Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Allen

NiteEyez1980 said:

Hi sir

I was posting on the other forum.

In effect I have 61k of unsecured debt accross 2 loans and multiple credit cards. 

My story is on there if you wnat to read it however the consensus of the posts there is to basically stop paying my unsecured debt now and not to contact my creditors.

Now I wanted to contact them, ask them to freeze interest and I'll pay 50% of the minnimum fee.

My wife is gripped with fear that we'll be late charged to death and have the bailiffs around (and that's equal a divorce) 

Any advice will be great as what wasn't said in the forum is what happens after I stop paying. The debt won't disappear and in my mind the above will happen. 

I havent had a decent night's sleep in 6 months worrying about thaix please help. 

For some info. Homeowner, have 6 kids (4 lil ones at home) driving 100m+ a day to work. Non smokers. No hobbies etc

Please help

Hello

Thanks for posting.

I haven't seen your other post as I'm not sure which forum it's on, but I think I can give you some general answers from the above post, at least in the form of scenarios.

If you're able to maintain at least your minimum payments, and ideally more, often the best advice is to do this.

If you can't maintain all the payments, and/or have fallen into arrears on household bills, OR you're up to date but only because you're cutting back on essential living costs and this isn't sustainable, then you need to get some debt advice and potentially look at a debt solution.

It is absolutely the WRONG advice to ignore creditors, I'm surprised if multiple people on here have recommended you ignore them, that's absolutely the worst thing you can do. The debts will escalate and may eventually result in further action being taken; for example CCJs, bailiffs (enforcement agents) and so on.

At StepChange we can provide you free advice; we'll just need a list of your debts and details of your income and expenses ands we can make recommendations of your options from there.

You can either call our new client Helpline free on 0800 138 1111 or start doing this online at www.stepchange.org

I hope we're able to help you.

Allen

richiec79

Good morning,

About 11 years ago I have three credit card debts get frozen, interest free.  I pay a small amount off them each month and have paid every payment on time.  The arrangement has not changed in the 11 years, but the debts have changed to different debt collection agencies several times. 

All three agencies have contacted me offering different partial payments to close the debts and I may be in a position to pay them off now.  As long as the amount agreed is low enough.

I am worried about a partial payment on my credit file as my credit records for at least 6 years have been great. If I accept a partial payment deal now, will the partial payment record still be in affect for the next six years?

Thanks

StepChange_Allen

richiec79 said:

Good morning,

About 11 years ago I have three credit card debts get frozen, interest free.  I pay a small amount off them each month and have paid every payment on time.  The arrangement has not changed in the 11 years, but the debts have changed to different debt collection agencies several times. 

All three agencies have contacted me offering different partial payments to close the debts and I may be in a position to pay them off now.  As long as the amount agreed is low enough.

I am worried about a partial payment on my credit file as my credit records for at least 6 years have been great. If I accept a partial payment deal now, will the partial payment record still be in affect for the next six years?

Thanks

Hi Richie

Welcome to the forum and thanks for posting.

From what you've said I'm presuming that these cards all defaulted back 11 years ago, so those defaults should have dropped off your credit file around 5 years ago. Therefore, I can't see any issues with your credit file if you take a reduced settlement at this stage.

If they were still on your credit file they'd be marked as partially settled, which could potentially go against you to some extent.

I hope this is helpful.

Allen

Dart123

Hi there, I currenlty have £16k debt on 3 credit cards.
I have 2 balance transfer cards but they are ending in the new year and I haven't cleared them, there is approx £5k on each, I have been paying the minimum off on these each month and haven't missed any payments.
Then I have another card (which is accumulating interest) which I've been paying £400 off each month but its at £5k too. I can pay £400 each month but I'd be far more comfortable if it was £300 payment (with the other required payments on top) as it's becoming a bit of a struggle with rising costs elsewhere though I've cut back where I can.
As my offers are coming to an end I'm worred about having 3 cards gathering interest and was wondering should I get another BT card to shift debt onto it and then cancel other cards?  My credit score is 972 so in the excellent category on Experian and I have some offers for other cards but I'm just concious of having too many credit cards when I already have 3. Does cancelling cards if debt is shifted off them impact your credit rating?  I just really want to work on getting this down as much as possible!  Many thanks!

StepChange_Patience

Dart123 said:

Hi there, I currenlty have £16k debt on 3 credit cards.
I have 2 balance transfer cards but they are ending in the new year and I haven't cleared them, there is approx £5k on each, I have been paying the minimum off on these each month and haven't missed any payments.
Then I have another card (which is accumulating interest) which I've been paying £400 off each month but its at £5k too. I can pay £400 each month but I'd be far more comfortable if it was £300 payment (with the other required payments on top) as it's becoming a bit of a struggle with rising costs elsewhere though I've cut back where I can.
As my offers are coming to an end I'm worred about having 3 cards gathering interest and was wondering should I get another BT card to shift debt onto it and then cancel other cards?  My credit score is 972 so in the excellent category on Experian and I have some offers for other cards but I'm just concious of having too many credit cards when I already have 3. Does cancelling cards if debt is shifted off them impact your credit rating?  I just really want to work on getting this down as much as possible!  Many thanks!

Hi there

Thank you for your post. 

Applying for new credit (such as the balance transfer cards) can have an impact on your credit rating temporarily. This article from Experian explains this in more detail.

With certain balance transfer deals, there can sometimes be an additional fee which is typically a percentage of the balance being transferred. If you are considering this, please make sure to use comparison websites and do your research for the best offer for you.

Same with applying for new credit, closing accounts down can sometimes impact your score too but this may also be temporary.

If you are looking to reduce the debt as much as possible, I can also suggest completing a budget. That way you know if the payments are affordable or if you're in a position to pay more than the minimum payment. You can find a free budget tool here.

If you're finding that you're struggling financially and need additional support, it may be worth seeking free and impartial debt advice. StepChange are a free charity who would gladly look at your situation to help you find the best way to deal with any debts you have. 

If you need their support, you can find out more information here.

I hope this helps.

Patience

Sam_X_10

Hi, 

I am completely new to all this and looking for some support really... 

I've realised that I'm just in above my head with debt. 

I've racked up about 50k in credit Cards and loans - although my partner does have some part to play in this, I feel that it is all my fault as I have just buried my head for so long. 

All I've really wanted to do is make my wife happy, but now I realise it's just making us miserable. 

I've told her this evening and I know she's angry and incredibly disappointed in me. She's trusted me wholeheartedly, and gone along with me spending after I reassure her all is okay. 

I can afford the repayments but I've got little left. My credit rating is down to fair, and I can't get a consolidation loan or balance transfers to reduce the costs. 

I could really do with some guidance please. 

My wife has an excellent credit rating but hasn't offered to apply for a loan so I guess she doesn't want to do that. 

Most of the debt is in my name, with around 10k in my wife's. 

Thank you for listening. 

StepChange_Allen

Sam_X_10 said:

Hi, 

I am completely new to all this and looking for some support really... 

I've realised that I'm just in above my head with debt. 

I've racked up about 50k in credit Cards and loans - although my partner does have some part to play in this, I feel that it is all my fault as I have just buried my head for so long. 

All I've really wanted to do is make my wife happy, but now I realise it's just making us miserable. 

I've told her this evening and I know she's angry and incredibly disappointed in me. She's trusted me wholeheartedly, and gone along with me spending after I reassure her all is okay. 

I can afford the repayments but I've got little left. My credit rating is down to fair, and I can't get a consolidation loan or balance transfers to reduce the costs. 

I could really do with some guidance please. 

My wife has an excellent credit rating but hasn't offered to apply for a loan so I guess she doesn't want to do that. 

Most of the debt is in my name, with around 10k in my wife's. 

Thank you for listening. 

Hi Sam

Thank you for posting.

I'm sorry to hear that things are a really tough at the moment, though I'm glad you've reached out for help. Often, realising there is a problem and then reaching out for help are the biggest hurdles to overcome.

The best thing to do is to come and have an advice session with us at StepChange. We'll take down details of your debts, income and spending, assess things, and then give advice, options and recommendations of the best steps to take. 

You can either call our Helpline or do things online if you're comfortable with that. Please see www.stepchange.org for details of how to get started with us.

We look forward to helping you.

Allen

The_Blonde_Marketer

Hi Stepchange, 

I have completed the stepchange online form and have called and asked for advice but was told that I was wasting their time as I am not in arrears. I'd love some advice on the best way forward please. 

I have got myself into a debt spiral as I have been out of work due to redundancy and covid. I am in a permanent and well paying job now but am keen to reduce my debt and especially make the debt as cheap as possible. My partner and I are hoping to purchase a property together this year and I am keen to either get a personal loan or a 0% credit card to make the debt I have cheaper - what is the best thing to do between the two? And will this make it more difficult to get a joint mortgage with my partner later this year? 

I currently have the  below debt - I can afford to pay for it each month but am paying too much on interest rather than repaying the debt:
 - £7k on Lloyds Credit Card
 - £2.6k on Amex - Cash Card
 - £10k on 0% interest Virgin Credit Card - 0% runs out in Jan 2024 
 - £7k on a personal loan with Sainsbury's

I would appreciate any advice as to what is the best course of action. 

Many thanks!
The Blonde Marketer
 

StepChange_Patience

The_Blonde_Marketer said:

Hi Stepchange, 

I have completed the stepchange online form and have called and asked for advice but was told that I was wasting their time as I am not in arrears. I'd love some advice on the best way forward please. 

I have got myself into a debt spiral as I have been out of work due to redundancy and covid. I am in a permanent and well paying job now but am keen to reduce my debt and especially make the debt as cheap as possible. My partner and I are hoping to purchase a property together this year and I am keen to either get a personal loan or a 0% credit card to make the debt I have cheaper - what is the best thing to do between the two? And will this make it more difficult to get a joint mortgage with my partner later this year? 

I currently have the  below debt - I can afford to pay for it each month but am paying too much on interest rather than repaying the debt:
 - £7k on Lloyds Credit Card
 - £2.6k on Amex - Cash Card
 - £10k on 0% interest Virgin Credit Card - 0% runs out in Jan 2024 
 - £7k on a personal loan with Sainsbury's

I would appreciate any advice as to what is the best course of action. 

Many thanks!
The Blonde Marketer
 

Hi there

Thanks for your post.

I'm sorry to hear you ended up in a debt spiral, being out of work and dealing with Covid sounds incredibly difficult. Whether someone is in arrears with their debts or not StepChange is always there to help, I'm sorry you were told you were wasting their time. 

If you feel you were spoken to unfairly it may be worth considering a complaint, you can find more information about the complaints process here.

It's great to hear you're in a stable job now and feel you're in a position to reduce your debt, however I can understand how it feels when you're paying too much on interest rather than the balance itself. Which has a handy guide on this which you can find here.

It sounds exciting that you're looking to get on the property ladder, when it comes to applying for a mortgage the lender is likely to look at affordability, risk and your credit file. Having debt doesn't necessarily impact your eligibility for a mortgage but a successful application may depend on how big the debt is and how well you've kept up with the repayments.

StepChange have a mortgage advice team who are entirely impartial and would happily have a look at your situation when you're ready. 

If you're concerned about taking out new credit before the mortgage application, now you have a budget it may be worth considering (if it's affordable) paying above the minimum payment on the credit cards to see if the balances can be reduced. 

I hope this has helped a little.

Patience

icarus_69

Hiya,

For various reasons I have built up a fair amount of credit debt. I am in a better place now - my income isn't incredible but I'm able to keep up with current repayments etc.

However, I feel that the current setup I have isn't as good as it could be, with regards to the interest I'm currently paying.

I'm hoping someone here can help by making some suggestions (e.g. balance and/or money transfer cards, loans to apply for).

My current credit score is just over 700. I am open to the idea of applying for new cards if this would help reduce the interest I'm having to pay.

Here's a breakdown of what I'm currently repaying:

Santander 39.94% EAR (variable):
- Balance -£1,862.96

Monzo - 33.4% per year / 39.0% EAR (variable):
- Balance -£288.92

MBNA - 28.1440% Simple annual rate (Purchases + Money Transfers) / 32.07% Effective annual rate (Purchases + Money Transfers):
- Purchases balance £635.55
- Money Transfer balance £222.21

PayPal Credit - 29.9% annual interest rate:
- Outstanding balance £205.29

PayPal "Pay in x" Promotional purchases (0% p.a. if paid within agreed timeframe/installments):
- Amount due £0.00 / Outstanding balance £346.85 (expiry of promotional 0% 26/01/23)
- Amount due £79.00 / Outstanding balance £152.60 (expiry of promotional 0% 07/03/23)

Any advice would be massively appreciated!