Struggling with debt? Ask a debt adviser a question

LilyRose08 · 12 April 2018 at 10:38AM

Hi all,

I am on the road to rebuilding my credit and for the past 14 months my credit score has continued to improve slowly but surely. Now I am in a better financial position due to a better income I have been thinking about paying off the one or two debts that I have been in default from for years. However, I'm a bit cautious about doing so. Will paying these debts off (that are not currently on my credit file) set my credit score back negatively as they will now show up on my credit file?

Any advice would be appreciated. Thanks

gillybean127 · 12 April 2018 at 2:58PM

Hi. I've never had a credit card before, but have run up some debt with my Next and Very catalogues. Should I carry on paying the catalogues monthly or would I be better off trying to get a credit card with 0% purchases, paying the catalogues off and then paying an amount of the card monthly instead?
For example, if I get a credit card with 0% purchases for 30 months, pay off the catalogues with this and then make payments off the card; is this a good way of managing the debt? Also, if I don't manage to pay off the full amount before the end of the 0% period, do I just apply for another card that has 0% balance transfers and then keep paying? Ideally, I'd like to have the whole amount paid off by then, but just in case.
Lastly, is £150-£200 a realistic amount to pay off monthly from the credit card? Having not had one before I'm not sure what to expect. I don't plan on using the card for anything other than this particular debt so won't be adding any amounts to it.
The card I'm looking at is with Santander, 0% purchases for 30 months then 15.9% after that. It also has a £3 monthly fee. Does that sound like a good one to go for? Sorry, I just really want to make sure that I get this right!!
Thank you.

StepChange_Kirsty · 13 April 2018 at 10:15AM

Hi there,

Thanks for your post and welcome to the forum.

In answer to both of your questions you can indeed get in touch with your creditors (both loans and credit cards) to ask them if you can make reduced payments whilst you’re struggling. You would need to create a budget showing your income, expenditure and list of debts and make an offer of repayment to send to them.

If you end up making payments which are less than your monthly contractual payments the creditors may issue a default notice and a default mark would be entered on your credit file for a period of six years. There is more information about default notices and their implications on our website here.

The main impact of a default mark on your credit file is that you may find it harder to obtain credit during this time but as you don’t want to continue to live on credit anyway this isn’t usually a big problem.

The best advice I could give in this situation is for you to get in touch with us at StepChange and we can look at what the best solutions would be for your individual circumstances. There are a couple of ways you can get in touch with us and we’ll be happy to help whichever you choose:

First you could use the Debt Remedy tool on our website. This is a self-help tool which will guide you through the process of putting a budget together in your own time and will offer you the best solution for your circumstances, using the following link: http://www.stepchange.org/debt-remedy.

Or if you would prefer to speak to us over the phone, you can call our Debt Advice team on 0800 138 1111 and have a debt advice session with one of our specialist advisors. We’re open 8am-8pm Monday to Friday and 8am-4pm on Saturdays. Calls are free from all landlines and major mobile phone networks. Either way we’ll be happy to help.

I hope this helps.

Kirsty
Digital Support Debt Advisor

Redrosies wrote: »

Myself and my husband have lived above our means for the last few years and have now hit bottom.

We have;

£30,320 - credit cards (822pm)
£20,000 - loan (436pm)

Our income has just lowered to £3200pm combined and with bills, Morgage and debt our out goings is £3000pm. We’ve sadly been using cc to get by but now we can’t use them and to be honest don’t want to live the way we have anymore.

We have two young children and parents with ill Health who can not know about our situation so bankruptcy (anything that makes us lose our home is a no no)

My husband works every bit of overtime possible and I’m just going back after maternity leave so will be picking up anything that I can. We have two cars which we both require for work.

My main questions are;

1. Could we ask our credit card companies if they could help us either by lowering monthly payments or freezing our interest? (Would this effect our rating much?

2. Our loan is with Sainsbury’s and has 2.5 years left. Could we ask them for lower payments or would this be not wise?

3. Any other suggestions greatly welcomed

StepChange_Kirsty · 13 April 2018 at 10:36AM

Hi Lily,

Thanks for your post and welcome to the forum.

If these debts defaulted a mark would’ve been entered on your credit file for a period of six years. Once the six years expire the default and all record of the debt will be removed from your credit file so even if you started to repay these debts now, they should not be put back on your credit file.

You may want to check if these debts are statute barred under The Limitations Act 1980 if you’ve not acknowledged the debts or paid anything towards them in the relevant timescale, usually six years. It's important to note though that if the debt is statute barred it does not mean that the debt is written of, simply that the debt cannot be enforced through the court.

On the other hand if you need advice as to an affordable amount to repay towards these debts you can use our online Debt Remedy tool which will take you through the process of putting a budget together and will show you how much disposable income you have available each month to pay.

There is also a very useful article on the main MSE website with information about how to improve your credit file which you can find here.

All the best.

Kirsty

LilyRose08 wrote: »

Hi all,

I am on the road to rebuilding my credit and for the past 14 months my credit score has continued to improve slowly but surely. Now I am in a better financial position due to a better income I have been thinking about paying off the one or two debts that I have been in default from for years. However, I'm a bit cautious about doing so. Will paying these debts off (that are not currently on my credit file) set my credit score back negatively as they will now show up on my credit file?

Any advice would be appreciated. Thanks

asm3k1 · 15 April 2018 at 10:28PM

Hi

My partners abusive ex-partner took a phone contract with Orange in her name without her permission five or six years ago, he also took all of her money because of this the bill was never paid. I think they have asked for the money but I'm not sure on the details. My partner moved in with me two years ago, about six months ago a debt collector sent a letter to my address for this money. We contacted Orange and explained the situation and they have only sent her to contact companies to advise on how to manage her debt. She has no income because she does not work and looks after our family. I could pay for the bill but I don't really know if it makes sense, I also do not know if there are other debts caused by her ex-partner. We have not heard anything else from the debt collector.

StepChange_Kirsty · 17 April 2018 at 12:23PM

Hi there,

Thanks for your post and apologies for the delay in responding.

I’m afraid I cannot offer you any advice on whether taking out the credit card is a good deal. As a debt advice charity we do not specialise in giving advice on financial products.

If you were to take out a credit card to pay off the catalogues I would certainly recommend making sure you can pay off the credit card within the interest free period as there is no guarantee you’d be able to get another one. The credit card company would expect a minimum payment each month and this will depend on the balance outstanding.

I’m sorry we can’t be of further help at this time.

Kirsty

gillybean127 wrote: »

Hi. I've never had a credit card before, but have run up some debt with my Next and Very catalogues. Should I carry on paying the catalogues monthly or would I be better off trying to get a credit card with 0% purchases, paying the catalogues off and then paying an amount of the card monthly instead?
For example, if I get a credit card with 0% purchases for 30 months, pay off the catalogues with this and then make payments off the card; is this a good way of managing the debt? Also, if I don't manage to pay off the full amount before the end of the 0% period, do I just apply for another card that has 0% balance transfers and then keep paying? Ideally, I'd like to have the whole amount paid off by then, but just in case.
Lastly, is £150-£200 a realistic amount to pay off monthly from the credit card? Having not had one before I'm not sure what to expect. I don't plan on using the card for anything other than this particular debt so won't be adding any amounts to it.
The card I'm looking at is with Santander, 0% purchases for 30 months then 15.9% after that. It also has a £3 monthly fee. Does that sound like a good one to go for? Sorry, I just really want to make sure that I get this right!!
Thank you.

StepChange_Kirsty · 17 April 2018 at 12:45PM

Hi,

Thanks for your post, I’m sorry to hear about the difficulties your partner has had in the past.

If the contract was taken out in your partners name without her permission then I would recommend she contacts the fraud team at EE (Orange). They can then investigate this matter further for her.

You may need to follow the EE complaints process in order to get the matter resolved. You can find their complaints code of practice here.

All the best,

Kirsty

asm3k1 wrote: »

Hi

My partners abusive ex-partner took a phone contract with Orange in her name without her permission five or six years ago, he also took all of her money because of this the bill was never paid. I think they have asked for the money but I'm not sure on the details. My partner moved in with me two years ago, about six months ago a debt collector sent a letter to my address for this money. We contacted Orange and explained the situation and they have only sent her to contact companies to advise on how to manage her debt. She has no income because she does not work and looks after our family. I could pay for the bill but I don't really know if it makes sense, I also do not know if there are other debts caused by her ex-partner. We have not heard anything else from the debt collector.

AndyH_76 · 17 April 2018 at 12:49PM

I have been paying off a debt with Lowell via B2 Legal since December 2015 (paid £1400 with £1237.81 outstanding)
I also found out that I am being made redundant and as such I asked if there was a final payment they would accept as I know that in a couple of months, I will have to revisit what I pay and make reduced payments and therefore spread it over a number of extra years.
the advisor came back and said they would accept a final figure of £992.25 to which I replied that would be out of the question. I said I could afford £400 and that I would pay that at the end of may.
the advisor said they would ask their client. I recieved the below back today

"Our Client is prepared to a settlement of £990.25 in settlement of the Balance Due. This sum must be paid in full no later than 1 May 2018.

Once the discounted payment has been received on time, your debt under account number 147880793 will be marked as partially satisfied on your credit file. This will bring this matter to a close and the Principal Balance will no longer be pursued.

If payment is not received on time, this will represent a material breach of this Agreement and this Agreement will be terminated automatically without notice. At such time, the discount applied to the Principal Balance will no longer apply and the full amount of the debt will become due and owing, with credit being provided for any sums previously received. Our Client will then pursue the full amount of the debt."

I cannot pay the £990.25 but reading this, I find it an intimidating response and I am now worried they are looking to take me to court in order to get this.

As I stated to them, I havent missed a payment and back in 2015, the "client" was prepared to accept a one off £1000. help!!!!

FloFlo · 17 April 2018 at 8:43PM

Really worried, husband filled in stepchange review without telling me and has messed up the wages figures not sure how he's managed it but put in wrong figures and sent it. I only spotted it because they sent an email saying the amount would change - showing it going up by £771 a month. It won't allow me to change the review online, only by phoning and they are shut now - will they be able to change the figures if I phone them, so worried.

sourcrates · 17 April 2018 at 10:59PM

FloFlo wrote: »

Really worried, husband filled in stepchange review without telling me and has messed up the wages figures not sure how he's managed it but put in wrong figures and sent it. I only spotted it because they sent an email saying the amount would change - showing it going up by £771 a month. It won't allow me to change the review online, only by phoning and they are shut now - will they be able to change the figures if I phone them, so worried.

Dont panic, ring them in the morning and they will sort it out, it will not be a problem honestly!!!

Struggling with debt? Ask a debt adviser a question

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