Struggling with debt? Ask a stepchange debt adviser a question

Carlywales76

Aidan   thanks soooo much I just hope that they will accept that this reality,  the finance department for the lease are the most threatening,  it will be a reassurance that they can wait. So far they have agreed to wait till January 2021...
I will contact yourselves to talk through my plan today ,
Thanks 😊 feeling a little more positive 

StupidFool89

I’ve stupidly ran up a large debt on 2 credit cards as well as a loan and need to decide whether a DMP or a secured loan is the better option? Any advice on which is the better choice in both the short and long term? 

I’ve spoken to Payplan who have advised that a DMP is possible as the debt is becoming unaffordable. I spoke to an advisor about a Secured Loan and their rates are ok.

I can’t remortgage as I’ve consolidated a small amount in the last 5 years and require to wait before doing this at the end of my fixed rate, thinking I couldn’t borrow on my mortgage I have secured a new fixed rate already but still have this other debt

StepChange_Aidan

StupidFool89 said:

I’ve stupidly ran up a large debt on 2 credit cards as well as a loan and need to decide whether a DMP or a secured loan is the better option? Any advice on which is the better choice in both the short and long term? 

I’ve spoken to Payplan who have advised that a DMP is possible as the debt is becoming unaffordable. I spoke to an advisor about a Secured Loan and their rates are ok.

I can’t remortgage as I’ve consolidated a small amount in the last 5 years and require to wait before doing this at the end of my fixed rate, thinking I couldn’t borrow on my mortgage I have secured a new fixed rate already but still have this other debt

Hi,

Thanks for posting.

I wouldn’t recommend replacing the unsecured debts with a secured loan. If you’re struggling to afford the credit cards and loans, paying a reduced payment to your creditors through a DMP could be a better option.

I can see that you’ve started another thread in which you’ve posted your SOA. This seems to show that (after adjusting the TV licence to £13) there’s enough money remaining in your monthly budget to afford the contractual payments to your credit cards and loan. Is that correct? If it is, another option could be to aim to increase the monthly payments to the cards and clear them faster by making reductions to some of the living costs, if possible.

The amount you’ve entered for food is lower than I would normally expect for two adults, so I would definitely recommend reviewing the figures on your SOA before you make a decision. 

If you need help with your budget or would like to discuss your options with StepChange, please get in touch.

Kind regards,

Aidan

Laura721

Hi. I have £25k debt started 3 years ago. If a family member allowed me to borrow £5k to pay off some, could I then get a Debt Relief Order?
I do not own a home and am currently unemployed due to COVID with an 11 month old and on Universal Credit and I do not see my circumstances changing any time soon.
Just wondering what the best thing to do is.

InDebted2U_2

Hello. I'm down to my last debt, having had substantially reduced offers for the others, which I was able to pay. The final creditor won't accept my offer of repayment, or give me a settlement figure. They want me to send them my financial details so they can work out a monthly payment figure. I just want to settle the debt and move on. Do I have to send them financial information? Are there any other options?

StepChange_Aidan

Laura721 said:

Hi. I have £25k debt started 3 years ago. If a family member allowed me to borrow £5k to pay off some, could I then get a Debt Relief Order?
I do not own a home and am currently unemployed due to COVID with an 11 month old and on Universal Credit and I do not see my circumstances changing any time soon.
Just wondering what the best thing to do is.

Hi Laura,

Thanks for your post.

To qualify for a Debt Relief Order (DRO), your total debt must be less than £20,000. If you borrow £5,000 to pay off some of the debts, the money owed to your family would then count as another debt and keep you above the £20,000 limit.

If your family are willing to give you the money, it may be a better option to pay £680 and apply for bankruptcy to write off the debts. 

Before you make a decision, I would recommend getting in touch with a debt advisor to talk through your options. If you’d like to get advice from StepChange, our contact details are here.

I hope this helps.

Aidan

StepChange_Aidan

InDebted2U_2 said:

Hello. I'm down to my last debt, having had substantially reduced offers for the others, which I was able to pay. The final creditor won't accept my offer of repayment, or give me a settlement figure. They want me to send them my financial details so they can work out a monthly payment figure. I just want to settle the debt and move on. Do I have to send them financial information? Are there any other options?

Hi,

You don’t have to provide your financial details to the creditor, but they are less likely to agree to an offer without them. 

If you’re paying the debt in instalments, the creditor will want to see your income and expenditure to show that you’re offering them a reasonable amount based on what you can afford after covering your priority bills and essential living costs. They may also ask for these details to help them to decide whether or not to accept a settlement offer.

There could be other options available to tackle this debt, but we would need to know more about your situation to give a recommendation. You can get help from StepChange using our online tool or give us a call if you’d like to talk with a debt advisor.

I hope this helps.

Aidan

littletedwest

Bit of a long one. When my mum and dad split up she bunged me some money separate for emergencies and for her funeral and his when the time came.

 

No issue to me at the time. I had debts but was earning enough to pay them. If it was my money I'd have spent that rather than borrowing 

Now I can't,  I was earning about 30k a year I'm now earning about 1200 quid a month.

 

The problem is I now look like I have savings, the money isn't mine. To make it worse if I return the money it'll look highly suspect.

 

Any ideas?

StepChange_Aidan

littletedwest said:

Bit of a long one. When my mum and dad split up she bunged me some money separate for emergencies and for her funeral and his when the time came.

 

No issue to me at the time. I had debts but was earning enough to pay them. If it was my money I'd have spent that rather than borrowing 

Now I can't,  I was earning about 30k a year I'm now earning about 1200 quid a month.

 

The problem is I now look like I have savings, the money isn't mine. To make it worse if I return the money it'll look highly suspect.

 

Any ideas?

Hi,

Thanks for your post. 

I can certainly help, but I’ll need some more details to understand your situation before I can give advice.

In what way is the money causing a problem? Are creditors asking you to pay more towards your debts because they believe that you have savings available? 

Are you concerned that the funds would be counted as an asset if you were to apply for an insolvency option (such as bankruptcy or DRO), or is it affecting your entitlement to benefits?

If you’re struggling to afford the regular payments to your debts, one option could be to offer a reduced monthly amount through a Debt Management Plan (DMP). In a DMP, you’re not required to inform the creditors about your assets in your name. There will be other solutions available to you, but this will depend on your individual circumstances.

You can reply to this post, but it would be better to have a full discussion with a debt advisor. If you’d like to call StepChange, our contact details are here.

Aidan

bluebell_on_track

Hello. If on a DMP, is there ever the point where you can offer creditors a final settlement figure that’s less than you owe or if you still owe £6700 they’d want exactly that as a final settlement? Thanks