Struggling with debt? Ask a stepchange debt adviser a question

gerrard88

So 1 of my 4 cards now been passed to agency

Pastdue credit solutions from Sainsburys

what do I do if I want to do DMP
With step change?

contact this company or wait until my other cards are defaulted?

any advice greatly appreciated. Thanks

StepChange_Aidan

gerrard88 said:

So 1 of my 4 cards now been passed to agency

Pastdue credit solutions from Sainsburys

what do I do if I want to do DMP
With step change?

contact this company or wait until my other cards are defaulted?

any advice greatly appreciated. Thanks

Hi,

Passing debts to collections agencies is a standard part of the process for unsecured debts. The general advice is still the same, to keep the debt on hold or only pay what you can for now.

You don’t necessarily need to contact them at this stage, but if you do you could let them know that you’re getting debt advice and will be in touch with more information soon.

There’s some more information on Debt Collection Agencies here.

Regards,

Aidan

sonnet72

Hi, 
I’ve posted on this forum before regarding my debts  and my situation, but I’ll summarise here: 
i fell into serious debt after I became addicted to trading and made huge losses. I already had a loan from NatWest for 13.5k of  and then took out a further loan from Tesco bank of 25k  and 10k from Hastings. With interest the total exceeded 50k

Not a single one of these creditors carried out sufficient checks on my income which I fabricated to secure the loan at a time when I was in fact unemployed. 

So after I lost everything I informed them all that I can’t afford to continue making payments. I sent in supporting evidence from my GP that said that I’m under lots of extraordinary stress due to having 2 autistic children and some mental health issues of my own. 

Soon after that I suffered a stroke and an currently awaiting an operation for a hole in my heart. My GP wrote another letter stating the importance of being stress free to aid my recovery. 

Hastings has since written off my debt. 

Tesco are being nice but I’m waiting their decision. 

NatWest, despite having a “specialised” team for people with mental health issues and other sensitive issues, have been a nightmare. 

Although they have proposed a payment plan that totals less than £20 a month which I can afford. 

My question is : now that Hastings have written off my debt the remainder is less than £50k so should I pursue the DRO route? 

The only big problem with that is I have 3 bank accounts with money in them that isn’t mine. 2 of them are to handle each of my autistic sons benefits and is to finance them and not me.  A third is an account my husband uses for his eBay transactions- was meant to be for both of us but I haven’t sold much but he has a healthy couple of grand in there. 

Will the DRO people accept this? 

Should I just continue to communicate individually with the remaining 2 creditors? 

StepChange_Aidan

sonnet72 said:

Hi, 
I’ve posted on this forum before regarding my debts  and my situation, but I’ll summarise here: 
i fell into serious debt after I became addicted to trading and made huge losses. I already had a loan from NatWest for 13.5k of  and then took out a further loan from Tesco bank of 25k  and 10k from Hastings. With interest the total exceeded 50k

Not a single one of these creditors carried out sufficient checks on my income which I fabricated to secure the loan at a time when I was in fact unemployed. 

So after I lost everything I informed them all that I can’t afford to continue making payments. I sent in supporting evidence from my GP that said that I’m under lots of extraordinary stress due to having 2 autistic children and some mental health issues of my own. 

Soon after that I suffered a stroke and an currently awaiting an operation for a hole in my heart. My GP wrote another letter stating the importance of being stress free to aid my recovery. 

Hastings has since written off my debt. 

Tesco are being nice but I’m waiting their decision. 

NatWest, despite having a “specialised” team for people with mental health issues and other sensitive issues, have been a nightmare. 

Although they have proposed a payment plan that totals less than £20 a month which I can afford. 

My question is : now that Hastings have written off my debt the remainder is less than £50k so should I pursue the DRO route? 

The only big problem with that is I have 3 bank accounts with money in them that isn’t mine. 2 of them are to handle each of my autistic sons benefits and is to finance them and not me.  A third is an account my husband uses for his eBay transactions- was meant to be for both of us but I haven’t sold much but he has a healthy couple of grand in there. 

Will the DRO people accept this? 

Should I just continue to communicate individually with the remaining 2 creditors? 

Hi,

Thanks for your message.

To be eligible for a DRO, your assets (not including vehicles) have to be worth no more than £2,000. This would include any savings held in your bank accounts.

The joint account may be an issue in a DRO application, as the savings would be deemed to be a shared asset.  You might be required to provide some more information or evidence to confirm that the funds in there belong to your husband.

Any disability related income for your children will be disregarded in a DRO application.

As others have advised in your thread, you don’t necessarily have to go ahead with a debt solution right now. It may be best to wait and find out the outcome of the other write off requests.

If you haven’t already, I’d recommend contacting a debt advice agency to ensure that you qualify for a DRO and to weigh up any other options that might be available to you. If you’d like to do this through StepChange you can use our online tool or give us a call to speak with an advisor.

I hope this helps,

Aidan

ME212

Hi - thanks for being available to answer questions on this forum.

I have almost £100k of debt between loans and credit cards that I am no longer able to repay or manage the minimum payments.

I lost my job due to discrimination over a year ago and my spouse covers the essential items including rent - I had been using savings to cover minimum payments until now, but I have none left and do not foresee that I will get a job (no income at the moment) which will cover the repayments which total close to £3k per month at the moment.

None of the debt is joint, it is all in my name, we only have one joint bank account between us.

I have gone through step change who advised to request a repayment holiday, bankruptcy would prevent me from getting a job in my profession.

My questions are:

- Am I just delaying the inevitable of defaults by asking for a payment holiday? Surely that will be an extra year of poor credit to try and rebuild. 

- Should I ask for a repayment holiday and then when I find a job try to negotiate a DMP?

- Do I need to close the joint account to prevent my spouses credit rating being affected by all of this?

- How does having a payment holiday/default affect renting a house? Can landlords see that information? 

Any advice would be greatly appreciated.

stu12345_2

sorry for replying before the step change rep,
normally it'd best to pay nothing to speed up defaults, that means not communicating with creditors, no negotiations, nothing


defaults occur 3 to 6 months after not paying min monthly credit  card  amounts or loan contractual amounts, interest must legally stop then at default.

then after that negotiate a payment plan even it's it's tiny,  only to the ones that have defaulted, then maybe increase it when you get a good job.
 that means no step change, cos they won't wait till they have all defaulted, you will have to do the repayment via a plan run by yourself 

are any of the creditors part of the same companies or related ownership  of companies in the joint account 

this is to prevent the creditor doing a right to set off, eg a bank account grab to get their money back, 
open up separate accounts instead and in a bank where you have no debts and the bank doesn't own credit card companies where you have debts, you can Google to see

your partner can open up an account in any bank, cos they have no debts with any bank and once you go individual accounts, she is no longer linked to you

and yes , your credit file will be damaged and as you share a joint account your partner will suffer also when she/ he  goes to apply for credit as you two are jointly financially linked cos of the joint bank account 

landlords only class insolvency as a no no to rentals when they do credit checks, defaults are not severe

can you repay your debts in say over 5 years when you get a good job

are you expecting a big discrimination payout 

ME212

stu12345_2 said:

sorry for replying before the step change rep,
normally it'd best to pay nothing to speed up defaults, that means not communicating with creditors, no negotiations, nothing


defaults occur 3 to 6 months after not paying min monthly credit  card  amounts or loan contractual amounts, interest must legally stop then at default.

then after that negotiate a payment plan even it's it's tiny,  only to the ones that have defaulted, then maybe increase it when you get a good job.
 that means no step change, cos they won't wait till they have all defaulted, you will have to do the repayment via a plan run by yourself 

are any of the creditors part of the same companies or related ownership  of companies in the joint account 

this is to prevent the creditor doing a right to set off, eg a bank account grab to get their money back, 
open up separate accounts instead and in a bank where you have no debts and the bank doesn't own credit card companies where you have debts, you can Google to see

your partner can open up an account in any bank, cos they have no debts with any bank and once you go individual accounts, she is no longer linked to you

and yes , your credit file will be damaged and as you share a joint account your partner will suffer also when she/ he  goes to apply for credit as you two are jointly financially linked cos of the joint bank account 

landlords only class insolvency as a no no to rentals when they do credit checks, defaults are not severe

can you repay your debts in say over 5 years when you get a good job

are you expecting a big discrimination payout 

Thanks for the reply stu12345_2

My biggest concerns were around the impact on my spouse’s credit rating and renting - along with not going bankrupt.

I already settled on the discrimination and that’s mainly what helped me get through the last year (ironic considering the situation is partially caused by the discrimination…)

If I run a plan myself does that mean I would need to contact each of the creditors to negotiate? Are there guides to doing this elsewhere on the site/forums?

Most of the cards are with banks I have current accounts with, but I have an account that is free from them so I’ll use that for payments - thanks for the heads-up about set-off.

Is it likely that I can maintain one of the credit cards while defaulting on the rest? I have the feeling that once the missed payments start showing on my file then the others with £0 balance will start reducing the limit.

If I’m only working to pay the debts then it might be possible to repay everything in 5 years, but that’s a risky bet as my spouse is self-employed.

stu12345_2

you need a single bank acct where no wages go in so the banks can't collect any set off money.and this bank isn't owned by any of your creditors , Google what banks own what banks
 so wages in a non creditor bank
this new separate bank acct to stop being linked to your partner  in the joint account, (so end the joint account)cos her credit file will be damaged as soon as you start missing your payments.

cut up all credit cards, do not keep one, you will be saving up in the meantime by not paying anyone anyway at moment 

other creditors wont look at your other creditors on a credit file. they only interested in themselves.
 5 to 7 years is the max id say, above that's it's insolvency as the fastest route.

you can simply do your own dmp, when each debt defaults you simply set up a standing order to pay them , no direct debit, no continuous debit card repayment method, you add your debt reference number so they know where the payment is for.

you get their bank info on any letters on how to pay us or their website.

you do not give them any income and expenses sheet no matter how demanding they become, they want to be nosey, but kid on its because they are a responsible lender and want to make sure you can afford repayments.


you just email.them.to say expect such and such £ on such and such date per month by standing order going forward starting on such and such , goidbye
you never pay them the max you can afford, you keep some back to save up in a emergency fund so that one day you can hit them with a full discounted offer.

keep the amount the same , as treat it as you are paying your other ones that have defaulted,( you can save up cos your not payi g any of the non defaulted ones yet) otherwise it will cause you to keep loweri g amounts as you start to repay others too.

rachelmc_4

Mum and dad have debts of est £2k x 2 to Lowell and Cabot for multiple CC, capital one of £600 (he has arranged to pay around £25 a month to these and has been doing this for many years). With NatWest he also has a secured loan and overdraft totalling £13500 (confirmed Aug 2024 by NatWest). He pays £50 a month to this. He also has a mortgage to pay which he has around 2 years left of and he continues to pay this. I’ve recently become aware of all of this due to dad’s multiple mini strokes and Parkinson’s disease diagnosis meaning he has had no option to stop working. So we have contacted NatWest to get a final figure so I can try and pay this off. They have responded by sending the debt to Moorcroft who have added £11000 onto the debt taking it from £13500 to £24500 (NatWest have not sent him any paperwork for many years - he thinks this went to court ?CCJ but he cannot remember - this would have been around 2010 ish). I wanted to pay it off due to his health conditions so that he can then try and pay the smaller ones himself. Is this allowed? I was trying to help! 

StepChange_Aidan

Hi,

I’m sorry to hear what you’ve been dealing with.

Stu has already covered your questions, but I just want to clarify a few points:

ME212 said:

I have gone through step change who advised to request a repayment holiday, bankruptcy would prevent me from getting a job in my profession.

My questions are:

- Am I just delaying the inevitable of defaults by asking for a payment holiday? Surely that will be an extra year of poor credit to try and rebuild. 

I think you’re referring to what we call ‘payment suspension’ – when you stop making payments to your debts and keep them on hold, typically for 6 – 12 months. We recommend this if your budget shows little or no money available to repay them. This isn’t a long-term solution but more of a holding position until your situation improves.

ME212 said:

- Should I ask for a repayment holiday and then when I find a job try to negotiate a DMP?

When your situation changes and you’re able to pay more to the debts, you could get back in touch with us for a review. If you can afford to pay a reasonable amount each month, we could set up a DMP (or you could set up one yourself directly with the creditors). We can also look at any other debt solutions available to you.

ME212 said:

- Do I need to close the joint account to prevent my spouses credit rating being affected by all of this?

Although your partner’s credit file wouldn’t be directly affected, if you have a joint account together your credit files will be linked, meaning that your credit history could affect their ability to apply for credit and vice versa. The avoid this you would need to close the joint account and then ask the credit reference agencies to have your files 'disassociated'

ME212 said:

- How does having a payment holiday/default affect renting a house? Can landlords see that information? 

Some private landlords may do a credit check when you apply for a new tenancy, which means that they would be able to see missed payments and defaults. This doesn’t necessarily mean that they will refuse your application.

I hope this helps,

Aidan