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  • Thank you James.

    It does make it clearer, and just can't really ask my parents to contribute to our re-payments. It doesn't really seem fair. We put ourselves into this situation so I can't really expect them to be out of pocket. Would it be sensible to ask them to see if they could get us another loan to pay off the credit card? It is currently a minimum payment of £270 a month, would a loan be a bit cheaper? My Mum is 70 though so would this even be possible? She does have an excellent credit rating.

    Tina
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
    john10001 wrote: »
    [FONT=Arial, sans-serif]Hi James,[/FONT]

    [FONT=Arial, sans-serif]Thanks for thegreat advice in your reply to me here:http://forums.moneysavingexpert.com/showpost.php?p=57392313&postcount=73[/FONT]

    [FONT=Arial, sans-serif]Ireplied back to the bank concerned regarding the overdraft and theseare some of the points I reitterated:[/FONT]

    [FONT=Arial, sans-serif]1)They're sending correspondence to my old address where I no longerlive and I am not getting a lot of the statements and other lettersthey send me.[/FONT]
    [FONT=Arial, sans-serif]2)They're getting my name incorrect.[/FONT]
    [FONT=Arial, sans-serif]3)They haven't responded to any of the complaints I made or informed mewho their CEO is so I could take it higher.[/FONT]
    [FONT=Arial, sans-serif]4)They are making unrealistic demands when they have been informed thatI am in financial difficulties.[/FONT]
    [FONT=Arial, sans-serif]5)I have contacted them several times on coming to an agreement about arepayment solution but they have failed to read or respond to themand only keep sending the same letter factory template demands.[/FONT]
    [FONT=Arial, sans-serif]6)There has never been a minimum required payment amount on theaccount.[/FONT]
    [FONT=Arial, sans-serif]7)The fact that I have never paid the large sums they are only recentlyrequesting (in line with that banks financial troubles) into theaccount and have only ever paid up to £50 into the account everyfour weeks going back several years is proof to the contrary andimplies otherwise.[/FONT]

    [FONT=Arial, sans-serif]Unfortunately theynever replied to this letter again though I did receive another oneof their template letters from them which is dated a day before Isent the above letter so there may be some crossover, but I thinkthat they're unlikely to respond anyway.[/FONT]

    [FONT=Arial, sans-serif]The new letter Ireceived is a Final Demand letter and listing me as a debtor, thoughthey have got my name wrong again.[/FONT]

    [FONT=Arial, sans-serif]It says:[/FONT]
    [FONT=Arial, sans-serif]Despiteour previous communications concerning your debt, we have to datereceived no satisfactory response.[/FONT]
    [FONT=Arial, sans-serif]Wenow demand immediate repayment of (over £1200).[/FONT]
    [FONT=Arial, sans-serif]Italso states interest will be added on the same basis as presentlyapplies.[/FONT]
    [FONT=Arial, sans-serif]Itgoes on to say I have 18 days from the date of the letter to pay infull.[/FONT]
    [FONT=Arial, sans-serif]Actionmay be taken against you through debt collectors or solicitors if youfail to comply with this demand within 18 days of the date of thisletter. You may also be taken to court.[/FONT]
    [FONT=Arial, sans-serif]Itcontinues: As you have not made payments that are due to be paid,this information including your name and address will be given to thecredit reference agencies named below if we do not receive asatisfactory response from you.[/FONT]

    [FONT=Arial, sans-serif]I have previouslycontacted the Ombudsman about this but there wasn't much they coulddo and only referred me to the CAB or said I would need to phone thenumber of the bank to speak with their financial difficulties linewhich I'm not prepared to do, only to correspond in writing so thereis a written record of it.[/FONT]

    [FONT=Arial, sans-serif]I have only justgot this latest letter as it was sent to an old address where I nolonger live and there are only a few days left before the deadlinethey give in the letter.[/FONT]

    [FONT=Arial, sans-serif]I am thinking ofsending an offer for full an final settlement as an ex-gratia paymenttomorrow but for roughly 33% of the amount as that is all I canafford and would be able to raise.[/FONT]

    [FONT=Arial, sans-serif]Do you think thiswould be likely to be accepted or not?[/FONT]

    [FONT=Arial, sans-serif]If they don'taccept I think really my only option then would be an IVA for all mydebts which run close to £20k.[/FONT]

    [FONT=Arial, sans-serif]If it is acceptedthen it would make paying my others debts a little bit better.[/FONT]

    [FONT=Arial, sans-serif]I did go throughthe Stepchange tool last week I think it was and it recommended theIVA route for the size of my debts, my income and expenditure.[/FONT]

    [FONT=Arial, sans-serif]I am just wonderingwhether it is possible to tweek the allowances in the statement thatis made online using this tool before you eventually sign and agreeto this? For some of the questions it recommends certain amountswhich I never thought to include as outgoings which was quite helpfulbut other questions where it included amount that I simply don't haveas outgoings and others where it didn't include enough. E.g. I don'thave an outgoing for TV License as I don't watch or record televisionas it is broadcast, and even if I wished to I wouldn't as I am a TVLicense/BBC objector. Then on the question for hair cut/styling itonly does allowance for £12 but it costs me much more than this.[/FONT]

    [FONT=Arial, sans-serif]My expenses foroutgoings like food/drink, and similar things though are quite lowoverall.[/FONT]

    [FONT=Arial, sans-serif]Is the onlineprocess through Stepchange a fixed thing or can it be changed to reflect your costs moreprecisely in different categories before you agree to go ahead withan IVA? Can the statement be updated?[/FONT]

    [FONT=Arial, sans-serif]Thanks very muchfor your help,[/FONT]

    [FONT=Arial, sans-serif]John[/FONT]

    EDIT: Correction After re-checking it's actually a few days after the deadline they give in their letter.


    Hi John,

    Thanks for getting back in touch. It's never easy to predict how much a creditor will accept for a full and final settlement offer. Speaking in broad terms, I think it's quite hard to get a 33% offer accepted but I've spoken to people who've managed less over the years.

    It usually helps to send a copy of your income and expenditure budget to your creditors as part of the negotiations as this will show them how long they'll have to wait to get their money if they don't accept.

    The other thing to remember is that you shouldn't send any money until you have something in writing confirming the details. It's fine to negotiate over the phone but it should always be backed up in writing, just so you're covered if they ever try chasing you for the difference.

    I'm really pleased that you gave Debt Remedy a go, the budget is far from set in stone. If you go through with the IVA option your details will be passed through to our team, who'll get in touch with you and can make adjustments to your budget wherever they are needed.

    Even if you weren't to go through with the IVA you can still adjust the figures. You can often make changes yourself to the suggested ones within Debt Remedy. If there are any changes that the system won't allow you can call us up and we can adjust it from our end.

    All the best.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) 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

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Former_StepChange_Rachel
    Former_StepChange_Rachel Posts: 252 Organisation Representative
    kaydizz wrote: »
    Hello,

    I was just wondering how long it takes for a debt management plan to be set up from the time you receive a completed application pack.

    Also regarding income, are bonuses and overtime included in calculating your income or is it your basic salary. Concerned that creditors will want to include bonus and overtime and this is one of the reasons I have ended up in a mess ( along with being made redundant twice in the last four years) as bonus and overtime is not guaranteed and it has got to the stage where I am relying on credit and overtime and bonus to live on. I am up to date with payments at the moment but have been making minimum payments on around 20k of credit card debt for about 8 years but cannot continue like this as my income has dropped by 10k per year and bonus and overtime has dried up or is very inconsistent.

    I have completed the Debt Remedy online and it has recommended a DMP. Worried that if I apply for debt management plan that not all creditors will accept.

    Any help would be really appreciated

    Hi there kaydizz

    If you are recommended a DMP and return your paperwork to us as quickly as possible, we can usually get you up and running within a couple of weeks. During that time you will have the means to make your creditors aware of what you’re doing. They’re usually a lot more cooperative when they know you’ve come to us for advice.

    We don’t include bonuses or overtime in your budget as it’s not guaranteed (unless you know you’ll be doing overtime for a static period e.g. six months). If you wanted to pay your bonus into your DMP you are more than welcome to (and it is something we would recommend to get you out of debt a bit faster).

    Creditors tend to respond positively to free DMPs as it’s the most fair and realistic way to make consistent payments. Even if they rejected the plan, we would continue to pay them as that will show how proactive you’re being.

    Hope this helps

    Rachel


    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) 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

    If money worries are keeping you awake, read Paul's success story at [url="http://www.needtosleep.org]Need to Sleep[/url]

  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
    Tinam1982 wrote: »
    Thank you James.

    It does make it clearer, and just can't really ask my parents to contribute to our re-payments. It doesn't really seem fair. We put ourselves into this situation so I can't really expect them to be out of pocket. Would it be sensible to ask them to see if they could get us another loan to pay off the credit card? It is currently a minimum payment of £270 a month, would a loan be a bit cheaper? My Mum is 70 though so would this even be possible? She does have an excellent credit rating.

    Tina

    Hi Tina,

    We generally advise against consolidation loans as we speak to a lot of people who've taken them out and found they've made the situation worse.

    Whether this option would save you money would depend on the interest rate and timescale you took the debt out over. Quite often they can mean paying back more in the long run even when the annual interest rate is lower, because they are being stretched over a longer period.

    Kind regards

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) 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

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Riikkemp
    Riikkemp Posts: 1 Newbie
    edited 4 December 2012 at 12:40PM
    Hi,

    I need to sort out my finances and it's terrifying! I spoke to a representative of a debt management company yesterday and they recommended an IVA as the best option, but I would like to get some un-biased advise. Here is my financial situation laid out:

    Income pcm: salary £1370 after tax and rent from tenants in a property I own £640. I also pay about £100 pcm into a pension plan. This is deducted from my salary before tax.

    Outgoings pcm: £454 mortgage ('Together' combined mortgage and unsecured loan from Northern Rock), £1200 on rent, utilities and all other living expenses, £395 on credit card repayments

    Debt: £13K on three different credit cards (one with HUGE 29.9% interest rate!), £3K overdraft with my bank (maxed out at the end of each month), £9.5K unsecured loan as part of my mortgage. Total £25.5K

    At the moment I can just about pay the credit card monthly instalments but I want to be debt free one day (soon, dare I say?) and I just can't see how it's ever going to happen without some dramatic action. I have not been late or in arrears with any of my bills at any point (including mortgage, credit cards, etc) but have gone over my over draft 2 or 3 times in the past year and have incurred charges for this.

    So my question is - is an IVA the right choice for me, or should I look at something like DMP or just paying off the credit cards little by little, even if it will take about a hundred years?

    Thank you in advance!

    Best,
    Riikka
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
    Riikkemp wrote: »
    Hi,

    I need to sort out my finances and it's terrifying! I spoke to a representative of a debt management company yesterday and they recommended an IVA as the best option, but I would like to get some un-biased advise. Here is my financial situation laid out:

    Income pcm: salary £1370 after tax and rent from tenants in a property I own £640. I also pay about £100 pcm into a pension plan. This is deducted from my salary before tax.

    Outgoings pcm: £454 mortgage ('Together' combined mortgage and unsecured loan from Northern Rock), £1200 on rent, utilities and all other living expenses, £395 on credit card repayments

    Debt: £13K on three different credit cards (one with HUGE 29.9% interest rate!), £3K overdraft with my bank (maxed out at the end of each month), £9.5K unsecured loan as part of my mortgage. Total £25.5K

    At the moment I can just about pay the credit card monthly instalments but I want to be debt free one day (soon, dare I say?) and I just can't see how it's ever going to happen without some dramatic action. I have not been late or in arrears with any of my bills at any point (including mortgage, credit cards, etc) but have gone over my over draft 2 or 3 times in the past year and have incurred charges for this.

    So my question is - is an IVA the right choice for me, or should I look at something like DMP or just paying off the credit cards little by little, even if it will take about a hundred years?

    Thank you in advance!

    Best,
    Riikka

    Hi Riikka, welcome to the forum.

    You're right to be cautious before starting an IVA. They're a big commitment, so you want to make sure that it suits your finances.

    It's hard to say whether a DMP or IVA would suit your situation based on the information above. Neither one is better than the other, it's just a matter of looking at which one provides you with the best way to get debt free.

    We've a blogpost with more detail about the differences between these two debt solutions: http://moneyaware.co.uk/2011/07/12-differences-between-an-iva-and-a-dmp/.

    I would recommend getting a second opinion, we can help you with that. The first thing to do is visit our online debt advice service Debt Remedy (http://www.stepchange.org/msehelp) to help you find a solution to your debt problem quickly.

    Debt Remedy will assist you in completing a financial statement with information on your household, employment, income, expenditure and debts. From this the service will automatically determine your options.

    To help you fill in the form, it’s best to gather together information about:
    • Your income
    • Your expenditure
    • The creditors you owe money to

    You’ll receive a downloadable advice booklet providing a tailored solution for you based on your current circumstances and advice on ways you may be able to improve your situation.

    If you’re not confident with computers or would like to speak to an advisor then you’re welcome to ring our Helpline on 0800 138 1111 (free including from mobiles). We’re open Monday to Friday 8am - 8pm and Saturdays 9am – 3pm.

    If you phone us it may be possible to refer you directly to a counsellor for immediate advice. Alternatively, we will arrange for an appointment to be booked at a time convenient for you.

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) 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

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Looking for advice and pointers on what to expect if I went into a DMP?
    What hassle? Any tips? etc
    Thanks in advance.
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  • Frida
    Frida Posts: 6 Forumite
    Hi,

    Could someone provide a template or suggestion on how I should reply to this letter from DWP:

    I am writing in response to your recent enquiry about the Prescription and Limitation (Scotland) Act 1973 and when recovery of debts owed to the Department may be time barred.

    The Prescription and Limitation (Scotland) Act 1973 operates to extinguish a cause of action in Scotland 20 years after it arose or where 20 years has elapsed since it was last acknowledged or since effective recovery took place.

    Provided the 20 year period has not expired, all avenues of recovery remain open to the Department. So if a benefit is is payment from which a deduction can be made, e.g. Income Support, Jobseeker's Allowance, State Pension, those deductions can continue. We can, as appropriate, also recover a debt from the estate of a deceased person.

    The Act also does not prevent us from instructing any of our private sector partners to pursue repayment on our behalf.

    What happens next

    If benefit is in payment, deductions will continue to be taken until the debt is paid back.

    If no benefit is in payment, recovery action will continue until a suitable repayment is in place.

    If no payment is being made we:

    -will write periodically as a reminder of the debt; the law allows us to do this
    -may ask private debt collection agencies to recover the debt

    Ti make arrangements to pay back the amount owed please contact us. Our telephone number is at the top of this letter.

    My personal view on this matter [feel free to correct me if I am wrong] is that any alleged debt becomes barred after 5 years in Scotland [the alleged debt was a result of overpayment of benefits]. I do not believe they have the power to take this to court and they have no way to enforce this debt unless I'm in receipt of benefits or state pension.

    So far I written to them to state that I do not acknowledge the debt and that I believe it is statute barred.

    My intended next step is perhaps to write and ask them to provide proof that the debt actually exists. Would this be a wise move and if so does anyone have a template and some guidance on the matter.
  • StepChange_James
    StepChange_James Posts: 861 Organisation Representative
    I_will_win wrote: »
    Looking for advice and pointers on what to expect if I went into a DMP?
    What hassle? Any tips? etc
    Thanks in advance.

    Hi I will win,

    The experience of setting up a DMP can be very different from one person to the next. If you're doing a DMP with us at StepChange Debt Charity then we'll help you set up a budget, look at all the options and only recommend a DMP if it genuinely is a good way to sort out your debts.

    If we recommend a DMP we'll send you an advice pack for you to read over, if you're happy with everything you send us through proof of your debts (photocopies of bills), income (photocopies of payslips) and a signed agreement form giving us permission to contact your creditors about your payments.

    So there isn't much hassle with the paperwork and we'll usually aim to get your plan started at the start of the next month (provided you get your paperwork to us in time).

    The bit that's hard to predict is how your creditors will respond. Generally they are willing to accept payment offers and reduce or freeze interest but they are not guaranteed to do this.

    If any creditors don't agree with the payments we'll still send them the payments and they'll have to apply them to your account. They'll probably follow their collections process though, which involves letters and phone calls from them asking for more money. You can just tell them to speak to us if they've got a problem though.

    A good place to get an idea of the day to day experience of being on a DMP is the DMP Survival Thread, which is nearly always in the first page of two of this board. Also you can see our reviews from DMP clients on the review centre website (http://www.reviewcentre.com/reviews182278.html).

    I'm not sure what stage you're at of looking into DMPs but if you've not had advice from us yet you can get it online (http://www.stepchange.org/msehelp) or over the phone (http://www.stepchange.org/Contactus.aspx).

    Hope this helps.

    James
    I work as a debt advisor for StepChange Debt Charity (formerly CCCS) 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

    If money worries are keeping you awake, read Paul's success story at Need to Sleep

  • Hello,

    if you enter into a debt management plan when you have no arrears on your creditors accounts, are the creditors likely to take you to court or take further action to obtain a CCJ when your creditors accounts go into arrears when the debt management plan has been started
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