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Struggling with debt? Ask a debt advisor a question

edited 18 November 2016 at 2:10PM in Debt-Free Wannabe
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  • StepChange_RachaelStepChange_Rachael Organisation Representatives - Private Messages may not be monitored
    375 posts
    Third Anniversary 100 Posts
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    Hi

    Welcome to the forum and thanks for posting.

    I can understand your concern that your son is struggling with his finances and that you’d want to help them find the best way forward to becoming debt free.

    I think it would be good for your son to be able to see exactly what comes in monthly and what his expenditures are, what his payments to the creditors are and what is left over. Using a budget to see the full picture of your financial situation, especially if it’s not something they’ve done before can be really useful to highlight areas of over spending.

    Your son will then be able to see the full picture, how long it’ll take him to pay back the debts and what he has left over realistically for his social life.

    Ultimately if he’s able to keep up with his essential living costs, minimum payments to the creditors and is either breaking even or has something left over at the end of the month then this is the best scenario as it means he’s not getting into further debt and not at risk of further action from the creditors.

    A realistic budget will also show if your son, once he’s budgeted for his essential living costs, is struggling to meet the minimum payments to his creditors. If this is the case then I’d suggest that your son seeks further debt advice.

    For tailored debt advice your son can use our anonymous online tool called Debt Remedy. This can be completed online by including his income, expenditure and debts.

    Once completed it will them let him access our advice and recommendations based on his individual situation. The personal action plan includes a budget which can be used going forward to help keep on top of his monthly expenditure.

    You can access Debt Remedy here.

    Take care
    Rachael



    Hello, I hope you can give me some advice. My son has debts around 10k and I am quite worried about him. He is 25 and earns 30k pa. He is single and has a healthy social life but I think that is why he is in a lot of debt. He doesn't like to dwell on his debts and goes out to enjoy his life (to stop feeling down about his money situation) but it's making it worse. He is trying to pay his debts at the same time but his situation just doesn't change. Sometimes he gets really upset about his situation but he is young and wants to enjoy himself too. I don't know what to do to help him. I advise him to not spend money on going out so much but he is so used to that life that he feels he can't change it and doesn't want to miss out on anything his friends are doing. Please can you help?
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • assj_2assj_2 Forumite
    2.1K posts
    Ninth Anniversary 1,000 Posts Combo Breaker
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    Can I please ask, how does a lump some payment IVA differ. Can I simply opt to offer a lump sum payment? How much is likely to be accepted? Thanks for any guidance or advice.
  • StepChange_RachaelStepChange_Rachael Organisation Representatives - Private Messages may not be monitored
    375 posts
    Third Anniversary 100 Posts
    ✭✭
    Hi

    Thanks for your post.

    Individual Voluntary Arrangements (IVAs) really do vary for the individual. A lump sum IVA will normally last 6 months and will in most cases be one lump sum only. Some lump sum IVAs will be expected to make monthly contributions towards the IVA as well.

    A lump sum IVA differs to a regular IVA as an IVA will normally last 5-6 years and consist of monthly payments only.

    As the IVA has to be agreed by 75% of the creditors there is no set amount because it’s up to the creditors if they are willing to accept a reduced payment in an IVA or not.

    They may decide not to accept and instead take the collection routes available to them to collect for the debt in full.

    There is also the option of offering the creditors a full and final settlement. This isn't a form of insolvency but an informal agreement.

    It’s important for anyone taking this route to treat the creditors fairly and offer them each an amount based on the lump sum available and the debt total. This way the creditors are offered a fair payment.

    It’s also important if a settlement is accepted, to ask for written confirmation of the agreement before the debt is paid.

    If you have a lump sum available, expected lump sums or assets that you’d be willing to release and want to look into a lump sum IVA I’d suggest seeking some further advice tailored to your situation.

    You can contact us for free advice and support. Here are our contact details.

    Thanks
    Rachael


    ASSJ wrote: »
    Can I please ask, how does a lump some payment IVA differ. Can I simply opt to offer a lump sum payment? How much is likely to be accepted? Thanks for any guidance or advice.
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • I have stupidly ran up a huge account with Very, and they are now looking for £200 per month which I'm really struggling with. Does anyone know how I can go about asking them if I can go on a payment plan with them?
  • Former_StepChange_RichardFormer_StepChange_Richard Organisation Representatives - Private Messages may not be monitored
    119 posts
    Lauram13 wrote: »
    I have stupidly ran up a huge account with Very, and they are now looking for £200 per month which I'm really struggling with. Does anyone know how I can go about asking them if I can go on a payment plan with them?

    Hi

    Welcome to the forum. I'm sorry to hear your struggling, but you've come to the right place for some help.

    You can certainly ask Very if they will agree to a payment plan with you. If you're unable to pay what they have asked they will likely want to go through an income and expenditure budget with you to find out what you can afford to pay. If they feel you cannot pay them enough, they will likely suggest that you contact an advice charity (such as ourselves) and go through the advice process to see what options you have.

    You can start our advice process now if you like as we will be able to help work out what is fair and affordable for you to pay. You can use our Debt Remedy tool on our website to build a budget in your own time. Once this is complete the website will suggest the best plan to help you with your debt. All of this completely free too.

    I hope this helps.

    Richard
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • Hi,

    Please can I ask - what happens to your debt if you die (Scotland)? My partner won't move in with me as he is concerned that if I were to die then creditors would chase him for my outstanding debt. As I understand it I thought they would take my mortgaged property and sell it as my estate in order to settle a balance but because he is not named on any of the loan forms and we aren't married that he would not be liable - please can you confirm?

    Thanks!
  • Hi guys, would appreciate your help on this.

    I currently have 25K of debt which is being administered with Payplan (currently paying about £60 per month shared across 5 creditors)

    I defaulted on all accounts in 2012 during a separation.

    Next year I should be receiving early inheritance lump sum to the value of 25/30K So I would love to clear all outstanding debts and be debt free. However I would like to apply for a mortgage with my new partner in a couple of years and understand that companies like halifax look at your credit file in fine detail and any partial settlements would appear.

    A - Should I clear all debts at 100% of value before the 6 year default period ends (a couple are offering settlement options now)

    B - Wait until the 6 years defaults are all up? Then ask for settlement figures and pay in Full/Partial.

    I don't want to partially settle if it reflects badly with high street lenders in the future with the previously closed accounts that show on your credit file.

    I really appreciate your help!

    Thanks in advance:beer: Roj.
  • StepChange_RachaelStepChange_Rachael Organisation Representatives - Private Messages may not be monitored
    375 posts
    Third Anniversary 100 Posts
    ✭✭
    Hi

    Thanks for your post.

    Liability for debt can’t be transferred to another person. You're right that if there's any debt outstanding when someone passes away then the deceased's assets may be used to make up for the remaining debt such as equity from a property. If there aren't any assets the debt would be written off.

    Even if married and one partner dies then debt solely liable to the person who passed away won’t be transferred over to their spouse. However as previously mentioned the deceased’s share of assets could be used to make up the remaining debt.

    As you’ve mentioned your partner isn’t named on any of the credit agreements then he wouldn’t be liable to pay any remaining debt even after your death.

    I hope this will help put your partner at ease.

    Thanks
    Rachael


    Hi,

    Please can I ask - what happens to your debt if you die (Scotland)? My partner won't move in with me as he is concerned that if I were to die then creditors would chase him for my outstanding debt. As I understand it I thought they would take my mortgaged property and sell it as my estate in order to settle a balance but because he is not named on any of the loan forms and we aren't married that he would not be liable - please can you confirm?

    Thanks!
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • StepChange_RachaelStepChange_Rachael Organisation Representatives - Private Messages may not be monitored
    375 posts
    Third Anniversary 100 Posts
    ✭✭
    Hi Roj

    Welcome to the forum and thanks for your post.

    I can understand that you’d want your credit file to be in a good position when applying for a mortgage.

    With credit files many different things can positively or negatively impact them and mortgages companies will also take into consideration your income, how long you’ve been in your current employment and down payment etc. before offering a mortgage.

    Defaults will only be issued once for each debt and will come off of your credit file after 6 years regardless of the status of the debt. They will have some negative impact while they are on there.

    When you’re in a Debt Management Plan (DMP) your credit file will show that you’re making regular payments back but at a reduced amount.

    If you clear the debt in full then the creditors will issue a note to say the debts successfully paid in full and is likely to be viewed by creditors more favourably than if the debt is partially settled as this shows some debt hasn’t been paid back.

    Any notes on your file will normally last no longer than 6 years before being removed.

    In summary I can’t see that it would make a difference to wait for the default to come off before settling the debt as it won’t impact the status of the default. However, it’s my understanding that a debt paid in full is likely to be more favourable on your credit file.

    If you'd like to explore debt solutions further including settlements then you can find our contact details here.

    Take care
    Rachael




    rojb123 wrote: »
    Hi guys, would appreciate your help on this.

    I currently have 25K of debt which is being administered with Payplan (currently paying about £60 per month shared across 5 creditors)

    I defaulted on all accounts in 2012 during a separation.

    Next year I should be receiving early inheritance lump sum to the value of 25/30K So I would love to clear all outstanding debts and be debt free. However I would like to apply for a mortgage with my new partner in a couple of years and understand that companies like halifax look at your credit file in fine detail and any partial settlements would appear.

    A - Should I clear all debts at 100% of value before the 6 year default period ends (a couple are offering settlement options now)

    B - Wait until the 6 years defaults are all up? Then ask for settlement figures and pay in Full/Partial.

    I don't want to partially settle if it reflects badly with high street lenders in the future with the previously closed accounts that show on your credit file.

    I really appreciate your help!

    Thanks in advance:beer: Roj.
    I work as a debt advisor for StepChange Debt Charity and have specific permission from Martin to post on these boards to try and help those in debt. Read more information on StepChange Debt Charity in the Debt Problems: What to do and where to get help article. If you find you're struggling with debt and you need further help try our online advice facility Debt Remedy.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
  • Thank you and I hope you can help.

    I will try to keep this short.
    I paid a lump sum on my council tax which took me to July '16, halfway through the month.
    I didn't get the first notice that the remaining balance of July was due. (it had been hidden by my housemate who is dyslexic and has a tendency to hide letters).
    I then received a hearing letter in August, upon which I rang the council.
    Speaking with a live advisor, I requested the amount which would bring me up to date and paid that over the phone.
    I then was under the impression that my next month's payment would be due by the end of the month as usual.
    I then received a letter from Equita and, not wanting to deal with them (I won't pay my council tax to a private company, sorry), I rang the council again.
    Long story short, the hearing in August had gone ahead (?) and apparently I was liable to pay the council tax IN FULL.
    After a long conversation where the council rep insisted that the money had to be paid to Equita, I said to the advisor 'so, if I pay the council tax directly to the council, in full, you would not accept the money?'. She confirmed that they would not refuse any payment. I paid in full.
    I am now receiving threatening letters from Equita. my council account shows that all council tax was paid, but there is now a charge on it for £127 for the bailiff.
    Equita is demanding £426.

    my questions are:
    what is the legal standing of the bailiff and of the council?
    how should I deal with these bailiffs?
    as it is not even the end of the year and my council tax is paid in full, how is any of this acceptable?

    I am a reasonably confident individual who pays all my bills on time and I find this difficult. how the hell do people deal with this who are less secure, both financially and socially? horrible.

    thank you for any advice you can give.
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