Struggling with debt? Ask a stepchange debt adviser a question

Bug_Incantation

Hi all. First post here.

I'm looking for some advice on the best strategy to tackle my current debt. I feel worried about not being able to save for important future goals (marriage, children) and constantly slipping further into my overdraft, even though I'm managing all my payments fine. I'd like to get ahead of this before it becomes a bigger problem.

Here is my current situation:

The Debts

Credit Card: Just over £3,000  which i payback 80 quid a month 

Halifax Loan: Approximately £5,300 which I pay £219 a month.

Payment to a Friend: Just under £1,000. I want to pay this back as quickly as possible.

Total Debt: Roughly £9,300.

I'm considering two options and would appreciate your input:

Strict Budget & Pay-Off: Stick with my current payments but aggressively overpay the debt with the highest interest rate (Avalanche method).

Consolidation: Look for a 0% Balance Transfer Card or a new Loan to combine the credit card and the Halifax loan.

Is consolidation a good idea, or is this simply a case of needing to be much stricter with my budget and paying things down one by one? I'm hoping for a structured plan to become debt-free faster. 

I always have spent too much, I've always been useless with money but I'm starting to feel a bit overwhelmed.

Thanks for any help you can offer.

ManyWays

Consolidation: Look for a 0% Balance Transfer Card or a new Loan to combine the credit card and the Halifax loan
You cant clear a loan with a 0% balance transfer card (unless its a money transfer, where its rare to get a large enough limit to cover the card and loan, and money transfer terms tend to be short anyway).

If you can get a BT offer to clear the card, that could help you clear it a lot quicker.

A consolidation loan is often a really bad idea, leading to you using the card again and getting deeper into debt. The loan has to be very cheap, not just a bit cheaper than the current debts.

How large is the overdraft and are you in it for almost all of the month?

I always have spent too much, I've always been useless with money
Perhaps, but perhaps not. Perhaps you werent great at one point, but then repaying the debts has left you short. We cant really tell if stricter budgeting is realistic unless you could post a Statement of Affairs here (preferably in a new thread where it would be seen by a lot more people than this long thread) see https://www.stoozing.com/soa.php for how to do this, 

StepChange_Aidan

Bug_Incantation said:

Hi all. First post here.

I'm looking for some advice on the best strategy to tackle my current debt. I feel worried about not being able to save for important future goals (marriage, children) and constantly slipping further into my overdraft, even though I'm managing all my payments fine. I'd like to get ahead of this before it becomes a bigger problem.

Here is my current situation:

The Debts

Credit Card: Just over £3,000  which i payback 80 quid a month 

Halifax Loan: Approximately £5,300 which I pay £219 a month.

Payment to a Friend: Just under £1,000. I want to pay this back as quickly as possible.

Total Debt: Roughly £9,300.

I'm considering two options and would appreciate your input:

Strict Budget & Pay-Off: Stick with my current payments but aggressively overpay the debt with the highest interest rate (Avalanche method).

Consolidation: Look for a 0% Balance Transfer Card or a new Loan to combine the credit card and the Halifax loan.

Is consolidation a good idea, or is this simply a case of needing to be much stricter with my budget and paying things down one by one? I'm hoping for a structured plan to become debt-free faster. 

I always have spent too much, I've always been useless with money but I'm starting to feel a bit overwhelmed.

Thanks for any help you can offer.

Hi,

Thanks for your post.

I would recommend continuing with the contractual payments to your debts, and if you can afford to, and offer more to clear the ones with higher interest sooner.

StepChange don’t recommend consolidation loans as it’s just moving the debt and you’re likely to end up having to repay more in the long run. We’d also advise against the use of further credit where possible.

As ManyWays has suggested in the above post, you could create a statement of affairs/budget to help us understand your situation, and so we can give specific advice. If you’d like some help to do this you could use the Debt Advice tool on our website.

I hope this helps,

Aidan

bdl23xx

Hello, I need advice.
I have been juggling debt with 0% cards (3) but have another credit card with Vanquis that has £4.4k and a high 45.9% interest rate. I'm unable to work due to health issues so am now living on UC so my credit rating has dropped so low that I can't shift this to another 0%. I've called them to ask if they could freeze interest or switch it to a 0% card with them, but they were really unhelpful and said as long as I can pay the minimum I shouldn't worry. They said if I can't pay the minimum they will default it. The three 0% cards end between Dec 2026 - Feb 2027 (totalling another £6.7k). Right now the Vanquis interest is £160ish per month, so at some point in the next few months the interest will take up the rest of the available balance and I'll hit the wall. 
My health issues are worsening and it looks likely I may not be able to work again anytime soon (if at all) so I can't increase my income. If I need to get a DMP, should I do it now or wait as long as I can? Or are there any other options? Any advice greatly appreciated.

pug_lover5

Hi! I am new to this so I will give this a go...

I have never really wanted to speak about this as I find it embarassing but I have seen how this forum has proved helpful to others. Financially, we should be in a much better position and further ahead in life with our own home, but sadly that's not our reality.

Myself and my partner have racked up a years' salary worth of debt between us, approx. £50K over the last 9+years, with loans and 0% balance transfers. The loans we have have been consolidated from the originals, but we're both now conscious of the remaining terms lengths and how this will have an impact on us being able to move out and own our own home. We both still live with parents, ages 31 and 39.

Due to our ages, we're conscious of the terms left and how old we will likely be once we're in a position to apply for a mortgage, and how our ages will likely become an impact.

We haven't missed any payments, and slowly our debt is gradually coming down. We do have issues budgeting, but I was wondering if it's worth requesting final settlement figures for our existing loans to re-quote, or is there anything else we're missing?

StepChange_Aidan

bdl23xx said:

Hello, I need advice.
I have been juggling debt with 0% cards (3) but have another credit card with Vanquis that has £4.4k and a high 45.9% interest rate. I'm unable to work due to health issues so am now living on UC so my credit rating has dropped so low that I can't shift this to another 0%. I've called them to ask if they could freeze interest or switch it to a 0% card with them, but they were really unhelpful and said as long as I can pay the minimum I shouldn't worry. They said if I can't pay the minimum they will default it. The three 0% cards end between Dec 2026 - Feb 2027 (totalling another £6.7k). Right now the Vanquis interest is £160ish per month, so at some point in the next few months the interest will take up the rest of the available balance and I'll hit the wall. 
My health issues are worsening and it looks likely I may not be able to work again anytime soon (if at all) so I can't increase my income. If I need to get a DMP, should I do it now or wait as long as I can? Or are there any other options? Any advice greatly appreciated.

Hi,

Thanks for your post.

You could set up a Debt Management Plan now, or some people prefer to wait until after the debts have defaulted, to ensure that they fall off their credit file after six years.

There’s likely be other debt solutions available as well, but we would need a budget to fully understand your situation and review your options. If you’d like to create one with StepChange you could use the Debt Advice tool on our website.

There’s a guide to the different types of debt solutions here.

Whichever one you decide to go ahead with, please bear in mind that your health and wellbeing should be your main priority. If you are paying anything to the debts, it should only be what you can afford after you’ve covered your ongoing bills and essential living costs, even if this leads to accounts defaulting. Please don’t feel pressured into paying any more to the creditors.

I hope this helps,

Aidan 

StepChange_Aidan

pug_lover5 said:

Hi! I am new to this so I will give this a go...

I have never really wanted to speak about this as I find it embarassing but I have seen how this forum has proved helpful to others. Financially, we should be in a much better position and further ahead in life with our own home, but sadly that's not our reality.

Myself and my partner have racked up a years' salary worth of debt between us, approx. £50K over the last 9+years, with loans and 0% balance transfers. The loans we have have been consolidated from the originals, but we're both now conscious of the remaining terms lengths and how this will have an impact on us being able to move out and own our own home. We both still live with parents, ages 31 and 39.

Due to our ages, we're conscious of the terms left and how old we will likely be once we're in a position to apply for a mortgage, and how our ages will likely become an impact.

We haven't missed any payments, and slowly our debt is gradually coming down. We do have issues budgeting, but I was wondering if it's worth requesting final settlement figures for our existing loans to re-quote, or is there anything else we're missing?

Hi,

Thanks for posting. There’s no need to feel embarrassed.

You could ask your creditors for final settlement figures, but if an amount is agreed, do you have a lump sum of money available to clear the debt? We don’t recommend consolidation loans or further use of credit.

There may be better ways to manage your debt, but I would need more details to be able to give specific advice. You could create a budget and review your options using our online tool or give us a call to speak with an advisor. 

Regards,

Aidan

SpaceCadet12

Question for the advisor:

I cant seem to get my head around letters from companies.  They are all worded differently.  My step change has been up and running for 6 months and I pay a substantial amount - some companies have sent me letters where they have agrees the plan and as long as I continue with payments, thats great.  Zopa feels more aggressive, scary about CCJs and things.   Are they just normal letters.  How often should I get them? 

MBNA have shared that they have no contact and have only just frozen the interest while I speak to step change. 

Thanks.

StepChange_Aidan

SpaceCadet12 said:

Question for the advisor:

I cant seem to get my head around letters from companies.  They are all worded differently.  My step change has been up and running for 6 months and I pay a substantial amount - some companies have sent me letters where they have agrees the plan and as long as I continue with payments, thats great.  Zopa feels more aggressive, scary about CCJs and things.   Are they just normal letters.  How often should I get them? 

MBNA have shared that they have no contact and have only just frozen the interest while I speak to step change. 

Thanks.

Hi,

Thanks for your post.

The number of letters and their tone will vary depending on each creditor, but it’s important to bear in mind that the majority of these will just be automatically generated. Please don’t be pressured into paying any more to the debts than you are already through your DMP.

The letters you receive from creditors may refer to court action or further steps that they could take to recover a debt, but it doesn’t mean that they will necessarily do this. They are unlikely to apply for a CCJ when you’re in a DMP, but if you do receive any court forms or other letters that concern you, please contact us and we can help.

There’s some more information about dealing with letters from creditors here.

All of your creditors should have been contacted by StepChange to confirm your DMP details when the plan was activated. If MBNA haven’t received anything, please get in touch with our Client team, and they will look into this for you.

I hope this helps,

Aidan