Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Aidan

scotty1971 said:

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 

Hi,

Thanks for your post.

I’m sorry to hear that you’ve received a letter from StepChange. If you’ve requested to be contacted by email only then you shouldn’t receive any letters from us.

There is a chance that some letters may be sent by the DAS Administrator, but in any case, we can request that they also contact you by email only.

I would recommend getting in touch with our DAS team, so they can look into this, check your plan and ensure that all future correspondence will be sent to you by email. You should receive a response to your email within 7 days, alternatively you could try calling again to speak with an advisor.

The annual review notification is normally sent by email.

I hope this helps.

Aidan

Rackelle

Hi,
I have stupidly managed to rack up about £50k of credit card debt. I’m not massively struggling with the repayments but they are obviously eating a huge chunk of my pay each month. 

We have a mortgage currently and have about £150k of equity in the house. The mortgage is not due for renewal for 3 years. Is a second, separate, mortgage an option? Is it a good idea, if paid off over a reasonably short period of time (i.e. 10 years not 25)? Can the mortgage only be in one persons name if the other mortgage is in two? As in would it “affect” both people or only the one who takes the mortgage? I’ve got myself into this mess and I want to avoid it impacting my OH but not sure that’s possible.

StepChange_Aidan

Rackelle said:

Hi,
I have stupidly managed to rack up about £50k of credit card debt. I’m not massively struggling with the repayments but they are obviously eating a huge chunk of my pay each month. 

We have a mortgage currently and have about £150k of equity in the house. The mortgage is not due for renewal for 3 years. Is a second, separate, mortgage an option? Is it a good idea, if paid off over a reasonably short period of time (i.e. 10 years not 25)? Can the mortgage only be in one persons name if the other mortgage is in two? As in would it “affect” both people or only the one who takes the mortgage? I’ve got myself into this mess and I want to avoid it impacting my OH but not sure that’s possible.

Hi Rackelle,

Thanks for posting.

A second mortgage to consolidate your debts is rarely a good option, as you’d be turning unsecured credit card debt into secured debt, which can put your property at risk of repossession if you fall behind on payments. You’re also likely to pay back more in the long run. It may be possible to get a second mortgage in your name only, but your OH would need to agree to the debt being secured against your home.

I can’t really say what would be a better option without knowing more about your financial situation. If you wanted to avoid affecting your OH and can afford to do so, you could continue making the contractual payments to your credit cards. Alternatively, if you feel that you may struggle in the future, debt solutions such as a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) may be more suitable for you.

I’d recommend getting full debt advice to understand your options. If you’d like some help from StepChange you can use our online tool or give us a call to speak with an advisor.

Kind regards,

Aidan

Abbafan1972

Hi there,

We have a debt management plan with Stepchange that have only been running for less than a month (the 1st payment was made 01/04), which includes 2 x credit cards (one in my name and one in my husbands name).  Today I have received a default notice for each credit card.  The arrears are about £50 odd each.  I don't know what to do, should I ignore, or get in touch with Step change to find out if the offers have been accepted.

I don't want a debt collector turning up at my door!

Should I get in touch with Stepchange and/or send copies of the letters them?

Thanks in advance. 

Rakrams3

Hello there

Just need your advice on my current situation. First, a little bit of background.

Up to February 2019, I came clean about my debt (Credit Cards, Overdraft, Store etc..) which came to around £15k. 
I had 3 credit cards that was maxed out (which I defaulted on 1) & Overdraft which I needed to pay off. My credit rating was poor & was turned down a consolidation loan from my bank.

Fast forward 2 years, I have managed to get a few 0% balance transfer credit cards & shifted my credit card debt & overdraft so I didn't pay any interest. My debt is down just under £5k, last card will be paid off in August. My credit rating is now good & all going well, be debt free by June 2022.

The thing I need advice on is that I defaulted on a Aqua credit card (Interest was high, went over credit limit, minimum payment did not cover the interest & eventually I couldn't pay). Link Financial purchased the debt from Aqua & arranged a payment plan of £75 per month (which gets reviewed every 12 months) which I have been doing for nearly 3 years. The debt itself is now under £4000. I left this as it is whilst I tried paying off my other credit card debt. Now the debt with Link will soon be my only debt.

Do I carry on paying the monthly payment plan each month whilst I save the money so I can make them a settlement offer or do I get a Credit Card or a money transfer Card (for a small fee) and pay them off ASAP & owe the card instead?

Thank you in advance

Richard

StepChange_Allen

Abbafan1972 said:

Hi there,

We have a debt management plan with Stepchange that have only been running for less than a month (the 1st payment was made 01/04), which includes 2 x credit cards (one in my name and one in my husbands name).  Today I have received a default notice for each credit card.  The arrears are about £50 odd each.  I don't know what to do, should I ignore, or get in touch with Step change to find out if the offers have been accepted.

I don't want a debt collector turning up at my door!

Should I get in touch with Stepchange and/or send copies of the letters them?

Thanks in advance. 

Hi there

Thanks for posting.

It's completely normal to receive default notices for debts that have been included in a DMP if they weren't already defaulted when you started it. This is because in the vast majority of cases, DMP payments are going to be lower than the contractual payments. Default notices have to be sent out by law, and don't mean any action is going to be taken, it's simply for information purposes.

There are no absolute guarantees that creditors won't take further action if you're on a DMP, but if they agree to the repayment plan, it's extremely unlikely that they would. However, it's very normal that the debts will get passed onto debt collection agencies at some point. If this happens, please let us know so we can redirect the payments, and drop the new company a line to let them know you're on a DMP.

I hope this helps.

Allen

StepChange_Allen

Rakrams3 said:

Hello there

Just need your advice on my current situation. First, a little bit of background.

Up to February 2019, I came clean about my debt (Credit Cards, Overdraft, Store etc..) which came to around £15k. 
I had 3 credit cards that was maxed out (which I defaulted on 1) & Overdraft which I needed to pay off. My credit rating was poor & was turned down a consolidation loan from my bank.

Fast forward 2 years, I have managed to get a few 0% balance transfer credit cards & shifted my credit card debt & overdraft so I didn't pay any interest. My debt is down just under £5k, last card will be paid off in August. My credit rating is now good & all going well, be debt free by June 2022.

The thing I need advice on is that I defaulted on a Aqua credit card (Interest was high, went over credit limit, minimum payment did not cover the interest & eventually I couldn't pay). Link Financial purchased the debt from Aqua & arranged a payment plan of £75 per month (which gets reviewed every 12 months) which I have been doing for nearly 3 years. The debt itself is now under £4000. I left this as it is whilst I tried paying off my other credit card debt. Now the debt with Link will soon be my only debt.

Do I carry on paying the monthly payment plan each month whilst I save the money so I can make them a settlement offer or do I get a Credit Card or a money transfer Card (for a small fee) and pay them off ASAP & owe the card instead?

Thank you in advance

Richard

Hi Richard

Thanks for posting.

Firstly, well done in getting your debts down from £15k to under £5k in 2 years, what a fantastic achievement. In terms of this remaining debt held by Link, the default that will be on your credit file for this debt will remain on there for 6 years from when it was added. Paying it off early won't remove it, though it should then be marked as satisfied. 

A partial settlement payment would be marked as such on your credit file, and may not be the best thing to do if you're trying to keep your credit file as good as possible. There's no right or wrong answer as such, but I think if it was me, I'd simply increase the payments to Link to something sensible and affordable but to clear it as quickly as I could. I don't see any benefit really of taking out a new card, especially if there's a fee, certainly id there's no interest being applied to the Link debt any more.

I hope this is helpful.

Allen

Emmaaar22

Hi, was wondering if you could help me please. I am a self employed self trader and I am looking to burrow around £1,500. However I am not eligable for any CC or loans and I believe I have a bad credit score. How can I solve this please? 

StepChange_Allen

Emmaaar22 said:

Hi, was wondering if you could help me please. I am a self employed self trader and I am looking to burrow around £1,500. However I am not eligable for any CC or loans and I believe I have a bad credit score. How can I solve this please? 

Hi there

Thanks for posting.

I'm afraid I can't really answer this question directly as it would depend on a lot of things. For example, how bad is your credit score? You can check by obtaining copies of your three different reports, free of charge. There's information on how to do this on the main MSE site. How do you know you're not eligible for loans and cards? Why is this, because of the credit score or the fact you're self employed? Any answer would probably also depend on what the money is needed for.

You could consider speak with Business Debtline (www.businessdebtline.org) if the money you need is in relation to your self-employment to see if there's anything they can suggest. 

All I can add is to be wary of other lending. If you can't access mainstream primary lending and have to look elsewhere, you may pay higher interest rates and potentially further damage your credit rating, as accessing secondary lenders can suggest financial difficulty.

I hope this is of some help.

Best wishes

Allen

Penguin_

Just a quick one, I am in a DMP with Stepchange but following reading on here I have sent off (today) CCA requests to the creditors on my DMP. I know, from reading on here, that some people on Self Managed DMP pay a tiny amount each month whilst waiting for the creditor to produce the CCA; am I able to do this even though I am with Stepchange?