Struggling with debt? Ask a stepchange debt adviser a question

delays3489

Hello! I currently have around £18k worth of debt on credit cards. I am currently on payment plans due to health/disability reasons with five out of eight creditors (out of the remaining three, the interest rate and/or current 0% balance transfer offer means a PP doesn't feel 'necessary' at this time). I am in the process of 'renewing' payment plans with some of those creditors having been on some for 12 months. I have paid off around £2k overall already, though do find myself using 'credit' of BNPL options fairly often.

I am considering my options and what to do next. At least one creditor has stated they will not do an extension past 12 months for a health/disability related PP and can move to transfer the debt to a debt company. Is it worth continuing on payment plans with the creditors who will permit any further extensions? Would it be best to move to a DMP? Appreciate any and all advice on this.

Best wishes!

rocktron_amp

Hello

I have nearly £60K debt on credit cards. I used to be an IT contractor Outside IR35 until 2020. I thought I could keep earning high pay over time, but the government changed the rules in 2020/2021, it has been hard to scrap at the debt mountain. I managed at one point to get it down £35K in 2021, but I am now permanent employed since then. I jumped from £75K salary to £85k to £90k. In truth, I wish the old contracting days and the economies of the world would have sustain. I should never have got in debt in the first. I'd kept working and saving. But I then I had to expense things like a kitchen deposit, car service, and other business rentals, and even chuck annual water bills and car and pet insurances on to a credit card. This is a ramble.

I'd have love to have the old 40 months 0% Sainsbury balance transfer card back again as a contractor, but now my credit rating has fallen down to 606/999. In 2016, I had no or very little managed credit card debt. I was earning, then my contract ended, I kept on spending, contracting was sporadic 2017 to 2019. Feast and famine. I started to climb out of the debt. Then blasted COVID 19 and Government Off Payroll Worker Rules 2021, ended UK contracting.... Idiots. I am getting very angry now pause....

Lets looks at the MSE balance transfer checker or similar. Whenever I tried the eligibility checker, I don't see any options, or the chances of getting a long term 12-28 month BT 0% are zilch, they list them, but they greyed or greened out. 

I have been in touch Step Change, I just don't like the recommended options:

* Debt managed payment plan

* Equity release on our house

The above make me feel like I am in naught step.

I am in my fifties. I am not see much left in my salary every month. I am worry about the job prospects in the UK. I have been through restructuring / redundancies before, I have seen senior managers lose their jobs. (I am more an engineering leader than a manager). The easiest route I think for me is to  find a six figure job that pays very well, if I found that new job,I'd chuck most of the onthly salary at the debt. I actually have dangled my CV out to the job market (LinkedIn and JobServer), but there very little takers. I have had interest, but poor salaries offered,  or some won't reveal the initial saalary. It tells me the market is weak.

I am sorry. I don't really have a true question.\

I am just angry and bitter, mostly at myself. I better stop it now. 

PS: It did the MSE SOA thing, the snowball says debt free in 30 October 2030 if I tighten my belt.

StepChange_Aidan

delays3489 said:

Hello! I currently have around £18k worth of debt on credit cards. I am currently on payment plans due to health/disability reasons with five out of eight creditors (out of the remaining three, the interest rate and/or current 0% balance transfer offer means a PP doesn't feel 'necessary' at this time). I am in the process of 'renewing' payment plans with some of those creditors having been on some for 12 months. I have paid off around £2k overall already, though do find myself using 'credit' of BNPL options fairly often.

I am considering my options and what to do next. At least one creditor has stated they will not do an extension past 12 months for a health/disability related PP and can move to transfer the debt to a debt company. Is it worth continuing on payment plans with the creditors who will permit any further extensions? Would it be best to move to a DMP? Appreciate any and all advice on this.

Best wishes!

Hi,

Welcome to the forum.

It would depend on whether your health/disability issue is a temporary or long-term situation. If you’re not expecting any changes soon, creditors might not be willing to extend the agreements.

Transferring the debts onto a collections agency is a standard step in the collection process, but you’d still only pay what you can afford. It’s important to prioritise your essential bills and living costs over debt repayments.

If you need help in managing the debts going forward, it may be best to look into a DMP, or there could be other debt solutions that are more appropriate to your situation. We would first need to create a budget to understand your options. If you’d like to create one with StepChange you could use our online tool or give us a call to speak with an advisor.

I hope this helps,

Aidan

StepChange_Aidan

rocktron_amp said:

Hello

I have nearly £60K debt on credit cards. I used to be an IT contractor Outside IR35 until 2020. I thought I could keep earning high pay over time, but the government changed the rules in 2020/2021, it has been hard to scrap at the debt mountain. I managed at one point to get it down £35K in 2021, but I am now permanent employed since then. I jumped from £75K salary to £85k to £90k. In truth, I wish the old contracting days and the economies of the world would have sustain. I should never have got in debt in the first. I'd kept working and saving. But I then I had to expense things like a kitchen deposit, car service, and other business rentals, and even chuck annual water bills and car and pet insurances on to a credit card. This is a ramble.

I'd have love to have the old 40 months 0% Sainsbury balance transfer card back again as a contractor, but now my credit rating has fallen down to 606/999. In 2016, I had no or very little managed credit card debt. I was earning, then my contract ended, I kept on spending, contracting was sporadic 2017 to 2019. Feast and famine. I started to climb out of the debt. Then blasted COVID 19 and Government Off Payroll Worker Rules 2021, ended UK contracting.... Idiots. I am getting very angry now pause....

Lets looks at the MSE balance transfer checker or similar. Whenever I tried the eligibility checker, I don't see any options, or the chances of getting a long term 12-28 month BT 0% are zilch, they list them, but they greyed or greened out. 

I have been in touch Step Change, I just don't like the recommended options:

* Debt managed payment plan

* Equity release on our house

The above make me feel like I am in naught step.

I am in my fifties. I am not see much left in my salary every month. I am worry about the job prospects in the UK. I have been through restructuring / redundancies before, I have seen senior managers lose their jobs. (I am more an engineering leader than a manager). The easiest route I think for me is to  find a six figure job that pays very well, if I found that new job,I'd chuck most of the onthly salary at the debt. I actually have dangled my CV out to the job market (LinkedIn and JobServer), but there very little takers. I have had interest, but poor salaries offered,  or some won't reveal the initial saalary. It tells me the market is weak.

I am sorry. I don't really have a true question.\

I am just angry and bitter, mostly at myself. I better stop it now. 

PS: It did the MSE SOA thing, the snowball says debt free in 30 October 2030 if I tighten my belt.

Hi,

Thanks for your post.

If balance transfer offers are no longer available, and your budget showed that you may struggle to afford the minimum payments to your debts going forward, we would typically recommend a Debt Management Plan to repay them at a reduced rate.

Alternatively, if you’re able to increase your income or reduce spending to free up more money, you could pay the creditors directly and if possible, aim to offer more to clear the higher interest debts faster.

If you’re not sure about the recommended solutions from StepChange, please get back in touch with us so we can have another look at your budget and discuss your options in more detail.

Regards,

Aidan

rocktron_amp

StepChange_Aidan said:

rocktron_amp said:

Hello

I have nearly £60K debt on credit cards. I used to be an IT contractor Outside IR35 until 2020. I thought I could keep earning high pay over time, but the government changed the rules in 2020/2021, it has been hard to scrap at the debt mountain. I managed at one point to get it down £35K in 2021, but I am now permanent employed since then. I jumped from £75K salary to £85k to £90k. In truth, I wish the old contracting days and the economies of the world would have sustain. I should never have got in debt in the first. I'd kept working and saving. But I then I had to expense things like a kitchen deposit, car service, and other business rentals, and even chuck annual water bills and car and pet insurances on to a credit card. This is a ramble.

I'd have love to have the old 40 months 0% Sainsbury balance transfer card back again as a contractor, but now my credit rating has fallen down to 606/999. In 2016, I had no or very little managed credit card debt. I was earning, then my contract ended, I kept on spending, contracting was sporadic 2017 to 2019. Feast and famine. I started to climb out of the debt. Then blasted COVID 19 and Government Off Payroll Worker Rules 2021, ended UK contracting.... Idiots. I am getting very angry now pause....

Lets looks at the MSE balance transfer checker or similar. Whenever I tried the eligibility checker, I don't see any options, or the chances of getting a long term 12-28 month BT 0% are zilch, they list them, but they greyed or greened out. 

I have been in touch Step Change, I just don't like the recommended options:

* Debt managed payment plan

* Equity release on our house

The above make me feel like I am in naught step.

I am in my fifties. I am not see much left in my salary every month. I am worry about the job prospects in the UK. I have been through restructuring / redundancies before, I have seen senior managers lose their jobs. (I am more an engineering leader than a manager). The easiest route I think for me is to  find a six figure job that pays very well, if I found that new job,I'd chuck most of the onthly salary at the debt. I actually have dangled my CV out to the job market (LinkedIn and JobServer), but there very little takers. I have had interest, but poor salaries offered,  or some won't reveal the initial saalary. It tells me the market is weak.

I am sorry. I don't really have a true question.\

I am just angry and bitter, mostly at myself. I better stop it now. 

PS: It did the MSE SOA thing, the snowball says debt free in 30 October 2030 if I tighten my belt.

Hi,

Thanks for your post.

If balance transfer offers are no longer available, and your budget showed that you may struggle to afford the minimum payments to your debts going forward, we would typically recommend a Debt Management Plan to repay them at a reduced rate.

Alternatively, if you’re able to increase your income or reduce spending to free up more money, you could pay the creditors directly and if possible, aim to offer more to clear the higher interest debts faster.

If you’re not sure about the recommended solutions from StepChange, please get back in touch with us so we can have another look at your budget and discuss your options in more detail.

Regards,

Aidan

Hi Aidan

What does Debt Manage Plan do to your Credit Rating / Credit Score?

Also if can you pay early / overpayments to your DMP if ever your side-business  takes off, get a higher salary joib?

I am not entirely sure about the Equity Release idea. However, I have to read the PDF and share it was my other half so that we both understand that path.

StepChange_Aidan

rocktron_amp said:

StepChange_Aidan said:

rocktron_amp said:

Hello

I have nearly £60K debt on credit cards. I used to be an IT contractor Outside IR35 until 2020. I thought I could keep earning high pay over time, but the government changed the rules in 2020/2021, it has been hard to scrap at the debt mountain. I managed at one point to get it down £35K in 2021, but I am now permanent employed since then. I jumped from £75K salary to £85k to £90k. In truth, I wish the old contracting days and the economies of the world would have sustain. I should never have got in debt in the first. I'd kept working and saving. But I then I had to expense things like a kitchen deposit, car service, and other business rentals, and even chuck annual water bills and car and pet insurances on to a credit card. This is a ramble.

I'd have love to have the old 40 months 0% Sainsbury balance transfer card back again as a contractor, but now my credit rating has fallen down to 606/999. In 2016, I had no or very little managed credit card debt. I was earning, then my contract ended, I kept on spending, contracting was sporadic 2017 to 2019. Feast and famine. I started to climb out of the debt. Then blasted COVID 19 and Government Off Payroll Worker Rules 2021, ended UK contracting.... Idiots. I am getting very angry now pause....

Lets looks at the MSE balance transfer checker or similar. Whenever I tried the eligibility checker, I don't see any options, or the chances of getting a long term 12-28 month BT 0% are zilch, they list them, but they greyed or greened out. 

I have been in touch Step Change, I just don't like the recommended options:

* Debt managed payment plan

* Equity release on our house

The above make me feel like I am in naught step.

I am in my fifties. I am not see much left in my salary every month. I am worry about the job prospects in the UK. I have been through restructuring / redundancies before, I have seen senior managers lose their jobs. (I am more an engineering leader than a manager). The easiest route I think for me is to  find a six figure job that pays very well, if I found that new job,I'd chuck most of the onthly salary at the debt. I actually have dangled my CV out to the job market (LinkedIn and JobServer), but there very little takers. I have had interest, but poor salaries offered,  or some won't reveal the initial saalary. It tells me the market is weak.

I am sorry. I don't really have a true question.\

I am just angry and bitter, mostly at myself. I better stop it now. 

PS: It did the MSE SOA thing, the snowball says debt free in 30 October 2030 if I tighten my belt.

Hi,

Thanks for your post.

If balance transfer offers are no longer available, and your budget showed that you may struggle to afford the minimum payments to your debts going forward, we would typically recommend a Debt Management Plan to repay them at a reduced rate.

Alternatively, if you’re able to increase your income or reduce spending to free up more money, you could pay the creditors directly and if possible, aim to offer more to clear the higher interest debts faster.

If you’re not sure about the recommended solutions from StepChange, please get back in touch with us so we can have another look at your budget and discuss your options in more detail.

Regards,

Aidan

Hi Aidan

What does Debt Manage Plan do to your Credit Rating / Credit Score?

Also if can you pay early / overpayments to your DMP if ever your side-business  takes off, get a higher salary joib?

I am not entirely sure about the Equity Release idea. However, I have to read the PDF and share it was my other half so that we both understand that path.

Hi,

Because you’re likely to paying less than the minimum amount in a DMP, these will be recorded as partial payments on your credit file. The creditors may also add an ‘arrangement to pay’ marker and will usually default the accounts after a few months.

There’s some more information about how a DMP would your credit file and rating here.

A DMP is flexible, so you can update your budget and change your monthly payment when your situation changes. If you have an increase in income you could aim to pay more into the plan to clear your debts faster.

If you’re considering Equity Release, we have a specialist team at StepChange who can provide expert advice on your options. You can find their details here.

Regards,

Aidan

moanamoana

Hello, I’ll try to be as concise as I can but I’m in an absolute panic.

I have a personal loan of £2863 with Barclays and a Vanquis outstanding debt of £4850.

I have never missed a payment but I got a persistent debt letter asking me to up my payments to £346/month, which at present I just can’t.

Unfortunately 2023 and 2024 were Very Bad Years due to a number of reasons and that’s why my CC debt piled up, but coming June my circumstances will change for the better.

I tried applying to a 0% Barclaycard just now and got denied. I don’t know what else I can do to avoid the high interest rates from Vanquis, if anyone could give me some suggestions, please?

Apparently last year I paid as much in interest as in the debt itself (about 2k each).

StepChange_Aidan

moanamoana said:

Hello, I’ll try to be as concise as I can but I’m in an absolute panic.

I have a personal loan of £2863 with Barclays and a Vanquis outstanding debt of £4850.

I have never missed a payment but I got a persistent debt letter asking me to up my payments to £346/month, which at present I just can’t.

Unfortunately 2023 and 2024 were Very Bad Years due to a number of reasons and that’s why my CC debt piled up, but coming June my circumstances will change for the better.

I tried applying to a 0% Barclaycard just now and got denied. I don’t know what else I can do to avoid the high interest rates from Vanquis, if anyone could give me some suggestions, please?

Apparently last year I paid as much in interest as in the debt itself (about 2k each).

Hi,

Thanks for your message. I’m sorry to hear how you’re feeling.

If the minimum payments are only covering the interest and charges on your debts, rather than repaying the amount owed, your creditors may write to you to warn that you’re in ‘persistent debt’ and ask you to pay more.

I’d suggest first contacting the creditors to explain your current situation and discuss your options. They may be able to help set up a plan to repay the debt over a few years or increase your minimum payment when your situation has improved in June.

If you feel that you’re going to struggle to repay the debts in the long run, it may be better to look at debt solutions, such as a Debt Management Plan. If you’d like to review your options with StepChange you can use our online tool or give us a call to speak with an advisor.

There’s some more information on dealing with persistent debt here.

I hope this helps,

Aidan

DebtFreeWannabe88

Hi all,
So after 4 years of consistently paying my Stepchange DMP, I’m in a precarious situation. My partner who I have a joint mortgage with took ill suddenly in late 2023 with heart failure and hasn’t worked since. Natwest (mortgage provider) have been patient with us but now a bowel cancer diagnosis has crashed any hope of his return to work imminently.
our mortgage is quite expensive due to the term taken originally as my partner is older than me thus reducing the term. 

The only way out of this for us now is if I re-mortgage the house in my name to allow us a 30 year term instead of 13 years, to reduce the payment to an amount I can afford on my salary alone. With all we are facing the stress of selling and moving is not an option.
My mortgage advisor has said I really need to clear my DMP before applying (£27k debt) - my parents have kindly offered to clear the balance for me however I’m not sure what will look most favourable in my credit file. Do I pay it all off, or do I ask step change to approach my creditors for a full and final settlement? Will the partially settled mark on my file look worse than a settled in full mark?
I appreciate this is long and drawn out but I wanted to give context to the whole horrid situation.
TIA!

StepChange_Aidan

DebtFreeWannabe88 said:

Hi all,
So after 4 years of consistently paying my Stepchange DMP, I’m in a precarious situation. My partner who I have a joint mortgage with took ill suddenly in late 2023 with heart failure and hasn’t worked since. Natwest (mortgage provider) have been patient with us but now a bowel cancer diagnosis has crashed any hope of his return to work imminently.
our mortgage is quite expensive due to the term taken originally as my partner is older than me thus reducing the term. 

The only way out of this for us now is if I re-mortgage the house in my name to allow us a 30 year term instead of 13 years, to reduce the payment to an amount I can afford on my salary alone. With all we are facing the stress of selling and moving is not an option.
My mortgage advisor has said I really need to clear my DMP before applying (£27k debt) - my parents have kindly offered to clear the balance for me however I’m not sure what will look most favourable in my credit file. Do I pay it all off, or do I ask step change to approach my creditors for a full and final settlement? Will the partially settled mark on my file look worse than a settled in full mark?
I appreciate this is long and drawn out but I wanted to give context to the whole horrid situation.
TIA!

Hi,

Thanks for your post. I’m very sorry to hear what you and your partner have been going through, and I hope we can help.

Can I check, have you contacted StepChange to update your budget and discuss your options? Is it possible to reduce or stop your DMP payments so that you can prioritise your current mortgage payments and clear any arrears?

If you haven’t already, I’d recommend giving our Review team a call.

If the gift from your family is enough to repay the debts in full, we would suggest contacting the creditors directly to arrange a full and final settlement, but if not, we have a specialist team who can provide help with partial settlements.

Debts that have been repaid in full will look better to creditors than a partial settlement on your credit file.

Regards,

Aidan