Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Aidan

Richba50 said:

Hi, I have just applied for a DPP through step change and received the email saying to contact our creditors and stop payments immediately. All our creditors have paused everything for 30 days. My question is because we are not paying creditors we have around £800 surplus, can we use this money to, for example, pay off smaller creditors? Our loans and credit card debt is £50k but we owe Creation £500 on a buy now pay later deal so could settle this before its due? Also, we have a holiday booked for next July and the deposit of £400 is non-refundable (cancellation fee is £400) the balance is £800. Can we pay this up if on a DPP and still go on holiday? Thanks,

Hi,

Thanks for your post.

We would recommend offering each creditor their fair share of what you can afford, but you do have the option to clear some of the smaller debts before starting a Debt Payment Programme (DPP).

In a DPP application, you can choose how much you want to pay towards your debts, but creditors will be able to see the amount you have left in your budget and the amount you have chosen to pay, if this is less.

You can also set aside funds for in your budget to save for holidays, but there is a risk that creditors may not consider this as an essential expense and be less likely to accept your offer.

I would recommend getting in contact with our Debt Arrangement Scheme team in Scotland directly, as they can discuss your DPP and budget in more detail.

I hope this helps,

Aidan

Richba50

Thanks, just as a follow up, if I earned overtime (voluntary and non-contracted) could I use this for a social/holiday fund and to pay extra to the DPP? Thanks,

StepChange_Aidan

Richba50 said:

Thanks, just as a follow up, if I earned overtime (voluntary and non-contracted) could I use this for a social/holiday fund and to pay extra to the DPP? Thanks,

Hi,

If you earned overtime, you wouldn’t be obliged to pay the extra funds into the DPP, so it could be set aside for holiday costs.

Alternatively, if you received the overtime on a regular basis and wanted to increase your monthly payment to clear the debts sooner, you could contact your DAS (Debt Arrangement Scheme) Administrator for a review.

Regards,

Aidan

ShamefulSoul

Hi, 

Currently I owe approximately 50k due to a gambling addiction. My husband and family are not aware & I am feeling very low. I do not have it in me to tell them. I want to start a DMP & have put all my details into Stepchange with a view of a DMP for £280 a month over 14 years. While this seems a long time, I think for my mental health it is the best solution. I am not being a good enough mother to my children & quite frankly they deserve better than a gambling mother. My concern is all the contact I will receive from creditors, I do not want this. I am feeling very vulnerable. Is there anyway to ask for creditors to contact through stepchange only? 

StepChange_Aidan

ShamefulSoul said:

Hi, 

Currently I owe approximately 50k due to a gambling addiction. My husband and family are not aware & I am feeling very low. I do not have it in me to tell them. I want to start a DMP & have put all my details into Stepchange with a view of a DMP for £280 a month over 14 years. While this seems a long time, I think for my mental health it is the best solution. I am not being a good enough mother to my children & quite frankly they deserve better than a gambling mother. My concern is all the contact I will receive from creditors, I do not want this. I am feeling very vulnerable. Is there anyway to ask for creditors to contact through stepchange only? 

Hi,

Thanks for your post.

I’m sorry to hear how you’re feeling. Are you getting help with the gambling addiction? If you haven’t already, I’d recommend getting in touch with Gamcare for confidential and non-judgemental advice. There's also a guide to other sources of support here. If you feel you need any extra help, please give us a call so we can discuss your situation and options in more detail.

We do ask your creditors to reduce contact, but unfortunately, we can’t stop them from contacting you while you’re in a DMP. Some letters, like statements or default notices have to be sent to you by law.

If the creditors are calling, you could ask them to remove your phone number from their records and only communicate by post. 

There’s some more information about creditor contact while on a DMP here.

I hope this helps,

Aidan

Painterdad

Hi I hope you can help. 

I am a self employed decorator and work has always been up and down, so I’ve never been able to get ahead financially.

Last year I was doing well with a letting company and got a lot of work so went VAT registered and managed to clear a lot of debt.

Unfortunately the company went bust suddenly and I was out of work for quite a while - I had lost all my previous work contacts while working solely for them.

In my time unemployed I have amassed £28,600 in credit card debt to stay afloat, I owe £7,500 in tax, £5,300 in VT and have an £8,000 overdraft plus a £4,000 loan.

I am really only earning enough now to pay the very basics. I own my house with an £80,000 mortgage and it is worth around £550,000 but am not in a position to sell because the house is in some disrepair eg roof and I think it would take a long time to sell, plus my elderly mother in law and wife and three teenagers live here. 

I am thinking of going with the company Payplan to give them my debt and pay a small amount each month. I can’t see any other way.

Do you have any advice I feel a bit desperate.

Many thanks.
Mark

StepChange_Aidan

Painterdad said:

Hi I hope you can help. 

I am a self employed decorator and work has always been up and down, so I’ve never been able to get ahead financially.

Last year I was doing well with a letting company and got a lot of work so went VAT registered and managed to clear a lot of debt.

Unfortunately the company went bust suddenly and I was out of work for quite a while - I had lost all my previous work contacts while working solely for them.

In my time unemployed I have amassed £28,600 in credit card debt to stay afloat, I owe £7,500 in tax, £5,300 in VT and have an £8,000 overdraft plus a £4,000 loan.

I am really only earning enough now to pay the very basics. I own my house with an £80,000 mortgage and it is worth around £550,000 but am not in a position to sell because the house is in some disrepair eg roof and I think it would take a long time to sell, plus my elderly mother in law and wife and three teenagers live here. 

I am thinking of going with the company Payplan to give them my debt and pay a small amount each month. I can’t see any other way.

Do you have any advice I feel a bit desperate.

Many thanks.
Mark

Hi Mark,

Thanks for your post.

Arranging to clear the tax/VAT arrears should be a priority over any unsecured debts, as HMRC have more powers to recover money owed to them. Depending on how much you can afford to offer, you may be able to set up a Debt Management Plan for the other debts, or there could be other debt solutions that are more suitable for you.

Unfortunately, StepChange aren’t able to give advice to self-employed people. Instead, I’d recommend getting in touch with Business Debtline, who can give specialist advice on your options.

I hope this helps,

Aidan

Guyver3

First post hoping for some help or advice.

Its been a rough year so far split up with my wife in January after 19 years.  Went into bad depression and ended up losing my job.  Been looking for 3 months now with no luck so far.  I have £25,000 debt credit cards and loan.  I currently have absolutely no money and am sofa surfing between friends.  I am at a loss what to do about the debt.   I dont want debtors chasing the ex as kids live at home with her.  Any help would be appreciated. 

Jonathan

StepChange_Aidan

Hi Jonathan,

Thanks for your post. I’m sorry to hear about what you’ve been going through.

If you have no money at the moment, you should keep the debts on hold for now until your situation improves.

Creditors will try to contact you at your last known address, to avoid this from happening you could get in touch with them to update your contact details or give them a care of address.

We’d need more information about your finances to be able to give specific advice. The first step would be to create a budget, if you’d like to do this with StepChange you could use our online tool or give us a call to speak with an advisor.

I hope this helps,

Aidan