Forum Home» Debt-Free Wannabe

Struggling with debt? Ask a debt adviser a question - Page 6

New Post Advanced Search

Struggling with debt? Ask a debt adviser a question

edited 24 July 2018 at 2:41PM in Debt-Free Wannabe
1.3K replies 268.5K views
134689130

Replies

  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi Chiram,

    Thanks for your post.

    It’s great to hear your son is doing well in his new job and that he’s now able to make payments to his creditors.

    I think paying these debts to help your son is a really nice gesture, but the reasons you gave for not paying his debts a second time are also very valid points. Ultimately you’re the only one who can make this decision but before you do, there is a third option you and your son could consider.

    Your son can create a budget online with us (and you can help him do this). We’ll then be able to help and support your son to repay his debts in a way that’s manageable for him. Here’s the link to our free online Debt Remedy tool.

    I hope this is helpful.

    All the best,

    Kirsty
    chiram2015 wrote: »
    Hi all

    I need some guidance as to what to do with my son's debts.

    The total debt is around 4K with 5 providers and arose 2 years ago. As I had bailed him out previously, I decided not to do so for these debts to try and make him more responsible with his money

    Instead of bailing him out we sat down together and arranged DMPs with the 5 providers but in 2015 he lost his job and unknown to me he stopped the DMP payments and they have never been reinstated (I only found this out last week).

    He is now doing well in a new job and earns 24K p.a.

    My big Q is

    1. I could clear all the debts in full and arrange a payment plan to me from my son - this will clear his debt record quicker but my concern is that I am just going back to what I did years ago

    or

    2. We re-contact the providers and try and reinstate the DMPs

    Any guidance would be very helpful.

    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.
  • Good Morning, as title suggest im looking for some advice on how quickly to reduce debt and whether debt is managable or shall i sell a car that i need to reduce debt faster and make potential savings greater?

    I'll try and be as clear as possible (but please ask if confused)

    One Account Debt = £-12415.47 (Facility is £40,000) based against valuation of home at £165k.. Home is paid for through the legacy of my Dad.

    Option A - KEEP CAR

    Period: 16 Dec 16 - 16 Apr 21

    Debt repayment @£257.59 p/month
    53 payments @£257.59 = £13,652.27 (Interest = £1,236.80)

    Savings generated in Period (if keep car) = 53 x £627.84 = £33,275.52


    Option B. - SELL CAR

    Sell Car (have 2 cars in household required for both my partner and i to get to work) valued at £11,000 and reduce debt by £6000 and use £5000 to buy an alternative car.

    Debt repayment @£257.59 p/month
    27 payments @£257.59 = £6,954.93 (Interest = £539.46)

    Savings generated in Period (16 Dec 16 - 16 Apr 21)

    = 53 payments x £490.24 = £25.982.72 (A)
    PLUS
    27 payments x £137.60 (whilst debt period is in effect) = £3715.20 (B)
    26 payments x £395.19 (£490.24 - £137.60) (once debt is reduced to nil) = £10,274.94 (C)
    53 payments x £490.24 (money available for savings) = £25,982.72 (C)

    Savings generated in period (if sell car)
    (A) + (B) + (C) = 25,982.72 + £3715.20 + £10,274.94 = £39,972.86

    To conclude the difference in savings generated is i keep the car is :-

    £39,972.86 - £33,275.52 = £6,697.34 missed savings potential if i keep the car.

    Some help and advice would be greatly appreciated, please ask ANY questions for clarification,

    thanks

    L
  • hi, I am currently on a DMP and due to an inheritance I am in a position to clear my debt (yay!)

    my question is... is it better to let the company (Payplan) negotiate a settlement figure on my behalf or for me to contact my creditors directly?

    It seems I have 2 choices ... pay in full or offer a lump sum

    Thanks
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi Ibrahani,

    Thanks for your post.

    It sounds as though you are in a good position at the moment as you’re able to meet the contractual payments to your debt and pay a contribution into savings.

    I’m a little bit confused by the figures in option B but based on your summary it suggests that you would be able to save £6,697.34 more if you sell the car.

    It all really depends what you are saving for and if the extra savings will make a difference to your overall plans. It certainly doesn’t look like it is essential for you to sell your car in order to be able to manage your debt but it would make you debt free more quickly.

    A third option, if you want to clear the debts quicker, is to pay a little more each month to the debt and a little less into your savings. Again this really depends on what your future plans are.

    Overall, as we specialise in problem debt, I think it might be better for you to speak to an Independent Financial Advisor who will be able to look at your situation in more detail. The Money Advice Service can help with you choose a Financial Advisor who would suit your situation.

    Best wishes

    Kirsty
    lbahrani wrote: »
    Good Morning, as title suggest im looking for some advice on how quickly to reduce debt and whether debt is managable or shall i sell a car that i need to reduce debt faster and make potential savings greater?

    I'll try and be as clear as possible (but please ask if confused)

    One Account Debt = £-12415.47 (Facility is £40,000) based against valuation of home at £165k.. Home is paid for through the legacy of my Dad.

    Option A - KEEP CAR

    Period: 16 Dec 16 - 16 Apr 21

    Debt repayment @£257.59 p/month
    53 payments @£257.59 = £13,652.27 (Interest = £1,236.80)

    Savings generated in Period (if keep car) = 53 x £627.84 = £33,275.52


    Option B. - SELL CAR

    Sell Car (have 2 cars in household required for both my partner and i to get to work) valued at £11,000 and reduce debt by £6000 and use £5000 to buy an alternative car.

    Debt repayment @£257.59 p/month
    27 payments @£257.59 = £6,954.93 (Interest = £539.46)

    Savings generated in Period (16 Dec 16 - 16 Apr 21)

    = 53 payments x £490.24 = £25.982.72 (A)
    PLUS
    27 payments x £137.60 (whilst debt period is in effect) = £3715.20 (B)
    26 payments x £395.19 (£490.24 - £137.60) (once debt is reduced to nil) = £10,274.94 (C)
    53 payments x £490.24 (money available for savings) = £25,982.72 (C)

    Savings generated in period (if sell car)
    (A) + (B) + (C) = 25,982.72 + £3715.20 + £10,274.94 = £39,972.86

    To conclude the difference in savings generated is i keep the car is :-

    £39,972.86 - £33,275.52 = £6,697.34 missed savings potential if i keep the car.

    Some help and advice would be greatly appreciated, please ask ANY questions for clarification,

    thanks

    L
    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_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi

    Thanks for your post.

    I can see this was also sent to us as a private message which I’ve replied to seperately.

    Please see your private messages for my response and let me know if you’ve any further queries.

    Thanks

    Kirsty
    krazykaz64 wrote: »
    hi, I am currently on a DMP and due to an inheritance I am in a position to clear my debt (yay!)

    my question is... is it better to let the company (Payplan) negotiate a settlement figure on my behalf or for me to contact my creditors directly?

    It seems I have 2 choices ... pay in full or offer a lump sum

    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.
  • Hi Ibrahani,

    Thanks for your post.

    It sounds as though you are in a good position at the moment as you’re able to meet the contractual payments to your debt and pay a contribution into savings.

    I’m a little bit confused by the figures in option B but based on your summary it suggests that you would be able to save £6,697.34 more if you sell the car.

    It all really depends what you are saving for and if the extra savings will make a difference to your overall plans. It certainly doesn’t look like it is essential for you to sell your car in order to be able to manage your debt but it would make you debt free more quickly.

    A third option, if you want to clear the debts quicker, is to pay a little more each month to the debt and a little less into your savings. Again this really depends on what your future plans are.

    Overall, as we specialise in problem debt, I think it might be better for you to speak to an Independent Financial Advisor who will be able to look at your situation in more detail. The can help with you choose a Financial Advisor who would suit your situation.

    Best wishes

    Kirsty

    Hi Kirsty,

    Thanks for your reply. Really helpful. You're correct, effectively i'd be able to save approximately £7k more if i were to sell the car. This said, i'd have to source a cheaper car than at present, perhaps not as reliable as current car and go through the hassles of selling my current car for market value. Could actually do without that hassle having had time to reflect on your reply.

    Saving, not particularly saving for anything specifically, just thinking about the future of our children, now 7 and 5. Would like to be able to take them on nice holidays and be able to afford nice things for them, but hey 'you cut your own coat....'

    Which brings me onto my next question, if i may, how much should we save as a family? is there a general rule of thumb? what percentage of our our net income and other credits should we put aside for a rainy day? unplanned expenditure? the future? This is where i have trouble in making accurate decisions.

    Currently, my salary pays for Living plue ALL bills over a 4 weekly rolling period. My wife's salary and other benefits goes to reducing our debt and into savings as mentioned above.

    Your further suggestions and advice would be greatly appreciated and again, thank you for your reply to my original post.

    regards

    L
  • StepChange_KirstyStepChange_Kirsty Organisation Representatives - Private Messages may not be monitored
    180 posts
    Hi,

    Thanks for your response; I’m glad you found my last post helpful.

    It’s difficult to say exactly how much you should be saving each month as it all depends what is affordable for you and your family based on your income and what your living costs are each month. It might be useful for you to create a budget showing your income and expenses to see what you have left over each month that you might be able to set aside for whatever you choose to use it for in the future.

    The main Money Saving Expert site has an article about savings and it also includes a savings calculator which you may find very useful.

    It seems the main decision you need to make is whether to overpay your current account mortgage or to put the money into savings. This article provides a very useful guide about overpaying your mortgage v savings.

    Both of these articles are general guides. You still might find it better to speak to an Independent Financial Adviser who can provide advice which is more specific to your circumstances.

    Hope this is helpful.

    Kirsty
    lbahrani wrote: »
    Hi Kirsty,

    Thanks for your reply. Really helpful. You're correct, effectively i'd be able to save approximately £7k more if i were to sell the car. This said, i'd have to source a cheaper car than at present, perhaps not as reliable as current car and go through the hassles of selling my current car for market value. Could actually do without that hassle having had time to reflect on your reply.

    Saving, not particularly saving for anything specifically, just thinking about the future of our children, now 7 and 5. Would like to be able to take them on nice holidays and be able to afford nice things for them, but hey 'you cut your own coat....'

    Which brings me onto my next question, if i may, how much should we save as a family? is there a general rule of thumb? what percentage of our our net income and other credits should we put aside for a rainy day? unplanned expenditure? the future? This is where i have trouble in making accurate decisions.

    Currently, my salary pays for Living plue ALL bills over a 4 weekly rolling period. My wife's salary and other benefits goes to reducing our debt and into savings as mentioned above.

    Your further suggestions and advice would be greatly appreciated and again, thank you for your reply to my original post.

    regards

    L
    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.
  • Hello,
    I have recently been receiving letters, emails and texts from a company called Cabot who recently brought an old credit card debt i had with Tesco Finance.
    However, the old debt no longer shows on my credit file having checked my Equifax report and having recently re-mortgage, it never came up on any checks either.
    As i understand it, there is something called statute barred which means after so long the original debtor can no longer chase the debt, although it is still unpaid.
    So, where do i stand with this Cabot lot who are chasing me for the full debt, even though they clearly brought it for very little?!!!!
  • My wife has a CCJ set against her by Lowell, nice bunch!!!

    It is for £3,500, she tried to mediate a settlement figure but they were no interested and were happy for her to set up a £5/month direct debit!

    I may be in a position to obtain some funds and would look to try and arrange a settlement against this CCJ, is this possible and if so, who do i contact, Lowell or the Courts?

    I look forward to hearing from you soon!
    :beer:
  • Hi, I have a bank account that was closed and in collections. It defaulted as I moved address. I owe £1900 but they have offered £1300 settlement. If I settle, then it will be marked on my credit file as partially satisfied rather than fully. As the account has already defaulted it will be on there for 6 years. How much difference will the account being partially rather than fully satisfied have on my credit file? They have agreed it would be final, so I wouldnt be chased for the outstanding £600 if I settled.
    Please advise...
This discussion has been closed.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support