Token Payments Ending - Worried about what happens next

Maxrpg

Last year I went to StepChange and they set up a token payment plan of £1 per debt on my plan, and that has gone well despite still receiving letters almost every day from numerous debt collection places (Lowell etc) but this plan is coming to an end in October, apparently that's the maximum length of time it can run for.

The problem is my situation hasn't improved, I'm still unemployed, still £30K+ in debt, I've tried so hard to get work but there are certain physically demanding jobs that I can't do due to my health and despite having several interviews I haven't been offered anything. My situation is not going to improve any time soon and it is very stressful.

I guess my question is where do I go from here? - once the token payment plan ends what do you think my options will be?

Unemployed on Universal Credit, I have about £20 disposable income per month left over, so it's not like I will be able to afford to pay more towards my debts, £1 a month per debt is literally all I can afford. I have nothing else to give.

My savings have gone. I've sold a lot of things just to get a few quid each month so I can buy a bit of extra food, top up my electric etc. Cost of living is killing me and UC isn't even enough to survive on. I'm literally at rock bottom in life and I have no idea where I'm going to end up.

Grumpelstiltskin

Do you qualify for a DRO? Do you rent or own?

sourcrates

You can make token payments indefinitely, but its not a good long term plan, as it doesn't clear the debt and keeps the timer running for the debts to become statute barred, its only stepchange policy for them to just last one year.

So as your circumstances are currently stopping you from making any real headway, my suggestion is to ditch stepchange, as they are doing nothing for you here, send letters to all your lenders telling them you can`t afford to pay anything, you are unemployed, high cost of living, etc and you just can`t afford it, ask them to consider writing off the balance as your situation looks unlikely to improve anytime soon.

See what response you get from that.

RAS

Given your health limits the options for work, I'd agree that write offs on ill-health and affordability grounds could be useful. At least try it.

Stepchange have a one year policy, there's no legal basis. But it does avoid the situation that until recently saw people on minimal incomes paying £1 a year on debts for 20 years.

If they'd paid nothing most of that debt would have been statute barred for years.

Maxrpg

https://forums.moneysavingexpert.com/discussion/comment/82108564#Comment_82108564

But I can't just pay nothing, can I? - They'll come after me and I'm scared that it'll go to court, I'll get bailiffs at my door, they'll take what little I have (Laptop, Phone, TV) and I'll have nothing. It's scary.

Grumpelstiltskin

OK Forget bailiffs, it isn't going to happen. If you can't afford to pay unsecured debts then stop paying them. Nothing terrible is going to happen if you don't pay.

RAS

Of course you can pay nothing for consumer debt. It's really important that you keep your CT up to date, as that's the thing that can lead to bailiffs.

We don't know enough to advise on other options because you've not explained if you rent, have a mortgage or a house? Or an expensive car?

In the short-term do check if there are any community pantries or PAYF cafes locally, or Sikh temples to provide goods and meals. Are you single or in a shared household?

Maxrpg

https://forums.moneysavingexpert.com/discussion/comment/82129979#Comment_82129979

By CT you mean Council Tax? I'm not in debt with that, pay it every month - I rent from housing association and don't have a car. In terms of assets that I own they'd be worth about £1k total. Savings are ZERO and the only current income I have is UC benefits. I live with my wife. She's also not working currently, she struggles with things a bit due to a small stroke she had a few years back.

ManyWays

I think you should go to your local Citizens Advice and ask about a Debt Relief Order (DRO). You have a secure, tenancy, no valuable assets to protect (things like a laptop are valued at second hand value ) and are out of work.

in a DRO you don't have to make any payments and the debts are written off at the end of year.

RAS

Glad you are on top of the Council Tax.

You personally meet the criteria for a Debt Relief Order. The only downside could be if you rented privately. Stepchange may not have suggested one as they lost the contract to provide them a couple of years ago.

CAB and a few others provide them. You would need to accept that you needed to keep your income stable for the whole year. If you went back into work and had more than £75 per month surplus income, the DRO would fail. But you can do what you want after the year is up.

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/82129939#Comment_82129939

It really does pay to do your research on such matters, as its all too easy to overthink the repercussions of not paying non essential debts, for example, you are more likely to have ET knock on your door than a bailiff for a consumer credit debt.

There is a long legal process before any enforcement action can be taken, and lenders don`t usually take action against those who can`t pay, what point is there in that?

Household goods and things you need for work are exempt from a bailiffs inventory, and of course if you don`t let them in, as they cannot force entry to private property for consumer debt, the whole thing becomes academic anyway, a bailiff is only a problem, if you allow them into your home, something you should never do.

Last month I suggested writing to lenders and asking them to write off your balances, did you do that?

Failing that go with the advice to check out a DRO, otherwise you`ll be back a year from now, no further ahead.