Struggling with debt? Ask a stepchange debt adviser a question

Jamsam28 · 5 November 2019 at 6:41PM

I just feel as if there is no hope anymore. In the past 2 years, I've accumulated what I can officially call "debt" of £8000. I've been able to keep up with payments by getting myself trapped in the loop of borrowing, with having little money left because of impulsive buying and stupidity. It has only been recently when my financial situation has become a reality, I'm currently in university and moved into a privately rented place with my partner. I'm now a month behind on all loan repayments, credit cards, overdrafts, and rent. I've tried to get big loans to consolidate it into one small payment, but this month has impacted my credit score quite badly and now I and my partner are in financial hardship as we are unable to pay bills for the foreseeable future and buy food. I don't know what steps to take, I find it so hard to talk to people on the phone, I'm so embarrassed about our situation.

StepChange_Rachael · 6 November 2019 at 10:48AM

Hi

Thanks for messaging.

If you’re on a plan with us, we’d include all your debts in this plan as it’s the most sustainable way to become debt free. As we advise on all debt solutions, leaving debts out can impact our recommended solutions. If you have some debts not included in your plan with us, then I’d recommend contacting us and our client support team who can help make sure we’ve included all your debts in a plan.

The creditors would default a debt once the contractual payments have been missed, it sounds like the only reason they’ve advised you not to miss payments, resulting in a default, is because you’re currently up to date and it’s not in their interest to recommend you miss your contractual agreement with them.

From what you’ve mentioned, it’s unlikely it will have much of a further impact on your credit file if you default on these, as you’ve already mentioned it’s very low. Credit files can be improved overtime. Once you default, it does mean creditors are open to follow the collections process, however, as you’ve probably already realised; as some of your debts are in a plan, it’s less likely they would if they are receiving a regular affordable payment.

I hope this helps.

Thanks
Rachael

ditty1234 wrote: »

Hi SC I have just made my 6th payment to my creditors through StepChange. It is a large debt and very small payments, so in it for the long term. 3 Credit cards are defaulted - so basically on plan.
The question is about a balance left from an overdraft and the rest of a loan both with HSBC and each about £900. Just called HSBC collections who is now taking care of it, and they thought that defaulting the two balances was the worst idea ever. Because I now pay every month they are happy - do I have to write them to get them to default the loan and overdraft balance?
Both are just sitting there without interest, so I'm not unhappy, but I don't like having some things defaulted and some not. At the moment my credit score is about as low as it can go anyways, and the loan is showing with missed payments anyways - so why the difference?

StepChange_Kirsty · 6 November 2019 at 1:19PM

Hello,

Thanks for your message.

It sounds like you would benefit from having some debt advice where we can look at your full situation. At StepChange we can provide you with free and confidential help and advice.

In order for us to offer you the best advice and further guidance we would need to know a little bit more about your current financial situation by going through a budget with you. In the budget we’d look at your income, monthly spending on household bills and living costs and any debts you have outstanding at the moment. This will give us a clearer understanding of your finances and allow us to find you an affordable solution.

There are two ways you can get started and we’re here to support you with whichever you choose:

• Firstly, you can use the Debt Remedy tool within our website. This is an anonymous, self-help tool which will guide you through the process of putting a budget together in your own time and will recommend the right solution for your situation.

• Alternatively, if you would prefer to speak to us over the phone, you can call and have a debt advice session with one of our specialist advisors. We are open from 8am to 8pm Monday to Friday and 8am to 4pm on Saturdays. Calls are free from all landlines and major mobile phone networks. You can find our contact details here.

We hope to hear from you soon.

Kirsty

piprush74 wrote: »

Hi
I hope someone can help.
My situation is currently this:
I have an NRAM loan (125% together mortgage) with my ex husband of £26000 (estimated) which we pay half of each (there are occasions where he doesn't pay!) with 20 odd years to run.
I owe a total of £3500 to Halifax and Barclaycard - I called these and they have put me on a no pay arrangements ( I don't really understand what this means - but I haven't heard from them in many months)
I owe Simply Be £1400 and have a payment arrangement with Cabot to repay this.
I owe Very £1300 and pay this monthly at the minimum amount
I owe Aqua £450 and again pay the minimum amount monthly.

I am in a new relationship and there has been talk of buying a house together in the future. I know at the moment I will not be able to be accepted for a mortgage. I am looking for advice as to what would be my best move towards becoming debt free? Any help and support welcomed.
Thank you.

StepChange_Kirsty · 6 November 2019 at 1:39PM

Hello,

Thanks for your post and welcome to the forum.

I’m sorry to hear about the difficulties you’re experiencing with debt at the moment. I can appreciate that studying can cause extra financial pressure.

There are definitely solutions to help with the outstanding debts, but we’d need to know more information about yours and your partners financial situation in order to give you our best advice.

If you don’t feel comfortable speaking over the phone, we do have an anonymous Debt Remedy tool where you can fill in your budget and get your advice online. You can find Debt Remedy here.

You may need to speak to one of our debt advisors at some point but there is no need to feel embarrassed when you talk to us. Debt’s can happen for all sorts of reasons and I can promise that no one at StepChange will judge you.

I hope this helps.

Kirsty

Jamsam28 wrote: »

I just feel as if there is no hope anymore. In the past 2 years, I've accumulated what I can officially call "debt" of £8000. I've been able to keep up with payments by getting myself trapped in the loop of borrowing, with having little money left because of impulsive buying and stupidity. It has only been recently when my financial situation has become a reality, I'm currently in university and moved into a privately rented place with my partner. I'm now a month behind on all loan repayments, credit cards, overdrafts, and rent. I've tried to get big loans to consolidate it into one small payment, but this month has impacted my credit score quite badly and now I and my partner are in financial hardship as we are unable to pay bills for the foreseeable future and buy food. I don't know what steps to take, I find it so hard to talk to people on the phone, I'm so embarrassed about our situation.

Naomim · 10 November 2019 at 8:16PM

Hi,

My husband and I have a joint mortgage and an overdraft of £4,650 which we may out every month.

I have approx £30k of credit card debt. Some of it is on 0% interest but I have no more avenues of low interest once these finish.

My husband cant understand why we are always hitting the end of the overdraft. Our car needs service & MOT but we cant afford it. I cant even afford new trainers for my teenage son and I'm losing sleep over the debts.

I'm thinking of going on a dmp but I'd like to keep my husband out of it. Can I do it on my own and will it affect our mortgage?

Thank you.

sourcrates · 12 November 2019 at 12:22AM

Hi,

This thread is exclusively for contacting a stepchange debt advisor only.
Please, any other posters, do not respond to posts on here, and only post on this thread if you want specific debt advice from a stepchange debt advisor, if you want general forum opinion on your debts, then start a new thread in the main forum below.

Thank you.

terisc87 · 12 November 2019 at 7:27PM

So first of all... yes I know I am an idiot

I have a DMP with stepchange and because I didn't face the psychological reasons for my spending at the time I got more loans out whilst on plan and didn't include certain things in thinking my overtime may cover it.

Well my overtime has stopped and I have faced facts but I am scared but I am struggling to make ends meet and don't know what to say to stepchange?

StepChange_Allen · 13 November 2019 at 9:35AM

Naomim wrote: »

Hi,

My husband and I have a joint mortgage and an overdraft of £4,650 which we may out every month.

I have approx £30k of credit card debt. Some of it is on 0% interest but I have no more avenues of low interest once these finish.

My husband cant understand why we are always hitting the end of the overdraft. Our car needs service & MOT but we cant afford it. I cant even afford new trainers for my teenage son and I'm losing sleep over the debts.

I'm thinking of going on a dmp but I'd like to keep my husband out of it. Can I do it on my own and will it affect our mortgage?

Thank you.

Hello there

Thanks for posting.

I'm sorry to hear that things are a struggle at the moment. It certainly sounds as though you need some debt advice as soon as possible, in order to establish the best way of getting things under control.

You can get advice on your own yes, however, if your husband has any debts as well as the joint overdraft, it's highly likely that it'd be best if you get advice together. The fact that as a household you're struggling to pay for things like car servicing and essential footwear is of course a concern, and these things need to be prioritised.

In regards to the mortgage, a debt management plan (DMP) doesn't affect it directly; as long as you keep paying the mortgage, the house will be fine. However, any debt solution affects your credit rating as you're no longer meeting your contractual payments, and this can affect future re-mortgages, for example potentially in the rates you're offered. There's no hard and fast rule on this, but it's certainly a possibility.

You can register with us free of charge either on the phone or online, please visit our website for more details: www.stepchange.org/contact-us

I hope this is helpful.

Allen

StepChange_Allen · 13 November 2019 at 9:58AM

iamwilllavery wrote: »

I'm new. I am not really sure if this is in the right section but hopefully you can help. I am not too sure how bad my debt really is.
I have £16000 on credit cards all 3 of which are 0% and have between 18 and 24 months left. The vast majority of that was spent on our house e.g. kitchen, bathroom, flooring...
I have £9000 approx left on a personal loan with Tesco and the final payment is in May 2021.
We are mortgage free.

My gross income is £35200
My wife's gross income is £21000

Between us we roughly have £1000 disposable income per month and I was thinking of taking out a car loan for around £11500 at 7.9% APR which would bring our disposable income down to around £720-£750. Am I crazy in taking out another loan and my debts are pretty bad or am I managing ok? I have never missed a payment on anything so far.

At times I feel like I am managing well and other times I feel like I am doing ok...I need some assurance or a reality check.

Hi there

Welcome to the forum and thanks for posting.

Although we mainly deal with debt solutions, budgeting is part of that. I'll just offer a few thoughts for you to ponder, but I can't advise whether you should or shouldn't go for the car loan.

As a word of caution, as a debt advisor, I obviously see a lot of people with a lot of debt that has grown and become unmanageable. So the first question perhaps, is, do you really need the car loan? If you do, fine, if you don't, can you buy something cheaper and save the money, or perhaps pay your other debts off quicker?

Can you currently pay your 0% cards off before the interest free periods end? If you can't, then of course the payments will jump up when the deals end, and make things tighter (plus costing you money). If you can clear them in the 0% period, can you still if you get this car loan?

I'm on a huge expert on current loan rates, but 7.9% sounds quite high to me, so be sure to check how much you'll end up paying back, and if there are any other deals out there. If you don want or need a loan, it could be worth checking the eligibility calculator on the MSE site: www.moneysavingexpert.com/eligibility/loans-calculator/search/

A final tip would be to put together a budget, if you haven't already, as this may help you to get a clearer picture about your overall financial position.

I hope this is helpful.

Allen

movingtimes · 13 November 2019 at 5:43PM

Unsure if in right place but have a basic question regarding my credit cards. I have four credit cards,all on 0% interest, total balance on all of these is around the £10k mark. I also have company shares that total well above the £10k mark. Is it considered best practice to sell the shares to clear the debt or is this OK whilst I'm on 0% on the cards?

Struggling with debt? Ask a stepchange debt adviser a question

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