Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Aidan

TroubleWithTribbles said:

StepChange_Patience said:

TroubleWithTribbles said:

Hi. I hope that you can help.  My 90 year old Mum has a DMP with Money Plus Advice for a good number of years and we have just completed an annual review and agreed a new payment going forward.  I only found out about all of this recently due to my father passing away in September and having to get more involved with sorting finances.  From what I can see, her current debt stands at about £11000

My concern is that she is paying a hefty monthly fee to this company and I have received recommendation through the forums to cancel payments to them and to transfer to a new DMP through Stepchange.

Is this possible and is it a simple enough procedure?  I would like to cancel the SO to Money Plus Advice and advise them that we no longer require their services, but I don't want to rush into things and maybe inadvertently create a problem.

Your advice would be very much appreciated.

Many Thanks.

Hi there

I'm sorry to hear about your dad passing away, I can understand how difficult it must be for your family at the moment. Thank you for sharing your mums situation.

A debt management plan (DMP) isn't a legally binding solution so she would be welcome to cancel it if she feels that the plan is no longer suitable for her and she's unhappy paying a fee each month leaving less to go towards her debts. 

You can find out more about cancelling a DMP here.

It would be worth supporting your mum to have a look at the terms and conditions to ensure there aren't any cancellation fees (these should be reasonable) and it's likely that she may not get a refund of the fees already paid. Once it's cancelled Money Plus Advice would advise her creditors that the plan has ended.

With that being said, if you're looking for StepChange to support her after this, if you make her creditors aware she's seeking free advice, they may give some discretionary time for her to do this or we could potentially support her with Breathing Space while she's getting debt advice or setting up a new solution. 

When you're both ready we'd gladly have a look at her situation to help her find the best way to deal with her debts, you can access our online tool for advice or alternatively we'd happily help over the phone. You can find the best way to contact StepChange here.

I hope this helps. 

Patience

Thank you very much for your advice.  I have checked the T&C's with the existing DMP provider and there do not appear to be any cancellation fees involved.  I understand if (and when) I cancel with Money Plus Advice that they will in turn inform the creditors of this but I do not want them to become nervous that payments to them have ceased, but rather that there will be continuity.  If we complete an online application with yourselves, approximately how long does it take for the new DMP to become fully functioning and the creditors to be notified of this?  Currently, the next payment is due to be made on 1st May and I am wondering whether this should be cancelled or to let it stand and a new DMP in place before 1st June.  Again, your advice is very much appreciated.

Regards

Hi,

Typically, it takes around 1-2 weeks to set up a DMP after all the required information has been received. Once it’s activated the creditors would be notified of the new plan.

I’d suggest cancelling the fee charging DMP as soon as possible. It’s unlikely that creditors would act straight away, but if you wanted to maintain continuity, I’d recommend contacting them directly to explain that your Mum is moving to a new plan with StepChange and that we will be in touch with more details soon. She could also make affordable payments to the debts directly for now.

Depending on her situation, your Mum may also qualify for the Breathing Space scheme. This is a government scheme which would place the debts on hold for up to 60 days, giving her additional time to get a new DMP in place.

Kind regards,

Aidan

sourcrates

@StepChange_Aidan,

I must apologise for jumping on your debt advisors thread, but do you really think it is appropriate for a 90 year old lady to have to struggle with consumer credit debt repayments at her time of life ?

Her age and circumstances alone should be reason enough for her creditors to write off such debts, lets be honest here, its unlikely the creditors will ever see there money back, would it not make more sense for the family to write on her behalf and ask her creditors to consider taking a commercial decision and writing off her outstanding balances?

I`m certain such an approach would allow mum to live out the rest of her days without the constant worry of debt repayments hanging over her.

StepChange_Aidan

sourcrates said:

@StepChange_Aidan,

I must apologise for jumping on your debt advisors thread, but do you really think it is appropriate for a 90 year old lady to have to struggle with consumer credit debt repayments at her time of life ?

Her age and circumstances alone should be reason enough for her creditors to write off such debts, lets be honest here, its unlikely the creditors will ever see there money back, would it not make more sense for the family to write on her behalf and ask her creditors to consider taking a commercial decision and writing off her outstanding balances?

I`m certain such an approach would allow mum to live out the rest of her days without the constant worry of debt repayments hanging over her.

Thanks for your message. To clarify, the above is general advice that I’d suggest to anyone who’s currently in a fee-charging DMP and is considering moving over to StepChange.

Before someone can set up a DMP with us, they need to go through a full debt advice session to so we can understand their situation and make sure that it’s the best option for them.

Under the circumstances, it could well be worth contacting creditors to ask if they will consider writing off the outstanding debt if she’s unable to repay it.

Regards,

Aidan

fatbelly

How long is the dmp? 

A 12-month plan for a 90-year old might be reasonable; a 20-year plan isn't.

In a lot of cases it's worth trying write-offs as a first step; then considering options once the results are in. 

StepChange_Patience

fatbelly said:

How long is the dmp? 

A 12-month plan for a 90-year old might be reasonable; a 20-year plan isn't.

In a lot of cases it's worth trying write-offs as a first step; then considering options once the results are in. 

Hi there

I understand, as you can imagine we can only go from limited information on the forum, it sounds like their daughter wants to support their mother in applying for another DMP so we can give suggestions based on this. 

It may be beneficial given their mothers age that we look at other solutions or consider asking their creditors to write off the debts but this isn't what they were asking for information on at this point. 

Either way, we are unable to give tailored advice on the forum, and we wouldn't give advice over the phone without completing a budget, it wouldn't be fair for us to do this. 

I hope this helps. 

Patience

flipflopflo

It will take a little while for them to come for the car when you stop paying for it so put that money aside and when they come and get the car you have some money set aside for a run around. 

CharlieD2k

Hi I have set up a DMP yesterday with StepChange. I am not going to be able to afford my non-priority debts this month due to a massive reduction in income which won't be resolved until end of June. I was advised to cancel direct debits to non-priority debts due out at the beginning of June. Does this sound right? Do I need to contact the creditors before I do this or after? If I pay all these I will have to borrow further just for food, fuel etc. Thanks

AliceDunn26

Hi all,

I took out a credit union loan and I have 6,000 left on it. I'm trying to pay back as much as I can and I will be receiving taxback soon. Part of me wants to save the taxback instead of paying the loan in one go because my savings are low at the moment. I get paid 450 a week and I pay my parents rent and the rest on the loan. Do you have any tips on how I can be more frugal/pay off my loan quicker/save better?

[Deleted User]

Hello everyone,

I am seeking assistance for my brother's financial situation, and I would greatly appreciate your input. He is 47 years old, has two children, lives in rented accommodation, and is burdened with nearly £50k in debt. Currently, he works part-time and earns around £1,200 per month, in addition to receiving approximately £1,100 from Universal Credit. I am trying my best to help him escape this predicament, but I am unsure of how to handle unmanageable debt.

Most of his debts have already been defaulted on, except for regular payments towards his car loan. He is considering an Individual Voluntary Arrangement (IVA) through a company called Bailiff Rescue. Let me break down the various types of debts and their significance. Please let me know if you require more details.

The largest debt he has is for his car, which amounts to £19k. Additionally, he has arrears of £3k, which he is paying separately. The car's value is approximately £12k, and the interest rate on the loan is an exorbitant 30% or higher. He is currently under a hire purchase agreement. My primary concern regarding this particular debt is whether there is a way to terminate the agreement, such as returning the car. According to a quick Google search, this is typically possible when half of the loan amount has been repaid. Is there any way to resolve this loan earlier? What would be the most effective approach? He does require a car, although it doesn't have to be the fancy one he currently owns. Presently, he pays over £1,100 monthly for loan payments, insurance, and fuel, whereas the expenses for a standard car should be significantly lower. The initial loan amount was £21k.

He also has loans totaling £21k from four other lenders, and many of these are in default. Interestingly, he mentioned that some of these debts appear on his credit report but have not pursued him for payment. One of the debts dates back over 20 years. Any advice concerning this specific situation would be appreciated.

Lastly, he has several smaller debts amounting to over £2k. These primarily consist of unpaid or defaulted mobile phone bills and a council parking ticket.

I have suggested a plan to address his monthly expenses, such as switching to a SIM-only contract, canceling his premium TV package, and exploring ways to reduce his £650 monthly grocery bill. However, I am uncertain about the best course of action regarding the debt. I have a limited understanding of an IVA, which seems like a form of debt consolidation where someone else is repaid with interest. Additionally, there is bankruptcy, which I am not entirely familiar with either. How does bankruptcy work, and what impact would it have on his employment (he works in a school), housing, and phone contracts? Any assistance or advice regarding the specific situations or overall situation would be immensely helpful.

Thank you all for your support.

sourcrates

CharlieD2k said:

Hi I have set up a DMP yesterday with StepChange. I am not going to be able to afford my non-priority debts this month due to a massive reduction in income which won't be resolved until end of June. I was advised to cancel direct debits to non-priority debts due out at the beginning of June. Does this sound right? Do I need to contact the creditors before I do this or after? If I pay all these I will have to borrow further just for food, fuel etc. Thanks

AliceDunn26 said:

Hi all,

I took out a credit union loan and I have 6,000 left on it. I'm trying to pay back as much as I can and I will be receiving taxback soon. Part of me wants to save the taxback instead of paying the loan in one go because my savings are low at the moment. I get paid 450 a week and I pay my parents rent and the rest on the loan. Do you have any tips on how I can be more frugal/pay off my loan quicker/save better?

Deleted_User said:

Hello everyone,

I am seeking assistance for my brother's financial situation, and I would greatly appreciate your input. He is 47 years old, has two children, lives in rented accommodation, and is burdened with nearly £50k in debt. Currently, he works part-time and earns around £1,200 per month, in addition to receiving approximately £1,100 from Universal Credit. I am trying my best to help him escape this predicament, but I am unsure of how to handle unmanageable debt.

Most of his debts have already been defaulted on, except for regular payments towards his car loan. He is considering an Individual Voluntary Arrangement (IVA) through a company called Bailiff Rescue. Let me break down the various types of debts and their significance. Please let me know if you require more details.

The largest debt he has is for his car, which amounts to £19k. Additionally, he has arrears of £3k, which he is paying separately. The car's value is approximately £12k, and the interest rate on the loan is an exorbitant 30% or higher. He is currently under a hire purchase agreement. My primary concern regarding this particular debt is whether there is a way to terminate the agreement, such as returning the car. According to a quick Google search, this is typically possible when half of the loan amount has been repaid. Is there any way to resolve this loan earlier? What would be the most effective approach? He does require a car, although it doesn't have to be the fancy one he currently owns. Presently, he pays over £1,100 monthly for loan payments, insurance, and fuel, whereas the expenses for a standard car should be significantly lower. The initial loan amount was £21k.

He also has loans totaling £21k from four other lenders, and many of these are in default. Interestingly, he mentioned that some of these debts appear on his credit report but have not pursued him for payment. One of the debts dates back over 20 years. Any advice concerning this specific situation would be appreciated.

Lastly, he has several smaller debts amounting to over £2k. These primarily consist of unpaid or defaulted mobile phone bills and a council parking ticket.

I have suggested a plan to address his monthly expenses, such as switching to a SIM-only contract, canceling his premium TV package, and exploring ways to reduce his £650 monthly grocery bill. However, I am uncertain about the best course of action regarding the debt. I have a limited understanding of an IVA, which seems like a form of debt consolidation where someone else is repaid with interest. Additionally, there is bankruptcy, which I am not entirely familiar with either. How does bankruptcy work, and what impact would it have on his employment (he works in a school), housing, and phone contracts? Any assistance or advice regarding the specific situations or overall situation would be immensely helpful.

Thank you all for your support.

Hi,
You all need to re-post on the debt free wannabe forum if you want your questions answered.

This is the stepchange debt advisors thread, and they appear to be busy, as they have not answered a post for over a month.

If you want answers, then please re-post, its easy, just copy your post, go to the DFW forum, click new post, and paste your old thread to it.

thanks.