Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Patience

ftb_40 said:

HI I'm currently in around 41k of debt, spread over credit cards, personal loans, and store credit.
I have no assets to protect.
I've been working 7 days a week for years to pay the minimum payments and then I'm using what's left on my cards to get by meaning that at the end of each month, I'm back to square one.
working so much is having a detrimental effect on my physical and mental health and I can't go on like this any longer.
what do you think would be my best course of action?
I have registered with step change and they have suggested an iva but I keep seeing people say that an iva is a bad idea if I don't have assets to protect.
I'm so confused and I want my life back. help!

Hi there

Thank you for getting in touch, I'm sorry to hear that you've been left confused by your advice and the impact of the debt is having such a detrimental affect on your health. 

An Individual Voluntary Arrangement (IVA) is a form of Insolvency where you make regular payments for 5 or 6 years depending on your circumstances. Once the 5 or 6 years are over, any remaining debt is then written off.

An IVA has it's positives and things to consider, but I wouldn't say that it's a 'bad idea' if you don't have assets to protect. It can be worth reconsidering if it's right for you, if any of the disadvantages of the solution would impact you or your circumstances, for example some jobs can be affected and it can show on your credit file for 6 years which can limit your access to further credit.

Other than that, it's just one of many debt solutions to help people become debt free.

If you would like to review your options or discuss the IVA in more detail, please give StepChange a call and we can go though this with you. 

You can find our contact details here. 

I hope this helps. 

Patience

saving_88

Hi, Been on a DMP for a year now. All creditors have defaulted except for one. They said back in April they will default me. They never did. Now they have started adding interest on my account with them. So the amount i actually paid off to them in a plan has gone back to what it was. How can i get them to default it. Remove them from my plan and hope they default it and freeze interest. Or just carry on paying via my DMP and just wait really. I cant afford to pay the full balance, so for me the default is going to work out best. Then in 6 years i can see what to do when hopefully financials improve. 

gerrard88

Should I wait to all my cards have been defaulted to go on a DMP or go on now as most cards have sent me final warning letters etc

sourcrates

@gerrard88

You have posted in the stepchange debt advisors thread, they won`t be online till Monday earliest.

If you want general advice why not open a new thread in the general DFW forum instead?

StepChange_Aidan

saving_88 said:

Hi, Been on a DMP for a year now. All creditors have defaulted except for one. They said back in April they will default me. They never did. Now they have started adding interest on my account with them. So the amount i actually paid off to them in a plan has gone back to what it was. How can i get them to default it. Remove them from my plan and hope they default it and freeze interest. Or just carry on paying via my DMP and just wait really. I cant afford to pay the full balance, so for me the default is going to work out best. Then in 6 years i can see what to do when hopefully financials improve. 

Hi,

Thanks for your post.

Debts will usually default after 3-6 months or missed or reduced payments but if you’re in a DMP, the creditor may have held off on registering a default because they’re happy with the offer.

The timeframe of 3-6 months is an industry guideline for most types of debt. As they previously advised that they were going to default the account but didn’t, and if you feel there’s been an unreasonable delay in registering the default, I’d suggest making a complaint to the creditor.

I hope this helps,

Aidan

StepChange_Aidan

gerrard88 said:

Should I wait to all my cards have been defaulted to go on a DMP or go on now as most cards have sent me final warning letters etc

Hi,

It’s up to you. We would suggest starting a DMP now if it’s the right option, you don’t necessarily need to wait until the debts have defaulted. However, some people would prefer to wait for the accounts to default to ensure that they will drop off the credit file after six years.

If you haven’t already, you can get in touch with us to review your options and make sure that a DMP is the right solution for your debts. You can get advice online using our self-help tool or give us a call to speak with an advisor.

Regards,

Aidan

gerrard88

Thanks Aidan

i have only had few banks say they are going to default. Just not sure if to wait for others to do same

Just worried what to do regarding credit score etc

can i still renew car finance on my dmp if go onto it. Also our joint mortgage review is in 2026. Would this be ok?

thanks again

StepChange_Aidan

gerrard88 said:

Thanks Aidan

i have only had few banks say they are going to default. Just not sure if to wait for others to do same

Just worried what to do regarding credit score etc

can i still renew car finance on my dmp if go onto it. Also our joint mortgage review is in 2026. Would this be ok?

thanks again

Hi,

Your credit file and score will be negatively affected by the DMP as you’ll be making reduced payments to the debts, however they can be improved again over time. The debts will be removed from your credit file six years after the default date, even if they’re not fully repaid.

You could still potentially renew car finance while on a DMP, but a record of missed payments or defaults could make this more difficult, or you might not be offered the best deals. Likewise, a mortgage review could also be affected if it involves a credit check (this is usually not required if you’re staying with the same lender).

There’s some more information on DMPs and how they can affect you here.

Regards,

Aidan

Jaytee

Hi
I hope some can help me sort out the terrible mess I am in.
I have about 40k of credit card debt. No overdraft. No loans. I have a house and am thankfully mortgage free. I am joint owner with my husband. He doesn't know about my debt. I can't tell him at the moment as he has depression. He works, has a good wage which covers all the bills.
I used to be employed but in 2017 I was a whistle blower and had to leave. I became self employed (registered with HMRC etc) and that was fine until covid. During that time I used my savings to cover bills as income dropped. 
My self employment income has fallen from around 3k a month to between £1k and £500. Brexit and COL I think.
My repayments have been sporadic and recently I have really struggled. One of my debts has now been passed to Opos. They have contacted me three times in less than 12 hours.
At the start of 2024 I realised that I needed to get back to a salaried job but I became ill and have something called Graves disease which means I am exhausted all the time. I am under the care of a consultant.
I have considered suicide. I am linked financially to my husband through the title deeds of the property and we have a joint account for bills. I can be taken off this. I am 52. What a failure.

StepChange_Aidan

Jaytee said:

Hi
I hope some can help me sort out the terrible mess I am in.
I have about 40k of credit card debt. No overdraft. No loans. I have a house and am thankfully mortgage free. I am joint owner with my husband. He doesn't know about my debt. I can't tell him at the moment as he has depression. He works, has a good wage which covers all the bills.
I used to be employed but in 2017 I was a whistle blower and had to leave. I became self employed (registered with HMRC etc) and that was fine until covid. During that time I used my savings to cover bills as income dropped. 
My self employment income has fallen from around 3k a month to between £1k and £500. Brexit and COL I think.
My repayments have been sporadic and recently I have really struggled. One of my debts has now been passed to Opos. They have contacted me three times in less than 12 hours.
At the start of 2024 I realised that I needed to get back to a salaried job but I became ill and have something called Graves disease which means I am exhausted all the time. I am under the care of a consultant.
I have considered suicide. I am linked financially to my husband through the title deeds of the property and we have a joint account for bills. I can be taken off this. I am 52. What a failure.

Hi,

I’m sorry to hear what you’ve been going through. It seems to me that the financial problems are mainly due to circumstances beyond your control. You’re not a failure.

I first want to address the suicidal thoughts that you mentioned. If you haven’t already, I’d recommend speaking to your doctor about how you’re feeling, or you could call the Samaritans for help and support. Please bear in mind that there will always be a way forward to deal with these debts.

Collection agencies like Opos are just companies that have bought the debt or are collecting it on behalf of the creditor, but they have no additional legal powers. They have the right to contact you, but you could raise a complaint if they’re calling multiple times a day or if you feel that they’re harassing you.

Normally, I would suggest speaking to your partner about the situation so you can address the debts together, but I understand your reasons for not wanting to. If you own your home jointly this would rule out insolvency solutions, but you could look at setting up an informal option such as a Debt Management Plan to repay the debts at an affordable rate.

I would recommend getting full debt advice to review all available options before you decide. If you’re still self-employed, please contact Business Debtline, who will be able to offer specialist help.

Whatever you decide to do, please be aware that credit cards are a non-priority debt, please don’t feel pressured into paying anything you can’t afford.

I hope this helps,

Aidan