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Struggling with debt? Ask a stepchange debt adviser a question

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  • StepChange_Aidan
    StepChange_Aidan Posts: 266 Organisation Representative
    Fifth Anniversary 100 Posts Name Dropper
    Hello, 

    I am just about to get into the final steps of setting up my DMP. How long can StepChange wait before I make a decision on starting the DMP? I am scared the creditors will not default my accounts. I would like to default them first and then start the DMP. Have you have any clients from the Channel islands?
    Hi,

    Thanks for your post.

    There’s no time limit for you to set up a plan with StepChange. You don’t have to decide at this stage, but when you’re ready, please get back in touch with us to continue.

    Please bear in mind that we can’t give advice to people living in the Channel Islands. You can set up a DMP with us if you’ve lived in the UK in the last three years, all debts were incurred in the UK and you’re paid into a UK bank account, but we won’t be able to advise on what actions your creditors could take or other debt solutions available where you live. I’d recommend getting in touch with a local advice agency to discuss your options before deciding.

    Regards,

    Aidan
  • 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
    rocktron_amp Posts: 28 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    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
    StepChange_Aidan Posts: 266 Organisation Representative
    Fifth Anniversary 100 Posts Name Dropper
    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
    StepChange_Aidan Posts: 266 Organisation Representative
    Fifth Anniversary 100 Posts Name Dropper
    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
    rocktron_amp Posts: 28 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    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
    StepChange_Aidan Posts: 266 Organisation Representative
    Fifth Anniversary 100 Posts Name Dropper
    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
    moanamoana Posts: 24 Forumite
    Eighth Anniversary 10 Posts Name Dropper Combo Breaker
    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).
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