Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Allen

Db33 said:

I have issues with paying my council tax arrears incurred as a result of Coronavirus.
I missed some payments last year and am having to pay £50 extra a month as a result. I am a very low earner and its a struggle.
My income is £1170 per month consisting of £1020 wages and £150 board payment from my son who receives universal credit.
My outgoings: £400 rent, £200 council tax, £160 gas/electric, £250 food, £27 broadband, £42 mobile phone, £13 tv licence, £23 loan payment, £10 work lunches, £104 tobacco, £100 credit card, £15 trade union.
this makes me -£174.
The council has passed the council tax debt to a sheriff officer who has added an extra £86 to the debt. I have been a council tenant since the age of 17 and am now 39 and have never been in arrears with rent or council tax until now.
my brother was in arrears and was able to pay it at £10 per month.  my neighbour has never paid council tax and is not being pursued.  My work colleague didnt pay council tax for 10 years.
It is a struggle and i feel i am being treated unfairly in comparison to others i have spoken to

Hi there

Thanks for posting.

I'm sorry to hear that you're struggling with your council tax and finances in general. I can understand that you feel you're being treated unfairly when other people you know are paying less than you, both regularly and towards arrears. I can't say whether what you're paying is right or not, but if you feel it isn't, I'd contact your council and ask them for an explanation as to why your bill is what it is. Most council websites give a breakdown of how much each council tax band is, and then the benefit element is applied for separately, if applicable.

If you feel that you'd benefit from some free debt advice, where we can have a look at your overall situation and recommend steps to take to get on top of things, please visit www.stepchange.org - you can register over the phone or online. We can give advice on dealing with the sheriff as well, if needed.

I hope this is helpful.

Allen

cazza35

Hi, My fiance and me both work but I had a stroke a couple of years ago and have had to go job share. We have over £30000 debts but are up to date on household bills, mortgage. I am waiting on Trust deed Scotland calling me back to see if we can arrange something with them. We are due to remortgage in the next couple of years and are worried about this. Are there any hints or tips you can give us before we commit to a trust deed or is there a better way to do this. We dont live an extravagant lifestyle at all, both our cars are paid off but are 08 plates. Really scary as you think that both working we should be at least comfortable 🤷‍♀️ and we have an 11 year old that has what she needs and isn't greedy, thank goodness but would love to not have to constantly worry about money when she asks for something. thanks in advance

StepChange_Aidan

cazza35 said:

Hi, My fiance and me both work but I had a stroke a couple of years ago and have had to go job share. We have over £30000 debts but are up to date on household bills, mortgage. I am waiting on Trust deed Scotland calling me back to see if we can arrange something with them. We are due to remortgage in the next couple of years and are worried about this. Are there any hints or tips you can give us before we commit to a trust deed or is there a better way to do this. We dont live an extravagant lifestyle at all, both our cars are paid off but are 08 plates. Really scary as you think that both working we should be at least comfortable 🤷‍♀️ and we have an 11 year old that has what she needs and isn't greedy, thank goodness but would love to not have to constantly worry about money when she asks for something. thanks in advance

Hi,

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

A Trust Deed is a form of insolvency available in Scotland where you make reduced payments to your debts over four years. After this, any remaining debt is written off.

It’s important to note that your home and vehicles can be affected in a trust deed. Your assets would be transferred to a trustee and may be sold to raise money to repay your creditors. Your home can be sold if there is equity, but the trustee may consider other options, such as equity release or allowing a third party to buy your interest in the property. You’re normally allowed to keep one vehicle as long as it’s worth less the £3,000.

A record of the trust deed will show on your credit file for six years, which can make it more difficult to remortgage.

If you wanted to avoid affecting your assets, an alternative option could be to set up affordable monthly payments to repay the debts through a Debt Payment Programme or Debt Management Plan. There could also be other solutions that are better suited to you and your fiancé, but I would need more information about your finances to be able to give a recommendation.

If you haven’t already, I’d suggest getting independent debt advice before you proceed with a trust deed. If you’d like to get help from StepChange, you can use our online advice tool or give us a call to speak with our Scottish Debt Advice team.

Kind regards,

Aidan

wannaberich41

Hi
Looking for financial advice if possible please?
A 20 year old Family member earns good money but is useless with money and just wastes it on god knows what.  

I’ve tried helping them and guiding them and they won’t listen.

In November they took out finance for a new car.  Probably about 18k.   However they’re about to loose their license and already in their overdraft. 

They also have other direct debits.

What advice can you give?
would they be best to give the car back?
cancel insurance?
what can be done with the remaining debt if they loose their job?
Bills and loans at their family address.
will the family be liable for the debts? 

StepChange_Allen

wannaberich41 said:

Hi
Looking for financial advice if possible please?
A 20 year old Family member earns good money but is useless with money and just wastes it on god knows what.  

I’ve tried helping them and guiding them and they won’t listen.

In November they took out finance for a new car.  Probably about 18k.   However they’re about to loose their license and already in their overdraft. 

They also have other direct debits.

What advice can you give?
would they be best to give the car back?
cancel insurance?
what can be done with the remaining debt if they loose their job?
Bills and loans at their family address.
will the family be liable for the debts? 

Hi there

Thanks for posting.

We can certainly give them some help and advice, but we'd need to assess their full financial situation in order to really answer most of those questions. They can register with us free of charge either online or over the phone, all details can be found at www.stepchange.org

There are various potential options to deal with the debts if they lose their job and can't afford to pay. Addresses are not affected by one person having debts there; one person's debt can only really affect someone else if those people are financially linked. Commonly this could be people that are married or that live together and have joint mortgages, bank accounts etc. The only way that the family could become liable is if they acted as guarantor for any of the debts.

I hope this is helpful, please feel free to direct them to our services if you wish.

Allen

Dragonish1980

Hi,

Quite a specific question this one. I have recently applied for a DMP through Step Change, and upon reviewing the paperwork have missed a credit card off. This wasn't intentional, and I realise I can add it on and regenerate the paperwork The card is used for pay for monthly living expenses only though, such as food or petrol, for the sole purpose of being able to pay by credit card for extra protection. The card has a £250 limit, which I pay in full on payday, and then that cards only use is to pay for monthly ongoing expenses rather than using debit card. This was for added protection, and also to ensure one credit card was ticking over every month on my record.

Even upon realising whilst looking at the paperwork that this is missing, I had considered still using the card in the same way during the DMP. This was simply for added protection, especially when buying anything online, to know that it was through a credit card with a low limit so any sort of fraud could have a very limited impact. However, it did then occur to me that this may not look good if any other creditors check my file and see this one is singled out from the DMP, or if at any point it ends up in court (for a ccj or bankruptcy, for example).

Should I simply add this card to the list of debts in the DMP and let it be sorted this way, or is it ok to continue using it in the way that it is? I think I know the answer, but wanted to ask  

Thanks,

StepChange_Aidan

Dragonish1980 said:

Hi,

Quite a specific question this one. I have recently applied for a DMP through Step Change, and upon reviewing the paperwork have missed a credit card off. This wasn't intentional, and I realise I can add it on and regenerate the paperwork The card is used for pay for monthly living expenses only though, such as food or petrol, for the sole purpose of being able to pay by credit card for extra protection. The card has a £250 limit, which I pay in full on payday, and then that cards only use is to pay for monthly ongoing expenses rather than using debit card. This was for added protection, and also to ensure one credit card was ticking over every month on my record.

Even upon realising whilst looking at the paperwork that this is missing, I had considered still using the card in the same way during the DMP. This was simply for added protection, especially when buying anything online, to know that it was through a credit card with a low limit so any sort of fraud could have a very limited impact. However, it did then occur to me that this may not look good if any other creditors check my file and see this one is singled out from the DMP, or if at any point it ends up in court (for a ccj or bankruptcy, for example).

Should I simply add this card to the list of debts in the DMP and let it be sorted this way, or is it ok to continue using it in the way that it is? I think I know the answer, but wanted to ask  

Thanks,

Hi,

Thanks for your post.

In a Debt Management Plan, your creditors are being treated as fairly as possible and are each receiving a pro-rata share of the money you have available.

Although I understand why you’re using the credit card, I wouldn’t suggest excluding it from your DMP as that would show preferential treatment. There is a risk that the other creditors may view your credit report and could reject an offer from the DMP if they feel that they’re being treated unfairly.

I would recommend including the credit card in your DMP. If you give us a call, we will be able to add it to your list of debts and update your plan.

I hope this helps.

Aidan

User_060921

Hi .

I have a DMP with 9 debts totally £54k

one of those accounts has offered to settle for £2200 (£9721 balance) and I may be able to find that if push were to come to shove.

I know this is slightly unfair on the other 8 but I assume legally I can do that ?

StepChange_Patience

Fusterclucker said:

Hi .

I have a DMP with 9 debts totally £54k

one of those accounts has offered to settle for £2200 (£9721 balance) and I may be able to find that if push were to come to shove.

I know this is slightly unfair on the other 8 but I assume legally I can do that ?

Hi there

Thanks for your post.

As you aren't in an insolvency solution, technically you could make a lump sum to a debt if you so wished to. With that being said, as you mentioned your other creditors may see this as 'preferential treatment' or being unfair on the others. 

If you wish to discuss this further and are on a debt management plan (DMP) with ourselves, our Customer Services team will happily help. Our contact details are here.

I hope this helps.

Patience

scotty1971

My StepChange DAS has been running for about a year now. It is clearly noted that all correspondence from StepChange should be by email and not post. Last week I received a letter from StepChange as one of my debtors has been removed. Although I have emailed StepChange regarding this and also tried to phone I have had no reply. My yearly check is coming up soon, so how can I ensure this is sent by email? I have access a printer so can print of any documents needed and sign to send back. Hope you can help with this.
Thanks