Struggling with debt? Ask a stepchange debt adviser a question

Clemmie12A

Are StepChange now called Wellness please 

StepChange_Allen

Clemmie12A said:

Are StepChange now called Wellness please 

Hi Clemmie

Thanks for posting.

No, we're still StepChange and as far as I know we have no plans to change name in the near future. May I ask what made you think we may have changed?

Best wishes

Allen

[Deleted User]

Hello, I'm on a DMP - however i only have 35 budgeted a month for emergencies which probably isn't enough if i have an unexpected car repair bill, is it reasonable to decrease my payments to creditors and increase my emergency fund allocation?

StepChange_Patience

Deleted_User said:

Hello, I'm on a DMP - however i only have 35 budgeted a month for emergencies which probably isn't enough if i have an unexpected car repair bill, is it reasonable to decrease my payments to creditors and increase my emergency fund allocation?

Hi there

Thank you for your message, I hope your debt management plan (DMP) is otherwise running okay.

If your DMP is with us and you need to make any changes to your budget, such as an emergency fund or adjusting what you need for your car maintenance, you can either update any changes online or our Aftercare team would gladly support you. 

A DMP is a flexible solution and it's important that it continues to be affordable for you.

You can find our contact details here. 

I hope this helps.

Patience

Jasper_Cat_2

 Hi, 
I have finally got to the point where the outgoings are larger than what is coming in and having used my savings to compensate... I am now at almost zero savings and no way to continue to pay the monthly payments on the credit cards. 
Up to now all bills and mortgage are paid, no missed payments and paying only just a bit more than the monthly required payments on 5 credit cards ( totalling £20,000).
I have now completed the initial Step Change forms to take out a DMP. Not yet completed the final forms to start the process. The online review says the budget is fair based on single person outgoings ( although now I have everything down on paper I think I can make some further savings), but it just leaves £217 a month for debts so at that amount will take 7 years, 9 months to pay.
My questions are - 
I have 3 of the biggest monthly payments due on 30th September. Having read through some of the threads on here the consensus seems to be to first stop paying now so that the card companies issue a default, and then complete the DMP?
I understand a default only stays on file 6 years but AP is 6 years after final payment. 
Do I at least send a letter to explain I am unable to pay and in the process of arranging DMP?
And once all have defaulted - then arrange DMP?
Also just trying to change bank account to another as currently with Lloyd's which I also have credit card debt with.
I have an unused account with Halifax, would it be safe to move wages to there even though they are in same banking group?
Sorry for so many questions, just trying to get it right, I don't want to fall deeper into debt with the high interest being charged, but  I do want to pay back  everything I own and hope gradually I can increase the payments eventually to reduce the years needed to pay. 
Thanks 

StepChange_Allen

Jasper_Cat_2 said:

 Hi, 
I have finally got to the point where the outgoings are larger than what is coming in and having used my savings to compensate... I am now at almost zero savings and no way to continue to pay the monthly payments on the credit cards. 
Up to now all bills and mortgage are paid, no missed payments and paying only just a bit more than the monthly required payments on 5 credit cards ( totalling £20,000).
I have now completed the initial Step Change forms to take out a DMP. Not yet completed the final forms to start the process. The online review says the budget is fair based on single person outgoings ( although now I have everything down on paper I think I can make some further savings), but it just leaves £217 a month for debts so at that amount will take 7 years, 9 months to pay.
My questions are - 
I have 3 of the biggest monthly payments due on 30th September. Having read through some of the threads on here the consensus seems to be to first stop paying now so that the card companies issue a default, and then complete the DMP?
I understand a default only stays on file 6 years but AP is 6 years after final payment. 
Do I at least send a letter to explain I am unable to pay and in the process of arranging DMP?
And once all have defaulted - then arrange DMP?
Also just trying to change bank account to another as currently with Lloyd's which I also have credit card debt with.
I have an unused account with Halifax, would it be safe to move wages to there even though they are in same banking group?
Sorry for so many questions, just trying to get it right, I don't want to fall deeper into debt with the high interest being charged, but  I do want to pay back  everything I own and hope gradually I can increase the payments eventually to reduce the years needed to pay. 
Thanks 

Hi Jasper

Thanks for your post.

I'm sorry to hear that you're struggling and that your savings have run out. I'm glad you've found a suitable debt solution with us though.

There's absolutely no need to wait for the debts to default before starting a DMP, the sooner you start it, the better, if that's your recommendation.

A default drops off a credit file after 6 years from when it was entered on there, it's definitely not from the final payment. I'm not sure what you mean by AP?

You can contact your creditors to advise them of the DMP, or you can apply for the government Breathing Space scheme, which can stop any interest/charges and further action for up to 60 days whilst setting up a debt solution. This should have been explained and offered to you when we went through your debt advice, but if you haven't set it up with us, you can do so by calling us back.

You're fine to use the Halifax account despite it being the same banking group, yes.

I hope all this is helpful. Good luck with your DMP.

Allen

Pearcyovmidd

Hi, not sure where to start, but I've come to a point where the debt my wife and I have is over £80k, upto now we've been managing it, but getting to a point where we're again using credit cards to fund the payment of other debts, which is crazy, we have 4 to 5 credit cards, which have been on minimum payment for quite a while now with the majority of the debt being on loans of varying lengths.  I am the main breadwinner as such as my wife is on benefits as she is severely disabled and receives PIP, I've tried to manage the debt best I can, but with the higher costs for food, energy, etc, we need help to either push forward with bankruptcy or a Debt Management Plan. The debt does keep me up at night hence why I'm sending this now, we are not in arrears with any of the debt, I realise my credit file will take a beating, but that is fine.

My questions are first, what options do we have, is a debt management plan the best option, or is bankruptcy easier. We rent and do not own our property, which we've lived in for 6 years, we have a car on motorbility.

Any helpful advice and best options to move forward with are appreciated.

StepChange_Aidan

Pearcyovmidd said:

Hi, not sure where to start, but I've come to a point where the debt my wife and I have is over £80k, upto now we've been managing it, but getting to a point where we're again using credit cards to fund the payment of other debts, which is crazy, we have 4 to 5 credit cards, which have been on minimum payment for quite a while now with the majority of the debt being on loans of varying lengths.  I am the main breadwinner as such as my wife is on benefits as she is severely disabled and receives PIP, I've tried to manage the debt best I can, but with the higher costs for food, energy, etc, we need help to either push forward with bankruptcy or a Debt Management Plan. The debt does keep me up at night hence why I'm sending this now, we are not in arrears with any of the debt, I realise my credit file will take a beating, but that is fine.

My questions are first, what options do we have, is a debt management plan the best option, or is bankruptcy easier. We rent and do not own our property, which we've lived in for 6 years, we have a car on motorbility.

Any helpful advice and best options to move forward with are appreciated.

Hi,

Thanks for your post. I’m sorry to hear that the debts are keeping you up at night. Hopefully we can help.

I agree that it’s not a good idea to use credit to pay off other debts. Your living costs need to take priority over payments to your creditors. If you’re struggling to meet the minimum amount, I would recommend cancelling any existing payment arrangements for now and just paying what you can afford to each debt.

A Debt Management Plan is an arrangement we can make to make an affordable payment to your creditors each month. It’s a solution that we tend to recommend if you can clear the debts in a reasonable amount of time, so this will depend on how much is remaining in your monthly budget after covering your priority expenses and living costs.

Bankruptcy is a legal process to write off your debts and would be suitable if you feel that it will take a long time to repay them. The process to go bankrupt will depend on where in the UK you live, and you and your wife would normally be required to pay a fee.

I can’t say which is the better option for you and your wife without knowing more about your specific incomes, living expenses, and individual debts. Depending on your situation and where you live, there could also be some other debt solutions available to you.

Before you decide, I would recommend getting debt advice to review your options. If you’d like to use StepChange you can use our website to create a budget and get help online, or you can give us a call to speak with an advisor.

I hope this helps.

Aidan

Pearcyovmidd

Thanks Aidan I have started I’m the Step Change online process just waiting for my wife’s pip letter then we can upload.  Hope to speak to someone from step change next week 

thanks Phil 

bekah89

Hi, I just wanted some advice about my debts and whether I should consider a DMP. I owe just over £10k over three credit cards and a little bit of a overdraft. £4k at 21% and the rest is interest free although £3k is ending in January 2022 but I think I'll be able to get another balance transfer card at 0% to transfer some of it. At the moment I can afford just over £300 per month which covers the minimum payments and a bit more. But it will leave me a long time in debt, I think atleast 4 years depending on how much I can transfer. I didnt know whether I should consider a DMP or not as it's not so bad that I cant afford the payments but I just cant seem to get the balances down very quickly. I dont want to default as it will affect my credit rating, my credit score is quite good. Should I carry on as I am and try and get a balance transfer or apply for a DMP? I'm just worried about the increase of interest that will come in January so not sure what my minimum payments will rise to. 

Thank you