Can I use pension to pay off debts?

enthusiasticsaver

As others have said you cannot use your pension because you cannot access it yet and you should not do that anyway.  It sounds like a DMP  is the way to go and you can do it in just your name.  Payplan or stepchange can help you sort one out.  You will have to learn to live without credit though but at least the monthly debt repayments will be set at an affordable level and hopefully the interest frozen.  Make sure you have a new bank account for your salary and any essential outgoings and it must be a bank you do not owe any money to.  No overdraft or credit cards. You also need to start up an emergency savings account as you will not have access to credit.  You can do that immediately.  

The only issue may be if you need to remortgage with a new lender presumably if you are named on the mortgage any credit check will pick up defaults on your record for the next 6 years.  You are better  off telling your husband really but your call but I would think it is better coming from you rather than you having a remortgage declined because of your credit history.  It does not have to be immediately though.  Maybe get yourself sorted with a plan and pick a time when he is less stressed.  

kimwp

I know you don't want to tell your husband about your debt, but it sounds like the reason for the debt could be how the outgoings are split between you, so that might need to change otherwise you'll be back in the same situation?

desperateontheedge

I think the way the outgoings are split would be OK if it wasn't for the debt. My outgoings would easily be covered by my salary if it wasn't for having to pay the minimum payments on all my debts. He thinks I've been managing fine with money to spare, but the reality is I've been buying everything on credit that I should be using my salary for, then using all my salary to pay the minimum, it's just turned into a horrible spiral and now the credit has run out. 

I still haven't called anyone. I've been reading a few posts on here and there are a lot of people dealing with creditors selling their debts on to debt collection companies. Would I be better off trying to come to arrangements myself with the creditors individually? I've got two credit cards, two loans and one store card so I think I'd be able to keep track. Has anyone done this before? i'm just thinking if I'm in constant contact with the creditors myself it might stop them selling the debt on?

kimwp

desperateontheedge said:

I think the way the outgoings are split would be OK if it wasn't for the debt. My outgoings would easily be covered by my salary if it wasn't for having to pay the minimum payments on all my debts. He thinks I've been managing fine with money to spare, but the reality is I've been buying everything on credit that I should be using my salary for, then using all my salary to pay the minimum, it's just turned into a horrible spiral and now the credit has run out. 

Obviously you know more about your expenses than me, but so far you have only mentioned normal expenses eg kids clothes, petrol, car repairs etc, no secret gambling or expensive handbag habits. So it appears that you are in this debt because your income isn't enough to cover your outgoings (albeit exacerbated by the debt building). It would be worth doing a detailed SOA for the last six months/year to understand exactly where your money is going and if your income is enough to cover this (hopefully someone will provide the link)

Naomim

desperateontheedge said:

I think the way the outgoings are split would be OK if it wasn't for the debt. My outgoings would easily be covered by my salary if it wasn't for having to pay the minimum payments on all my debts. He thinks I've been managing fine with money to spare, but the reality is I've been buying everything on credit that I should be using my salary for, then using all my salary to pay the minimum, it's just turned into a horrible spiral and now the credit has run out. 

I still haven't called anyone. I've been reading a few posts on here and there are a lot of people dealing with creditors selling their debts on to debt collection companies. Would I be better off trying to come to arrangements myself with the creditors individually? I've got two credit cards, two loans and one store card so I think I'd be able to keep track. Has anyone done this before? i'm just thinking if I'm in constant contact with the creditors myself it might stop them selling the debt on?

I would think if you are on a DMP with one of the charities, the creditors are more likely to come to an arrangement than if you try and do it yourself.  It will also be easier to have one payment coming out to either payplan or stepchange on a set date than 4 or 5 different ones. It will certainly help you budget and you can move to self managed with the creditors later down the line if you feel inclined to do so.  

Naomim

fatbelly

desperateontheedge said:

I think the way the outgoings are split would be OK if it wasn't for the debt. My outgoings would easily be covered by my salary if it wasn't for having to pay the minimum payments on all my debts. He thinks I've been managing fine with money to spare, but the reality is I've been buying everything on credit that I should be using my salary for, then using all my salary to pay the minimum, it's just turned into a horrible spiral and now the credit has run out. 

I still haven't called anyone. I've been reading a few posts on here and there are a lot of people dealing with creditors selling their debts on to debt collection companies. Would I be better off trying to come to arrangements myself with the creditors individually? I've got two credit cards, two loans and one store card so I think I'd be able to keep track. Has anyone done this before? i'm just thinking if I'm in constant contact with the creditors myself it might stop them selling the debt on?

Selling the debt on is a good thing. You won't be able to stop them doing it anyway.

A d-i-y debt management plan is what many of those on this board do, though a lot did start with professional help, almost always from Payplan/Stepchange.

In your situation, definitely phone Payplan/Stepchange first and talk it through with someone. For most people here it's a positive experience. I can only say that I've only had positive experiences with Payplan (not so much dealings with stepchange) and their rep who visits us in normal times is just the nicest guy you could want to meet.

Let them do the donkey work and then if you want to take it over after say 12 months it will be a lot easier to do so.

You talk about 'constant contact' with your creditors. You don't want this. You don't want them constantly harassing you. At this stage, introducing a third party is worth doing. If your creditors want to hassle your debt manager, let them try. It'll be  like water off a duck's back to them, so in practice creditors won't try it on with them.

Babybelles

@fatbelly is giving you really good advice.
I’d give them a call to at least see what your options are. You don’t have to go through with the DMP if it isn’t for you but at least you will get some guidance to help you decide.

BlueJ94

I personally tried to pay off CC and Loans myself, but it just caused me more stress! I've managed to get more control of my finances in the last few days than I have ever done in the last 2 years of trying to do it myself. Obviously, you can try various solutios that would help you. I would recommend speaking to a debt charity, with DMP you can speak to them on live chat or email rather than over the phone.

MissFlossy222

The advantage of StepChange or Payplan managing your DMP is that they deal with all the calls and letters.
I think it might be quite difficult to manage it yourself and keep your husband from finding out, if your creditors are calling all the time.
It might be easier to talk to your husband about the debt once you can present the solution at the same time. If its any consolation, lots of other people on here have been in a similar situation and when they tell their partner about the debt its almost always not as bad as they thought.
The other advantage of going through a debt charity would be that you would have someone at the end of the phone to discuss it with. It would be very isolating doing it all by yourself.

BlueJ94

MissFlossy222 said:

The advantage of StepChange or Payplan managing your DMP is that they deal with all the calls and letters.
I think it might be quite difficult to manage it yourself and keep your husband from finding out, if your creditors are calling all the time.
It might be easier to talk to your husband about the debt once you can present the solution at the same time. If its any consolation, lots of other people on here have been in a similar situation and when they tell their partner about the debt its almost always not as bad as they thought.
The other advantage of going through a debt charity would be that you would have someone at the end of the phone to discuss it with. It would be very isolating doing it all by yourself.

Agree with this, my partner didnt know I was in Debt for a while. I eventually told him and he also told me he was also in a small amount of debt so it worked out okay. If anything it made me want to be debt free quicker! It's very daunting trying to plan and budget without help or your partner not knowing.. You can tell him once you've got a plan ahead of you