Struggling with debt? Ask a debt adviser a question

StepChange_Rachael · 10 May 2018 at 1:04PM

Hi Spoony

Welcome to the forum.

Thanks for explaining the full situation. From reading the post I think it’s clear that you’d benefit from an alternative option to deal with your debts as trying to maintain the minimum payments doesn’t seem an option for much longer.

I wouldn’t suggest borrowing further as it rarely helps if the current minimum payments aren’t affordable, especially taking out secured debt as the risk if payments are missed are much greater.

Even though you’re expecting a positive financial change, it’s still a way off. Instead of continuing to struggle to stay afloat, I’d suggest speaking with a free debt advice service to explore suitable debt solutions based on your situation.

You’ve mentioned that your credit file is at a relatively low rating even with maintaining the payments, its unlikely alternative debt solutions would have a huge impact on your current file if it's poor and credit files do generally improve overtime.

To be able to provide accurate debt advice an advisor would need a good idea of your full financial situation. You can find a link for online debt advice and support here through StepChange.

Thanks
Rachael

Spoony8 wrote: »

Hi guys,

Ill give you a current run down of my financial situation and explain as to how i am starting to struggle to maintain payments and im not sure how i can start to recover.

I am a home owner with about 35k in equity in my home. My total outgoings on bills are £1200 which are all paid and up to date.

I have 3 credit cards which are all maxed. £8000 with Barclaycard, £3750 with Aqua (who have just raised the interest) and £2250 with Capital One. I make all these payments on time every month and they amount between £400-£450 per month.

I also have a £2300 overdraft which charges daily interest of around £3 per day.

And finally and the worst is that i have around £4000 in payday loans that i am barely able to keep up with. These are spread between 6 companies, i am paying off payments but having to shuffle and juggle payments around so that i can afford to pay them and survive for the month as well as keeping on top of the £1200 in bills and £450 in credit cards. I basically gradually top up the payday loan from one company to try and keep myself afloat and the interest down. My living costs are about £200 per month on top of that. I have no dependents.

My income after tax is roughly £2500 per month, however in October/November i am due a back pay of around £3-4000 and i am due an increase in wage to 37K a year. Im not sure i can keep this up until then.

Any advice would be appreciated as i have been looking at taking out a secured loan against my home but i have read thats a bad idea. My credit rating is just below average but is poor. I have no CCJ's or defaults on my account and not missed a payment for over 6 years.

Please Advise

Spoony

StepChange_Rachael · 10 May 2018 at 1:24PM

Hi

Thanks for posting.

It’s a tough situation your partner was left in and it’s a long time they’ve been paying back the debt. Based on the debt total and if the £100 a month is all that’s affordable once household bills and living costs have been paid I can see why you’d want to consider other options like settlements.

Whether a creditor will accept a settlement is completely up to them but you can certainly make an offer, the worst they can do is say no. You can find a link to advice on offering a full and final settlement here.

A settlement will show a partial settlement on a credit file but all notes on credit files generally drop off after 6 years.

If you decide to take this route and the creditor refuses or you’d just like to look at alternative options then you can contact StepChange for free and impartial debt advice.

I’d certainly suggest looking at an alternative option because the time frame for paying back the rest of the mortgage shortfall at £100 a month isn’t really realistic.

Take care
Rachael

J_haines25 wrote: »

Hi

When my partner was 19 and his friend were 18 they took out a joint mortgage on a house. The friend lost his job but hid it from my partner and stopped paying his half of the mortgage. Letters about reposession came but again the friend hid them. They eventually lost the house and were left with a massive £75000 shortfall. My Partner has been paying £100 a month over the past 5 or 6 years towards this. No idea what the friend is paying (if anything). Over ten years down the line the debt (which is now ££67260) has now been passed to Moorcroft Debt recovery. I've read a lot of horrible things about them and am really unsure how to proceed. We have thought about offering £10000 upfront as full and final settlement but I have no idea how likely they would be to accept this.

Any advice would be great.

thanks

Spoony8 · 10 May 2018 at 4:42PM

Hi Rachel,

Thanks for your reply, i will give you guys a call at the weekend when i return home.

Many Thanks

Spoony

MURPHY29 · 15 May 2018 at 11:22AM

Hello,
I am trying to get prepared with a new bank account probably Yorkshire Bank (I need to choose an unlinked account to my debts) before I take steps to sort my debt going forward.
My question is, I have credit card debt with MBNA and a joint bank account with a family member with Virgin Money - are they connected ?
My name was only put on my mother's existing Virgin money current account this year, as a joint name to assist my mother if need be, I don't use it.
I think I have had statements in the past around 2011 from Virgin Money / bank of America before they became MBNA with the same credit card account number .

If I defaulted on my MBNA card would they go after my mother's account ?
thank you in advance

StepChange_Kirsty · 15 May 2018 at 1:43PM

Hi there,

Thanks for your post.

In order for banks to use the right of set off they must be registered as the same bank. MBNA credit cards are provided by MBNA Limited and Virgin current accounts are provided by Virgin Money PLC authorised by the Prudential Regulation authority. They also have different registered offices so it would not appear they are registered as the same bank.

The Financial Conduct Authority (FCA) have said that banks should not use the right of set off between products with the same bank that have different trading names if it is not clear to the customer that they are the same firm. You should therefore double check the terms and conditions on the Virgin current account just to make sure there is no clause which says they can set off funds to MBNA products.

I hope this helps.

Kirsty

MURPHY29 wrote: »

Hello,
I am trying to get prepared with a new bank account probably Yorkshire Bank (I need to choose an unlinked account to my debts) before I take steps to sort my debt going forward.
My question is, I have credit card debt with MBNA and a joint bank account with a family member with Virgin Money - are they connected ?
My name was only put on my mother's existing Virgin money current account this year, as a joint name to assist my mother if need be, I don't use it.
I think I have had statements in the past around 2011 from Virgin Money / bank of America before they became MBNA with the same credit card account number .

If I defaulted on my MBNA card would they go after my mother's account ?
thank you in advance

MURPHY29 · 18 May 2018 at 1:56PM

StepChange_Kirsty wrote: »

Hi there,

Thanks for your post.

In order for banks to use the right of set off they must be registered as the same bank. MBNA credit cards are provided by MBNA Limited and Virgin current accounts are provided by Virgin Money PLC authorised by the Prudential Regulation authority. They also have different registered offices so it would not appear they are registered as the same bank.

The Financial Conduct Authority (FCA) have said that banks should not use the right of set off between products with the same bank that have different trading names if it is not clear to the customer that they are the same firm. You should therefore double check the terms and conditions on the Virgin current account just to make sure there is no clause which says they can set off funds to MBNA products.

I hope this helps.

Kirsty

Yes thank you Kirsty, that does help.
I also had my name removed from a joint saver account with a bank that I have other credit with, the saver is made up of 5 friends all sending a monthly amount of £20 and is drawn out every xmas. Do you think removing my name was enough it was joint as myself and one other friend.
I really would hate any come back on the friends that save in that account,
thank you again

Former_StepChange_Linsi · 21 May 2018 at 2:58PM

Hi

Thanks for your post.

A bank shouldn't be able to use the right of set off if you are no longer named on the joint savings account. If you're still worried I'd recommend checking the terms and conditions with the bank in question.

All the best,

Linsi

MURPHY29 wrote: »

Yes thank you Kirsty, that does help.
I also had my name removed from a joint saver account with a bank that I have other credit with, the saver is made up of 5 friends all sending a monthly amount of £20 and is drawn out every xmas. Do you think removing my name was enough it was joint as myself and one other friend.
I really would hate any come back on the friends that save in that account,
thank you again

evans3l · 28 May 2018 at 5:43PM

Good Afternoon

I’d like some advice on the best way to cut my debt please?

I’ll be honest, I haven’t been the most responsible spender over the last few years but after having my daughters last year, it’s given me a new perspective so I’m now determined to stop the spending, cut up my credit cards and pay off the debt I owe and become debt free!

I’ve worked out that in total I owe £15,637.45 with monthly repayments totalling £779.79. I’m considering a consolation loan if I can get the repayment cheaper than what I am currently paying but my credit isn’t great so I doubt I’d get a good deal. All advice greatly appreciated.

Thanks

Former_StepChange_Linsi · 29 May 2018 at 8:41AM

Good morning,

Thanks for your post and welcome to the forum.

It’s great to hear you’re taking steps to tackle your debts and this is certainly something we can help with.

Consolidation loans look good on paper but often involve higher interest rates so you end up paying more back in the long run. We don’t give advice specifically about consolidation loans but if this is something you want to consider I’d recommend speaking to the Money Advice Service.

The advice and solutions we recommend involve managing existing debts without relying on additional credit. You can find more general information about the solutions we advise on our website.

For more tailored advice you can create a budget online using our anonymous Debt Remedy tool. At the end of Debt Remedy you’ll have access to a personal action plan which explains the solutions available to you and the next steps to take. Here’s the link for Debt Remedy.

I hope this helps,

Linsi

evans3l wrote: »

Good Afternoon

I’d like some advice on the best way to cut my debt please?

I’ll be honest, I haven’t been the most responsible spender over the last few years but after having my daughters last year, it’s given me a new perspective so I’m now determined to stop the spending, cut up my credit cards and pay off the debt I owe and become debt free!

I’ve worked out that in total I owe £15,637.45 with monthly repayments totalling £779.79. I’m considering a consolation loan if I can get the repayment cheaper than what I am currently paying but my credit isn’t great so I doubt I’d get a good deal. All advice greatly appreciated.

Thanks

rio2010 · 1 June 2018 at 4:29PM

Hi,

New to this and just looking for some advice.

I owe about £1000 to my local council for last years council tax. I have had Rundles and co post a letter through the door demanding full payment. I have recently become unemployed and i am currently in the process of signing on for universal credit. No idea how much i will get. Rent £550pm and other bills slipping due to no money coming in (i live alone).

I rang the enforcement agent to explain i had lost my job and didn't know how much universal credit payment i would get. His fairly short response was 'nothing i can do, full payment needs to be made. I can give you an extra week'. Then yesterday i got a text saying pay in full by 1pm today or our enforcement team will attend to remove goods at or after 2pm.

I've done a bit of research and the general opinion is don't deal with them, don't let them in and contact the council. Is this correct and how do i go about agreeing a realistic repayment directly with the council.

As an extra worry i also have Bristow & Sutor posting enforcement notices for a different council from a couple of years ago (£1500) :-(

Any suggestions would be much appreciated.

Struggling with debt? Ask a debt adviser a question

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