Stepchange closed my account due to circumstances. What to do next :(

Carrera74

Just looking to sound off and for some advice please. 

I have been paying a £1 token payment to my creditors for a year and previous to that I had a DMP on and off that failed for numerous reasons.  For the last year whilst the token plan was in place the incessant calls stopped, no more dreading the postman coming.  It had felt like a weight has been lifted and my mental health needed the break.

It was my review a few weeks ago and it looked like I could move onto a DMP despite it taking 49 years to pay off my debt the advisor said it would give me some more breathing space.  The paperwork arrived and a couple of things had been missed off so I had less per month to offer my creditors which meant I am unable to sign up to the minimum amount needed to go ahead with a DMP.  I rang Stepchange and advised of the missing amount and with the new calculations it will take me 99 years to pay off my debt with the amount I have available to offer now.  I also mentioned that my work base is moving early next year which could potentially have a negative change to my surplus amount each month.  Because of this Stepchange have advised that they can only support me with bankruptcy or an IVA.  Neither of these are possible due to my personal circumstances at least for another couple of years so they have closed my case and advised that I should go for a temporary offer of payment liaising directly with them until my circumstances change.  I feel lost.  I have always leant on Stepchange and now just feel it's a matter of time before I feel like I'm drowning in it all again

I had been thinking about an offer of a reduced settlement (my Mum had offered a small amount if this is do'able but would be a maximum of 10% of what I owe and looking on here that will not be accepted and on another post someone mentioned asking for a write off as my debt will never be paid off.

I have the letter ready to send to all my creditors that Stepchange have provided that states I either offer a small amount (such as a £1 although my budget shows I can now pay £2 to each creditor) or request a temporary suspension and enclose my budget.  Is this the time to request the debts to be written off or after I write to everyone to say I have had a review and my circumstances haven't changed and are unlikely to in the future and I'll never pay this off.

Any guidance would be really appreciated. 

MovingForwards

Did you follow what was suggested in your previous thread?
https://forums.moneysavingexpert.com/discussion/6402142/chances-of-partial-settlement-if-on-a-token-repayment-or-minimum-dmp-better#latest

Without seeing a statement of affairs, knowing debt levels and why you can't look at an IVA now, but can in a few years, it's difficult for anyone to comment further.

An option is to write to everyone and offer £1pm token payments and say you're dealing with it rather than stepchange. Then when financial circumstances change again go back to SC.

Carrera74

Hi MovingForwards

The only suggestion was the write off which I hadn't heard of and didn't think possible and when I have looked at it it seems that you need to either have a severe MH condition or be out of work.  Whilst I suffer with anxiety and related conditions, I do work full time.

I also only spoke to StepChange a few days ago so the options that I believed were open to me (token repayment plan or a DMP) aren't available via them any longer hence coming back to ask for advice.

I didn't know if I should be offering a £1 for the next few years in the hopes that my circumstances change.  Unless I come into a windfall that is unlikely or seek to go bankrupt in 3 years if my circumstances allow it.  Or go the IVA route but currently I would not be able to make the minimum payments for that.

My debt is approx. £48K, and my surplus after my budget is around £50 a month.  When I have tried to budget more with previous DMPs it hasn't worked, and my outgoings are even higher now so want to be sure I can afford what I am signing up to.  In relation to the IVA the property I live in was sold to a family member to get my ex-husband off the mortgage and to enable me to have a roof over mine and my disabled son's head and Stepchange advised that this would be seen as a beneficial interest because of the circumstances around the sale.  It's all very complicated and at the time I was desperate, and this seemed like the only option before my ex put the house on the market.

I think I need to offer to continue with the token payments until I get my head around this all again.  

Thank you for responding.

MovingForwards

Just do token payments, try saving a pound or so each month and look to pick the debts off in the future as they get sold on to other companies for pennies.

As was said on your other thread, companies do make commercial decisions to write debts off, especially when there's no chance of circumstances changing in the future. It costs them a lot more to send generic letters and to process that £1pm than £1 you're spending.

Hope things do get better in the future, but for now don't worry about the length of time it would take to clear.

Remember, if you've not got the money, you've not got it to pay out. 

Many of us have been in similar situations and come out the other side. Although it never felt like things would improve, they do.

RAS

You don't have to use a debt charity to run a DMP. Just advise your creditors you are taking over your DMP management and set up SOs for £1per month.

When they respond point out that you are have left a (difficult)marriage and have a disabled child. Take a bit of advice here and some might write off the debt. Depends who it is with.

cymruchris

Are you holding off bankruptcy as you have an interest in a property?

EssexHebridean

Beneficial interest in a property by the looks of it - but whether that would have an effect in bankruptcy is outside my knowledge. @fatbelly or @sourcrates may have more info for the OP on that one though. 

fatbelly

Yes bankruptcy could cause more problems than it solves. A DRO would be safer (if debts below 30k) as the worst that could happen is that it would fail, and you would lose the £90. After all, the BI is not established. Talk of an IVA seems unrealistic as there isn't enough surplus income.

But in the first instance I would ask for write-offs. Nothing to lose at all with that strategy.

sammyjammy

When you owned the house was there still a mortgage on it?  Did the family member buy your ex out or both of you?  Is there still a mortgage on the property?  If house owned now by family member did you receive any funds for giving up ownership?  If we can work out what the beneficial interest if any might be maybe bankruptcy could be an option?

fatbelly

The problem is it's the OR's view on that transaction that will count, not ours or Stepchange's. Too risky IMO.

SusieT

For now I would simply pay them £1 a month by setinng up standing orders, make sure you use the correct reference number. You may not even need to write to them if you start straight away. That should give you no chasing letters from some of them and let you relax until you can sort out a long term solution.