buy a house and they can’t get a new mortgage or loan due to their age apparently so they are stuck in this trap.

this has left my dad with a lot of health issues Due to the stress but he works to pay the interest, so this is a plea for somebody to help provide any options that can help with this

Genuine thanks in advance 

Hi,

Thanks for posting. I’m very sorry to hear about your parents’ situation and I hope we can help.

While mortgage payments are always a priority, credit cards are unsecured and your parents should only offer to pay the lenders what they can comfortably afford, even if that means paying less than the contractual amount and defaulting on the debts.

If they’re struggling to meet the minimum payments to the cards, one option would be for them to set up a Debt Management Plan to make one monthly payment to their unsecured debts based on what they can afford after covering their priority bills and living costs.

Alternatively, an Individual Voluntary Arrangement (IVA) could be suitable. This would be a formal agreement between your parents and their creditors to make reduced payments to the creditors. After five or six years the remaining debt is written off. IVAs are available in England, Wales and Northern Ireland. In Scotland, the equivalent is a Trust Deed.

There may be other solutions that are appropriate for your parents’ situation, but this would depend on their specific circumstances and where they live in the UK. I’d recommend that they have a conversation with a debt advisor to understand their options. If they’d like to contact StepChange our details are here.

I hope this helps.

Aidan

StepChange_Aidan

sarahg8 said:

Hi, I have debt of 32k across loans and credit cards. I was made redundant this week and now sick with worry with how I am going to pay required payments each month. My redundancy is only £1k. I am living at home - but don’t want this to effect my mother’s flat. I need some help desperately 

Hi Sarah,

I’m sorry to hear that you’ve lost your job. 

We can certainly help you, but we’d need to know more about your income, expenses and debts before we can give any recommendations. It would be better if you get in touch with us so we can help put together a budget and make a plan to deal with the debts.

Will you be able to afford the minimum payments to your debts this month? If not, I’d suggest contacting the creditors to explain the situation, let them know that you’ll be seeking debt advice and ask them to give you 30 days of breathing space. If you have any payment arrangements (such as direct debit or standing order) you could cancel them through your bank and just pay directly what you can afford for now. 

Your mother shouldn’t be affected by debts in your name (unless she’s a guarantor). If you’re concerned about a possible visit from bailiffs, please bear in mind that for unsecured debts (such as loans and credit cards) this is preventable and the creditors would have to go through a number of stages to reach that point which could take months or years.

I hope this helps.

Aidan

JCswans

Hi
I've just put paperwork through for a DMP. I've got a Halifax loan (8k) that's I've reloaned on, credit cards from m&s, Barclaycard, MBNA, Argos card, Very account, the list goes on... 

It's in excess of £21k, I'm making minimum payments now, but that's all I can afford and I'm finding myself struggling to pay anymore than that, though I really want to. None of the debts I have will be paid off in a couple of months even if I did have £500 to throw at them. 
I'm quite a stress head and the fact I got out of debt 2 years ago apart from the loan to pay off my credit card and overdraft makes me mad that I've allowed myself to get in to this mess again. 
Even though the Stepchange site has said that the DMP is my best option that I qualify for,  does the fact I can make minimum payments and live around my debts and stay out of my overdraft make it less likely I'll get respite to pay my debts over the 5 year protected period? 

Thank you for your advice 

StepChange_Aidan

JCswans said:

Hi
I've just put paperwork through for a DMP. I've got a Halifax loan (8k) that's I've reloaned on, credit cards from m&s, Barclaycard, MBNA, Argos card, Very account, the list goes on... 

It's in excess of £21k, I'm making minimum payments now, but that's all I can afford and I'm finding myself struggling to pay anymore than that, though I really want to. None of the debts I have will be paid off in a couple of months even if I did have £500 to throw at them. 
I'm quite a stress head and the fact I got out of debt 2 years ago apart from the loan to pay off my credit card and overdraft makes me mad that I've allowed myself to get in to this mess again. 
Even though the Stepchange site has said that the DMP is my best option that I qualify for,  does the fact I can make minimum payments and live around my debts and stay out of my overdraft make it less likely I'll get respite to pay my debts over the 5 year protected period? 

Thank you for your advice 

Hi,

Thanks for your post.

A Debt Management Plan is an informal arrangement. Creditors will normally agree to freeze interest and charges and not take further action, but we can’t guarantee that they will.

If your budget shows that you’re technically able to make the contractual payments to the debts, creditors will have less incentive to agree and could continue to add interest and charges.

If you’ve used our online tool but are unsure about the recommendation, it would be best to give us a call so you can discuss your budget and options with an advisor.

I hope this helps.

Aidan 

Dandytf

I'de like to ask as almost final year of what has become 7-8 year Step Change DMP.
Is seeking another Mortgage/property move realistic or unrealistic one or 2 years after dmp completion.
I'm due to call Step change Mortgage Solutions 2nd time during 2021.
t.i.a.

StepChange_Aidan

Dandytf said:

I'de like to ask as almost final year of what has become 7-8 year Step Change DMP.
Is seeking another Mortgage/property move realistic or unrealistic one or 2 years after dmp completion.
I'm due to call Step change Mortgage Solutions 2nd time during 2021.
t.i.a.

Hi,

Thanks for posting.

When you’ve completed your DMP and your debts are cleared, your credit file will improve and it will become much easier to get a mortgage. Some of your debts may have already dropped off your credit file if they defaulted more than six years ago.

I’d recommend getting in touch with us so we can discuss your DMP and next steps in more detail. Our Financial Solutions team can give expert advice on mortgage options.

I hope this helps.

Aidan

Weimsrock

Hello hoping you can advise..
ive been on a DMP with SC since April 2019 and it has been good but still very tight on budget. I have no emergency funds saved and this month has been a terrible mess. Both dogs requiring expensive veterinary treatment, with one unfortunately not making it and so cremation costs as well. In total it has been £1200 which I couldn’t afford, I had to borrow off friends and family with the promise of paying back in a month to two months. On top of this my car has broken down and I can’t take it to get fixed for 3 weeks until next pay day. Obviously there is Christmas on the horizon also, albeit it’ll be homemade gifts at this rate. My question is whether if I miss 2 months payments or just make nominal payments will my DMP be cancelled? I have missed 2 out of 19 payments since starting, both of which were also due to vet fees. 

StepChange_Aidan

Weimsrock said:

Hello hoping you can advise..
ive been on a DMP with SC since April 2019 and it has been good but still very tight on budget. I have no emergency funds saved and this month has been a terrible mess. Both dogs requiring expensive veterinary treatment, with one unfortunately not making it and so cremation costs as well. In total it has been £1200 which I couldn’t afford, I had to borrow off friends and family with the promise of paying back in a month to two months. On top of this my car has broken down and I can’t take it to get fixed for 3 weeks until next pay day. Obviously there is Christmas on the horizon also, albeit it’ll be homemade gifts at this rate. My question is whether if I miss 2 months payments or just make nominal payments will my DMP be cancelled? I have missed 2 out of 19 payments since starting, both of which were also due to vet fees. 

Hi,

Thanks for your post. I’m sorry to hear about your situation and I hope we can help.

A DMP can be cancelled if payments are missed regularly. If you’re struggling to afford the monthly payment or would like to pay a reduced amount, please give us a call first so we can review your budget and discuss your options.  

Kind regards,

Aidan

bexx_00

Hi,
I’m 30, FT employed with no house/mortgage. I live with my partner and essentially pay him ‘board’. 

I have credit card and overdraft debts of £17,000. 

Most of these have now expired on the 0% and all interest payable. 

I have recently tried to calculate to pay fixed amounts each month to pay them off within the next 4 years, some sooner. 

I have recently changed my accounts so I have an account which i transfer all the ddi amounts for the CC payments each month. 

Then have a separate account for my (spends). 

I have previous issues with spending and credit cards when I had depression and still have bad habits now which I’m trying to stop!
I am good at paying my payments each month and have never missed a payment,( more spending and adding to the CCs when I’d clear with a 0% balance transfer. )

However I’m now wondering if i should get a debt consolidation loan to pay them all off (7 CCs)  and just have the one debt?
would I be eligible (I’m not eligible for any 0% CCs atm) and would this be the best thing to do? 

Tia