Struggling with debt? Ask a stepchange debt adviser a question

MojoTheJester

Hi, new member here.
I got a loan in April 2020 to clear my previous debts, buy a car and do some household improvements. The repayments were less than the total repayments of all my previous debts combined, so I was better off each month. Then when lockdown happened, I had to use my credit cards (that I'd just cleared) for a few purchases after my partner lost her job (agency, company wouldn't furlough her). 

Now I'm at the point where I'm paying my loan, and the credit cards, but then having to use the credit cards for food, so the balance just isn't going down.

If I stay doing what I'm doing, the loan will be paid off in 4 years, then the credit cards will be able to get paid off with the money saved from paying the loan. This would take 5 years in total, but I have no spare money for anything other than bills, debts and fuel, and using the credit cards for food.

This week I was offered a 5 year IVA at around £350 a month. This is a massive saving over the £523 loan repayment and £500 to both credit cards each month.

Both options will take 5 years.

 I rent my house and own my car, my income is £2000 a month, debt repayments are £1023, rent is £475, then there's the council tax, utilities, fuel, insurance, etc

Should I just carry on struggling with the repayments or go ahead with the IVA?

Dave, Lancashire

StepChange_Allen

MojoTheJester said:

Hi, new member here.
I got a loan in April 2020 to clear my previous debts, buy a car and do some household improvements. The repayments were less than the total repayments of all my previous debts combined, so I was better off each month. Then when lockdown happened, I had to use my credit cards (that I'd just cleared) for a few purchases after my partner lost her job (agency, company wouldn't furlough her). 

Now I'm at the point where I'm paying my loan, and the credit cards, but then having to use the credit cards for food, so the balance just isn't going down.

If I stay doing what I'm doing, the loan will be paid off in 4 years, then the credit cards will be able to get paid off with the money saved from paying the loan. This would take 5 years in total, but I have no spare money for anything other than bills, debts and fuel, and using the credit cards for food.

This week I was offered a 5 year IVA at around £350 a month. This is a massive saving over the £523 loan repayment and £500 to both credit cards each month.

Both options will take 5 years.

 I rent my house and own my car, my income is £2000 a month, debt repayments are £1023, rent is £475, then there's the council tax, utilities, fuel, insurance, etc

Should I just carry on struggling with the repayments or go ahead with the IVA?

Dave, Lancashire

Hi Dave

Welcome to the forum and thanks for posting.

Thanks for giving some insight into your current situation. When considering which way to go with debts, there are a lot of things to consider. The current budget is key to that, but potential/likely changes in circumstances for better or worse are another factor.

We'd be more than happy for you to register with us free of charge, have a debt advice session with us and we can present all your options and make a no obligation recommendation. We'd go through your budget in full depth to get a really good understanding of your situation. We offer IVAs ourselves when they're suitable for you, and we charge no fees up front unlike many companies. Obviously if you were eligible and decided to do an IVA, you could still choose the place you've already spoken with if you wished.

One slight word of caution I would give though is that there have historically been IVA companies that put people onto IVAs when they aren't really suitable, which can make things a lot worse. I've spoken to such people myself. So please tread carefully when offered an IVA, particularly if this is the only solution that the company offers.

If you'd like to register with us, please visit www.stepchange.org and you can start over the phone or online, whenever you're ready.

I hope this is helpful.

Allen

simpo1981

Hi, 
My husband and I had a DMP from 2007 which we paid off early in 2017. As far as we were concerned, everything on that DMP had been paid. However, I am now getting letters from a company called Link Financial regarding a loan I apparently took out in 2005, with Lloyds Banking Group (says it's an AA loan). This is in my maiden name, I have been married for 14 years, and I have no recollection in taking this loan out. I contacted them ages ago as received a letter from Kearns Solicitors, and spoke to a snotty woman and I asked her to send me the details of the loan as I don't remember taking one out. I've not received this letter. That debt goes back to 2005, so 17 years ago. As far as I was concerned, all our debts were included in this DMP, so I don't understand why this is still outstanding. I really don't know where I stand with this? I the received a letter dated 11/05/21 from Link Financial, telling me that they we're going to issue legal proceedings as I hadn't made a payment plan with then. How do I make a payment plan for a debt that is not in my legal name, for a debt I don't remember having and for a debt that if I had, would have been in my DMP which is now clear and closed? 

Any help or advice would be appreciated! Thanks! 

StepChange_Allen

simpo1981 said:

Hi, 
My husband and I had a DMP from 2007 which we paid off early in 2017. As far as we were concerned, everything on that DMP had been paid. However, I am now getting letters from a company called Link Financial regarding a loan I apparently took out in 2005, with Lloyds Banking Group (says it's an AA loan). This is in my maiden name, I have been married for 14 years, and I have no recollection in taking this loan out. I contacted them ages ago as received a letter from Kearns Solicitors, and spoke to a snotty woman and I asked her to send me the details of the loan as I don't remember taking one out. I've not received this letter. That debt goes back to 2005, so 17 years ago. As far as I was concerned, all our debts were included in this DMP, so I don't understand why this is still outstanding. I really don't know where I stand with this? I the received a letter dated 11/05/21 from Link Financial, telling me that they we're going to issue legal proceedings as I hadn't made a payment plan with then. How do I make a payment plan for a debt that is not in my legal name, for a debt I don't remember having and for a debt that if I had, would have been in my DMP which is now clear and closed? 

Any help or advice would be appreciated! Thanks! 

Hi there

Welcome to the forum and thanks for posting. 

I can understand that receiving this contact must have come as a shock, when you believed that all of your debts were cleared. There are a number of things to mention here, so I'll try and go through them in a sensible order.

Firstly, it's important to say that the supposed debt being in your maiden name wouldn't have any relevance to this as a change of name has no effect on a debt and a person's liability for it. The first key question is whether you did actually borrow the money or not, and as you say, this is something you don't recall. I'm sure that if you knew you had this debt at the time, you'd have included the debt in your DMP, but this in itself doesn't prove that the debt wasn't yours; sometimes debts are forgotten about and left off debt solutions.

What you can do is to request a copy of the initial credit agreement from Link - they'd have to go back to Lloyds/AA to obtain this. If they can't provide it, then the debt would be legally unenforceable, so they wouldn't be able to issue legal proceedings against you for it. If they do provide it, and it was a debt that you took out, then we move on to another aspect of this. 

Debts become 'statute barred', in other words, legally unenforceable, after 6 years without a payment or written acknowledgment of the debt. Again, this means that they cannot do anything to make you pay the debt. If this debt wasn't on your DMP, it seems likely that you haven't paid or acknowledged the debt since at least 2007. You can send creditors a letter claiming that a debt is statute barred, and asking them to stop chasing you for the debt if they can't prove that it isn't. You can find an example letter on our website. 

I hope this is helpful and all makes sense.

Allen

simpo1981

StepChange_Allen said:

simpo1981 said:

Hi, 
My husband and I had a DMP from 2007 which we paid off early in 2017. As far as we were concerned, everything on that DMP had been paid. However, I am now getting letters from a company called Link Financial regarding a loan I apparently took out in 2005, with Lloyds Banking Group (says it's an AA loan). This is in my maiden name, I have been married for 14 years, and I have no recollection in taking this loan out. I contacted them ages ago as received a letter from Kearns Solicitors, and spoke to a snotty woman and I asked her to send me the details of the loan as I don't remember taking one out. I've not received this letter. That debt goes back to 2005, so 17 years ago. As far as I was concerned, all our debts were included in this DMP, so I don't understand why this is still outstanding. I really don't know where I stand with this? I the received a letter dated 11/05/21 from Link Financial, telling me that they we're going to issue legal proceedings as I hadn't made a payment plan with then. How do I make a payment plan for a debt that is not in my legal name, for a debt I don't remember having and for a debt that if I had, would have been in my DMP which is now clear and closed? 

Any help or advice would be appreciated! Thanks! 

Hi there

Welcome to the forum and thanks for posting. 

I can understand that receiving this contact must have come as a shock, when you believed that all of your debts were cleared. There are a number of things to mention here, so I'll try and go through them in a sensible order.

Firstly, it's important to say that the supposed debt being in your maiden name wouldn't have any relevance to this as a change of name has no effect on a debt and a person's liability for it. The first key question is whether you did actually borrow the money or not, and as you say, this is something you don't recall. I'm sure that if you knew you had this debt at the time, you'd have included the debt in your DMP, but this in itself doesn't prove that the debt wasn't yours; sometimes debts are forgotten about and left off debt solutions.

What you can do is to request a copy of the initial credit agreement from Link - they'd have to go back to Lloyds/AA to obtain this. If they can't provide it, then the debt would be legally unenforceable, so they wouldn't be able to issue legal proceedings against you for it. If they do provide it, and it was a debt that you took out, then we move on to another aspect of this. 

Debts become 'statute barred', in other words, legally unenforceable, after 6 years without a payment or written acknowledgment of the debt. Again, this means that they cannot do anything to make you pay the debt. If this debt wasn't on your DMP, it seems likely that you haven't paid or acknowledged the debt since at least 2007. You can send creditors a letter claiming that a debt is statute barred, and asking them to stop chasing you for the debt if they can't prove that it isn't. You can find an example letter on

I hope this is helpful and all makes sense.

Allen

Hi Allen, 

Thank you for replying. That all really helpful and informative. 
With regards to the debt. I contacted Link ages ago regarding this, as I said I wanted a copy of the debt as I didn't remember ever taking it out, they then sent me a copy of an agreement, but half if it was missing and the signature panel was illegible and the name couldn't be made out. 

I am sure this debt was included in the DMP at some stage, why it dropped off or wasn't paid, I don't know. We paid the plan off, and everything that was on it when we closed it was paid in full. Where do I stand with this? I received a letter over the weekend from Kearns solicitors who stated that they were passing the debt back to Link. Can I go down the statue barred route with this? 

I am finding the whole thing really confusing and stressful, we worked so hard to get that plan paid off, that to now have a debt agency contact me for money on a debt I don't ever remember having is really difficult! 

Thank you again.

StepChange_Patience

simpo1981 said:

StepChange_Allen said:

simpo1981 said:

Hi, 
My husband and I had a DMP from 2007 which we paid off early in 2017. As far as we were concerned, everything on that DMP had been paid. However, I am now getting letters from a company called Link Financial regarding a loan I apparently took out in 2005, with Lloyds Banking Group (says it's an AA loan). This is in my maiden name, I have been married for 14 years, and I have no recollection in taking this loan out. I contacted them ages ago as received a letter from Kearns Solicitors, and spoke to a snotty woman and I asked her to send me the details of the loan as I don't remember taking one out. I've not received this letter. That debt goes back to 2005, so 17 years ago. As far as I was concerned, all our debts were included in this DMP, so I don't understand why this is still outstanding. I really don't know where I stand with this? I the received a letter dated 11/05/21 from Link Financial, telling me that they we're going to issue legal proceedings as I hadn't made a payment plan with then. How do I make a payment plan for a debt that is not in my legal name, for a debt I don't remember having and for a debt that if I had, would have been in my DMP which is now clear and closed? 

Any help or advice would be appreciated! Thanks! 

Hi there

Welcome to the forum and thanks for posting. 

I can understand that receiving this contact must have come as a shock, when you believed that all of your debts were cleared. There are a number of things to mention here, so I'll try and go through them in a sensible order.

Firstly, it's important to say that the supposed debt being in your maiden name wouldn't have any relevance to this as a change of name has no effect on a debt and a person's liability for it. The first key question is whether you did actually borrow the money or not, and as you say, this is something you don't recall. I'm sure that if you knew you had this debt at the time, you'd have included the debt in your DMP, but this in itself doesn't prove that the debt wasn't yours; sometimes debts are forgotten about and left off debt solutions.

What you can do is to request a copy of the initial credit agreement from Link - they'd have to go back to Lloyds/AA to obtain this. If they can't provide it, then the debt would be legally unenforceable, so they wouldn't be able to issue legal proceedings against you for it. If they do provide it, and it was a debt that you took out, then we move on to another aspect of this. 

Debts become 'statute barred', in other words, legally unenforceable, after 6 years without a payment or written acknowledgment of the debt. Again, this means that they cannot do anything to make you pay the debt. If this debt wasn't on your DMP, it seems likely that you haven't paid or acknowledged the debt since at least 2007. You can send creditors a letter claiming that a debt is statute barred, and asking them to stop chasing you for the debt if they can't prove that it isn't. You can find an example letter on

I hope this is helpful and all makes sense.

Allen

Hi Allen, 

Thank you for replying. That all really helpful and informative. 
With regards to the debt. I contacted Link ages ago regarding this, as I said I wanted a copy of the debt as I didn't remember ever taking it out, they then sent me a copy of an agreement, but half if it was missing and the signature panel was illegible and the name couldn't be made out. 

I am sure this debt was included in the DMP at some stage, why it dropped off or wasn't paid, I don't know. We paid the plan off, and everything that was on it when we closed it was paid in full. Where do I stand with this? I received a letter over the weekend from Kearns solicitors who stated that they were passing the debt back to Link. Can I go down the statue barred route with this? 

I am finding the whole thing really confusing and stressful, we worked so hard to get that plan paid off, that to now have a debt agency contact me for money on a debt I don't ever remember having is really difficult! 

Thank you again.

Hi there

Thanks for getting back in touch.

I'm sorry to hear about what has happened and I understand completely how confusing and stressful it must be, especially as you said you worked hard to clear the debts.

As Allen mentioned, debts become 'statute barred', in other words, legally unenforceable, after 6 years without a payment, no written acknowledgment of the debt and no enforcement (e.g. a county court judgement CCJ). If the debt was potentially missed off the plan, it could be statute barred.

It may be worthwhile going back to the debt management plan (DMP) provider and seeing if they have a copy of the debts that were included in the plan. You could use this as proof that either the debt has been settled or if this debt isn't listed, it may be worthwhile using the statute barred template in the link my colleague posted.

When a creditor sends a copy of the CCA agreement, it needs to be a copy or a 'true' copy which shows things like the terms and conditions of the loan. If the copy you've received is ineligible and the creditor did take further action to recover the debt, you may have a defence. 

I hope this helps a little, please get back to us if you need any further help.

Patience

jittersandbang

Hope you can help i am at my wits end.  My Son, a recovering alcoholic of three years was entirely reckless through his drinking days and unfortunately its come to bite him (or should i say, me) in the bum.  He has sofa surfed for a number of months now, has had no fixed abode and accrued debts from the last place he could call 'home'.  The walls were mouldy so he refused to pay part of his rent till it was fixed.  It never was so he was evicted.  I believe owing money meant he could no longer get a council property.  He moved in with his girlfriend just before Christmas and split with her 3 weeks later.  He is now living in the back of a van, a van he has no licence for.  Doing work cash in hand and decided he wasnt going to pay maintenance for his daughters as his ex wouldnt let him see them.
Now the point is.  I had a bailiff turn up at my door several months ago over an unpaid fine.  Knowing nothing about bailiffs and debts i chose to pay his fine rather than let them in to seize goods in my house.  They told me there was a locksmith on his way and a van to take my posessions.  Letters had been sent they said but it was during the first lockdown and i cant remember if i returned letters to sender or gave them to my Son.  Skip forward to now.  Ive recently had a number of letters sent to the address addressed to my Son.  Unfortunately or fortunately they were opened by my other Son who has the same initial in his forename.  The child support agency are now threatening him with further action over unpaid child maintenance.  I phoned the CSA and explained the position.  My Son hasnt lived with me for 20 years and she explained that when a person isnt contactable they go through government formailities.... looking for last known addresses.  Hence the letters came to my address.  Of course ive read the riot act to my Son but that doesnt stop these things falling back on me.  Ive told him he's got to go to a homeless shelter and start the process of getting back into civilization again and take responsibility for his actions.  My husband is furious, rightly so and heres me frightened to open the front door.
So my Question is, how do i get my Son unlinked from my address?

StepChange_Aidan

jittersandbang said:

Hope you can help i am at my wits end.  My Son, a recovering alcoholic of three years was entirely reckless through his drinking days and unfortunately its come to bite him (or should i say, me) in the bum.  He has sofa surfed for a number of months now, has had no fixed abode and accrued debts from the last place he could call 'home'.  The walls were mouldy so he refused to pay part of his rent till it was fixed.  It never was so he was evicted.  I believe owing money meant he could no longer get a council property.  He moved in with his girlfriend just before Christmas and split with her 3 weeks later.  He is now living in the back of a van, a van he has no licence for.  Doing work cash in hand and decided he wasnt going to pay maintenance for his daughters as his ex wouldnt let him see them.
Now the point is.  I had a bailiff turn up at my door several months ago over an unpaid fine.  Knowing nothing about bailiffs and debts i chose to pay his fine rather than let them in to seize goods in my house.  They told me there was a locksmith on his way and a van to take my posessions.  Letters had been sent they said but it was during the first lockdown and i cant remember if i returned letters to sender or gave them to my Son.  Skip forward to now.  Ive recently had a number of letters sent to the address addressed to my Son.  Unfortunately or fortunately they were opened by my other Son who has the same initial in his forename.  The child support agency are now threatening him with further action over unpaid child maintenance.  I phoned the CSA and explained the position.  My Son hasnt lived with me for 20 years and she explained that when a person isnt contactable they go through government formailities.... looking for last known addresses.  Hence the letters came to my address.  Of course ive read the riot act to my Son but that doesnt stop these things falling back on me.  Ive told him he's got to go to a homeless shelter and start the process of getting back into civilization again and take responsibility for his actions.  My husband is furious, rightly so and heres me frightened to open the front door.
So my Question is, how do i get my Son unlinked from my address?

Hi,

Thanks for your post. I’m sorry to hear about the situation, I understand this must be a stressful time for you.

Creditors will try to contact your son at his last known address. When he finds permanent housing he should contact his creditors to update his details, so that all future correspondence is sent directly to him.

For now, any letters you receive that are addressed to your son should be returned to the sender, with ‘not at this address’ written on the envelope. If you continue to receive letters from the creditors, you could make a complaint.

It’s important to remember that you are not in any way liable to repay your son’s debts.

It’s quite rare for a bailiff to be able to force entry into a property, and even then, they can only legally take goods belonging to the debtor. If you feel that the bailiff misled or unfairly pressured you into paying your son’s fine, you should make a complaint.

There’s some more information on what to do if you receive any further contact from creditors for your son’s debts here.

I’d recommend that you encourage your son to speak with a debt advisor to work out the best way of dealing with his debts. If he’d like to get in touch with StepChange our contact information can be found here. If he needs help in finding accommodation, I’d also suggest contacting Shelter for advice and support.

I hope this helps.

Aidan

DoingBetter

Hi,
I'm hoping you can advise.  I've been avoiding looking at old debt for years and years as it's such a trauma trigger for me.  When I was young I had a very well paid job but had no clue about money.  I'm autistic, but didn't know that at the time (it definitely had an input on how I lived) and I ran up store credit, credit cards and overdrafts - about £15k worth. I unexpectedly fell pregnant, had a baby and just after found out my bi-polar partner had run up 45k of debt. He went through bankruptcy proceedings. At the same time I sent letters to all my creditors and asked to pay £1 a month.  I've continued doing that for 16 years without ever looking at the accounts. Only one ever got nasty, and that was RMA when acting for Barclays, but nothing ever changed in payment terms. I am not even sure now what most of the accounts are for they've changed hands so often. We're on a very low income (I earn less than £8k a year), my student loans were written off at the start of this year.  Where do I start? There are 6 accounts I pay to, one for an old (student) barclays account that was 2.5k overdrawn, one for a barclaycard (about same), one for an Egg credit card, one for a Capital one credit card, and one store card. The 6th one, I literally can't remember what it was for. 

jittersandbang

Thank you Aiden for your reply and the links are most helpful.

''When he finds permanent housing he should contact his creditors to update his details, so that all future correspondence is sent directly to him''.

Ive been telling him this for months but he is favouring the burying his head in the sand approach.  This car he driving illegally....its such a worry.