Struggling with debt? Ask a stepchange debt adviser a question

trish1jones

Hi, sorry if this is on the wrong page, I’m struggling a little with this site!! My son had a bank loan and overdraft. His loan is at 18.7% and his overdraft charges are £67 a month! The amount of interest he is paying on both is very high, he has asked the bank to consolidate his loan and overdraft and take one loan at much lower APR and pay them both off to save money on the interest! The bank said no which is not helpful as he’s struggling with his payments. Any ideas on how he can get a new loan to consolidate both and save money and pay this debt off?

StepChange_Aidan

2cocktailsrach said:

I am really struggling in terms of budgeting. I changed my job which has seen me move from monthly pay to 4 weekly. I struggle every month to the point where I maxed out my credit cards to buy food. I am not entitled to benefits and only told my partner about the
is last month. He is very supportive but I feel like an idiot compared to him (earns more and has no debt at all) I have no savings.
before I changed my job I had an exact date when everything would leave my account the day after I was paid I knew exactly what I would have left and would mark them off my spreadsheet. Now I have things paid things waiting to be paid I am constantly checking to see if there is anything I’ve missed and to top it all off received a letter saying I owe over £200 for a broadband account from 4 years ago! I have asked for a breakdown of the amount 6 times and they are saying they don’t have it. I’m dreading when the schools reopen as I will have to pay for childcare again which will put me in a worse situation. I know I am lucky to be working still and to still have an income coming i worked really hard to get myself on track and I feel like it’s just one thing after another now 

Hi,

Thanks for your post. I’m sorry to hear that you’re struggling.

Budgeting can be difficult, particularly if you’re being paid 4-weekly but your expenses are coming out on a monthly basis. 

The first thing I would suggest is to create a full budget, to break down your income and all your outgoings on a calendar monthly basis. This will help to show you how much money needs to be set aside each month to cover all your essential living costs and the amount that will be left over for any debts. To convert your wage to a monthly average, you will need to multiply the 4-weekly amount by 13 then divide by 12.

There’s some more information on budgeting here, but if you’d like some additional help you could use our online tool to create a budget or give us a call to speak with an advisor.

You mentioned in your post that you’ve used credit cards to buy food. Is this something that happens regularly? If so, would your partner be able to contribute more towards the shopping or other shared expenses? If you owe money on credit cards, please bear in mind that these are non-priority debts, and you should only offer to pay them back what you can afford after you’ve covered the essential living costs.

If you disagree with the outstanding balance on the broadband bill and the creditor has been unable to provide a breakdown, I’d recommend making a complaint so it can be fully investigated. There’s a guide to disputing debts here.

I hope this helps.

Aidan

StepChange_Aidan

trish1jones said:

Hi, sorry if this is on the wrong page, I’m struggling a little with this site!! My son had a bank loan and overdraft. His loan is at 18.7% and his overdraft charges are £67 a month! The amount of interest he is paying on both is very high, he has asked the bank to consolidate his loan and overdraft and take one loan at much lower APR and pay them both off to save money on the interest! The bank said no which is not helpful as he’s struggling with his payments. Any ideas on how he can get a new loan to consolidate both and save money and pay this debt off?

Hi Trish,

Thank you for posting.

I wouldn’t recommend consolidation loans or taking out any new credit to pay off existing debts, as it usually makes things more difficult. Your son is likely to pay back more over the term of the loan and he may find it hard to find one with a lower rate of interest.

If your son is struggling with the payments to his debts, it might be a better option for him to set up a Debt Management Plan, where he would make one affordable monthly payment which goes towards paying off the loan and overdraft. 

There may be other debt solutions that are suitable, depending on your son’s financial situation. I’d recommend that he gets in touch with a Debt Advice organisation to understand his options. If he’d like to get help from StepChange, he can get advice online or give us a call to speak with an advisor.

I hope this helps.

Aidan 

laramh

I was wondering if I set up a debt management plan how is this affected if my partner was to live in with me? From what I gather it seems like he would have to contribute disposable income towards my debt?? Is this wrong? He has large debts of his own so I wouldn’t expect him to put money into my finances? How does it work? 

I have universal credit at the moment but I would lose that if my partner was to move in, as I would expect, but not sure how the logistics work with having another adult in the household? 

Thanks in advance 

StepChange_Allen

laramh said:

I was wondering if I set up a debt management plan how is this affected if my partner was to live in with me? From what I gather it seems like he would have to contribute disposable income towards my debt?? Is this wrong? He has large debts of his own so I wouldn’t expect him to put money into my finances? How does it work? 

I have universal credit at the moment but I would lose that if my partner was to move in, as I would expect, but not sure how the logistics work with having another adult in the household? 

Thanks in advance 

Hi there

Thanks for posting.

There are different ways that we can approach this, depending on the specifics of how your joint and individual finances work. From my experience, it's usually better to do a joint budget and get debt advice together when both people have debts. This way, we're getting a full picture of everything that's going on financially. 

It's possible to do a budget for just one person in a couple as well, although sometimes this can be harder to get right as it can be quite difficult to separate exactly who pays what, especially for costs that both people contribute to.

Ultimately, no-one has to pay someone else's debts, but for example if one person in a household can pay their debts fine, and the other one can't, perhaps the one that's managing can take on a higher share of the household bills and living costs.

If you'd like to get some advice, you can register free of charge and chat through your situation with us, and we can discuss the best way of helping you. Please visit www.stepchange.org for details on how to get started.

I hope this is helpful.
Allen

Zawa110

Im about to enter into to Iva agreement I would just like some advice from someone on here who knows about Iva’s is it a good idea or no? How will it affect my future? 

StepChange_Aidan

Zawa110 said:

Im about to enter into to Iva agreement I would just like some advice from someone on here who knows about Iva’s is it a good idea or no? How will it affect my future? 

Hi,

Welcome to the forum.

I wouldn’t be able to say whether or not an IVA would be a good idea for you, as it always depends on each person’s individual situation. Generally, an IVA may be suitable if you can afford to pay your creditors a reasonable amount each month, but not the full payment that they are asking for. It tends to be more of an advantage if you own assets that you want to protect, such as a home.

The IVA will show on your credit file for at least six years, so this will make it more difficult to obtain credit. It can also affect your job in some sectors such as the financial or legal industry. 

If you have equity in your home, you will be asked to remortgage, which could lead to a higher interest rate. If you’re unable to do this, you’ll be asked to make a further 12 months of payments. There is also a risk that your creditors could apply to make you bankrupt if the IVA fails.

Some IVA companies can over-sell the benefits of an IVA, as they stand to profit from the charges and fees. I’d recommend getting independent debt advice before you go ahead with the agreement. If you’d like to get help from StepChange you can use our online tool or give us a call to speak with an advisor.

There’s some more information about the pros and cons of IVAs here.

I hope this helps.

Aidan

bell2020

Hi we have a dmp with you, its been active for 5 years.

I have offered full and final settlement offers to the creditors and have paid 2 of them today. I updated the balaances on the dmp account to show £0.00 however it says pending!? What does this mean? Thanks

StepChange_Aidan

bell2020 said:

Hi we have a dmp with you, its been active for 5 years.

I have offered full and final settlement offers to the creditors and have paid 2 of them today. I updated the balaances on the dmp account to show £0.00 however it says pending!? What does this mean? Thanks

Hi,

Thanks for your post.

When you change the debt balances on Online DMP, the status will show as ‘pending’ while the system is updating your information.

Your account should now be updated, and the two settled debts will be removed from your DMP. If you need any further help with the online system, please let us know.

I hope this helps.

Aidan

bell2020

StepChange_Aidan said:

bell2020 said:

Hi we have a dmp with you, its been active for 5 years.

I have offered full and final settlement offers to the creditors and have paid 2 of them today. I updated the balaances on the dmp account to show £0.00 however it says pending!? What does this mean? Thanks

Hi,

Thanks for your post.

When you change the debt balances on Online DMP, the status will show as ‘pending’ while the system is updating your information.

Your account should now be updated, and the two settled debts will be removed from your DMP. If you need any further help with the online system, please let us know.

I hope this helps.

Aidan

Thank you so much! I've been unable to log into my account today as it says there is an issue, but I'll keep checking.

Thanks