Struggling with debt? Ask a debt adviser a question

StepChange_Allen · 21 November 2017 at 10:09AM

stepha4 wrote: »

Hi,

I’ll be as brief as possible whilst adding as much info as I can.

Myself and my husband have 2 children, youngest 8 months (I’m on maternity leave), own our house and he’s in full time employment and I’m part time once I go back.

We have substantial debts and I don’t know which way to go about sorting them out...! I can’t work any more hours as childcare would eradicate most of my wage and there’s no family available that can care for them for free. We don’t get any benefits or free childcare hours as my husband earns £32,000 a year.

I have done a budget planner and it leaves us with £98 cash a month once everything is paid...insurance, tax, mortgage, water, electricity & gas & our debts. We are not behind on any payments at all but am fast realising we soon will be if we don’t sort something ASAP!

We currently pay £985 a month on all our minimum payments and loan our debt is 40k (not including mortgage)

From the above (knowing very little about options) would anything jump out at you with what we should do? Are we too far gone to sort it?

Thankyou in advance, this feels like a very big muddle which I don’t know how to sort. I am on medication for anxiety and this is having a very negative affect on it.

Thanks again 🙂

Hi there

Welcome to the forum and thanks for posting.

I can appreciate being in financial difficulty can make anxiety worse, but I can reassure you that it's never too late to get help or get things sorted out with debts.

At StepChange we're able to make recommendations and explain all available options to someone once we have full details of their income, spending and debts. Without those details we can only really talk generally about things so it'll help if we can speak with you.

You can either call our Helpline free on 0800 138 1111 to get started, or use our anonymous online Debt Remedy tool here: www.stepchange.org/DebtRemedy

I hope this is useful and we look forward to helping you.

Allen

blanchedubois1992 · 24 November 2017 at 5:33PM

Hi there,

I am looking for advice: I have an old student overdraft debt that was passed onto arrow global - they are writing to me asking for £1600. I ignored it for a while then I called them myself and abused them down the phone just saying things like 'I bet you were bullied at school' and 'your parents must be really proud of you' - it worked pretty well because they never call me anymore, I guess I must have struck a nerve with my personal debt collector Julie and she just dreads picking up the phone to call me knowing that I will bully her.

So my issue is...what happens now? What will realistically happen if I just ignore this? Will they bother going to court for this meagre sum? DO THEY HAVE TO NOTIFY ME AND WRITE TO ME BEFORE IT GOES TO COURT?? I really want to apply for a mortgage next year so I don't want the situation to get dramatically worse, also don't want to end up paying more than necessary so when the time comes I was thinking I might settle with them and try to do that for about 700 quid. It's been over a month and I've not received any more letters or calls...what do you think is going on?

Many thanks

igaveupnowimback · 26 November 2017 at 12:09PM

Hello, am couple years into DMP gone well so far. Bank Credit Card now say writing off debt and closing account. This is a substantial amount which would more than halve my total dmp, but although they don't mention this I suspect this is a precursor to selling to DCA and starting court proceedings due to amount. Can anyone advise please I am desperate to avoid court or dealing with escalation to DCA. (Scotland). Also when check SC statement online this debt is listed with 'opening new account' can you please tell me what that means, thank you.

StepChange_Rachael · 27 November 2017 at 9:52AM

Hi

Welcome to the forum.

I’m not quite sure how to respond to the first paragraph. If you felt this was the right way to react due to receiving similar language from Arrow Global then I’d suggest making a formal complaint so it can be looked into. They should have a formal complaints route that you can follow on their website.

Creditors are quite likely to take further action such as court action to set a CCJ against the debt if they can’t make an informal arrangement. This means they can look to take further action to collect for the debt if a payment arrangement isn’t maintained. This further action can be enforcement agents or attachment of earnings, for the full sum plus court costs.

The creditor will inform you if they’re looking to take the debt to court. This is called the letter of claim and gives the debtor (yourself) 30 days to respond and come to an agreement with the creditor before they take this further action.

A CCJ will have a greater impact on your credit file. However, you might find outstanding debts and defaults from the creditors have already had a negative impact on your credit file which could affect getting a mortgage.

You can check your credit file through Noddle, ClearScore or Experian. Please check individual website for charges.

If you’d like to explore your options with finding a suitable debt solution you can find StepChanges contact details here.

Thanks
Rachael

blanchedubois1992 wrote: »

Hi there,

I am looking for advice: I have an old student overdraft debt that was passed onto arrow global - they are writing to me asking for £1600. I ignored it for a while then I called them myself and abused them down the phone just saying things like 'I bet you were bullied at school' and 'your parents must be really proud of you' - it worked pretty well because they never call me anymore, I guess I must have struck a nerve with my personal debt collector Julie and she just dreads picking up the phone to call me knowing that I will bully her.

So my issue is...what happens now? What will realistically happen if I just ignore this? Will they bother going to court for this meagre sum? DO THEY HAVE TO NOTIFY ME AND WRITE TO ME BEFORE IT GOES TO COURT?? I really want to apply for a mortgage next year so I don't want the situation to get dramatically worse, also don't want to end up paying more than necessary so when the time comes I was thinking I might settle with them and try to do that for about 700 quid. It's been over a month and I've not received any more letters or calls...what do you think is going on?

Many thanks

StepChange_Rachael · 27 November 2017 at 10:33AM

Hi

Thanks for your post.

If a creditor was going to pass a debt on to a collections agency I wouldn’t expect them to send a letter stating that they’re writing off the debt. I’d suggest contacting the creditor and asking what they intend to do with the account. It’s unusual that a creditor would write off debt so if this is the case I’d suggest asking for confirmation of this and to confirm in writing the debt won’t be sold on and that your credit file will be marked as full and finally settled for this debt.

You could also contact the organisation/company dealing with your DMP and discuss this with them. You’ve mentioned ‘SC statement’ in your response. If this means your DMP is with StepChange I’d suggest speaking with the department dealing with the plan. You can find our contact details here.

A debt going to a collections agency and a debt going to court are very different routes of collection. It’s more likely a creditor will pass the debt to a collections agency than take a debt to court when you’re in a DMP.

Thanks
Rachael

igaveupnowimback wrote: »

Hello, am couple years into DMP gone well so far. Bank Credit Card now say writing off debt and closing account. This is a substantial amount which would more than halve my total dmp, but although they don't mention this I suspect this is a precursor to selling to DCA and starting court proceedings due to amount. Can anyone advise please I am desperate to avoid court or dealing with escalation to DCA. (Scotland). Also when check SC statement online this debt is listed with 'opening new account' can you please tell me what that means, thank you.

weezypops · 27 November 2017 at 12:49PM

Hi,

I'm looking for some advice as to our best next steps.

We have got ourselves into more debt than we can handle. My husband earns a good wage and I am self-employed so I know we are in a better situation than many but paying off debts each month is killing us.

We currently have an overdraft of £5k and three credit cards totalling about £30k, plus a loan we are paying off £300ish a month. The total we're paying out a month on repayments is about £1k. Then we also have a mortgage which we pay £750 a month on.

We own a third share in my husband's grandad's old house and are in the process of selling some of that to his dad, which should give us £20k. We plan to use this to pay two of the cards off totally.

The largest of the cards (£12k) was interest free but we missed one payment over the summer and lost that benefit so are now paying interest on that one too.

I was just wondering if someone can advise as to what is our best route out of debt. We are tackling our spending, and obviously the £20k is going to make a big dent. Would we be better applying for another 0% card and moving over what is left, or is there a better way of clearing what is left?

igaveupnowimback · 27 November 2017 at 2:55PM

Hi Rachael, thanks. Called bank they at first said no, still balance on account but then said re letter that this was indeed the case and it would not be passed on anywhere, they were dealing with it themselves, and it would not affect my credit rating, (letter had stated that it will be removed from credit registers within 6 weeks). Why would they do this I wonder if it was perhaps an unenforceable account ? I didnt ask for comfirmation aside from letter I have, I could do this over next few weeks if see it removed from CRA records. Thank you.

StepChange_Rachael wrote: »

Hi

Thanks for your post.

If a creditor was going to pass a debt on to a collections agency I wouldn’t expect them to send a letter stating that they’re writing off the debt. I’d suggest contacting the creditor and asking what they intend to do with the account. It’s unusual that a creditor would write off debt so if this is the case I’d suggest asking for confirmation of this and to confirm in writing the debt won’t be sold on and that your credit file will be marked as full and finally settled for this debt.

You could also contact the organisation/company dealing with your DMP and discuss this with them. You’ve mentioned ‘SC statement’ in your response. If this means your DMP is with StepChange I’d suggest speaking with the department dealing with the plan. You can find our contact details here.

A debt going to a collections agency and a debt going to court are very different routes of collection. It’s more likely a creditor will pass the debt to a collections agency than take a debt to court when you’re in a DMP.

Thanks
Rachael

Ansari27 · 27 November 2017 at 4:34PM

Hi! I am looking for advice based on my situation.

I am currently looking after my father who was taken unwell a few months ago. He struggles with his health and completing tasks etc. I was previously working but had to quit my job and move back into my parents home to look after him.

Due to this I literally have no income and we live off my mothers wage and my dads pension. My mother is not the greatest when it comes to English etc and does not drive so she would struggle to look after my dad. I am the only person who is capable of looking after him.

I have approximately £4,000 of debt that I struggled to keep repayments on and therefore they are starting to come calling.

What options would I have available to me regarding this? I do not expect my fathers situation to change for the next year or 2 and therefore would find it very difficult to get back into work until this.

Any advice would be greatly appreciated.

Juggy1980 · 27 November 2017 at 9:33PM

Hi. I have 15,000 worth of debt (cc's mainly and a personal loan). I have a very secure income but my credit is poor. I've applied for personal loans with my bank and others but been refused. My main concern is the huge interest i pay and will i still be paying of in 15 yrs +. If (dream scenario) i could consolidate i could easily make the repayments and i'd prob be paying out less each month. My monthly debt amount is 500 and nearly half is interest!
All help/advice would be gratefully received.

StepChange_Allen · 28 November 2017 at 10:34AM

weezypops wrote: »

Hi,

I'm looking for some advice as to our best next steps.

We have got ourselves into more debt than we can handle. My husband earns a good wage and I am self-employed so I know we are in a better situation than many but paying off debts each month is killing us.

We currently have an overdraft of £5k and three credit cards totalling about £30k, plus a loan we are paying off £300ish a month. The total we're paying out a month on repayments is about £1k. Then we also have a mortgage which we pay £750 a month on.

We own a third share in my husband's grandad's old house and are in the process of selling some of that to his dad, which should give us £20k. We plan to use this to pay two of the cards off totally.

The largest of the cards (£12k) was interest free but we missed one payment over the summer and lost that benefit so are now paying interest on that one too.

I was just wondering if someone can advise as to what is our best route out of debt. We are tackling our spending, and obviously the £20k is going to make a big dent. Would we be better applying for another 0% card and moving over what is left, or is there a better way of clearing what is left?

Hi there

Thanks for posting.

There's a number of different options that could work for you, but it's hard to say what's best without knowing your situation in detail. I make it that you'll still have £15,000 plus the loan left after you use that £20,000, so it depends whether you can comfortably afford the repayments after that?

I don't know what your credit ratings and affordability are like, so whether taking out more credit, either 0% cards or a low interest loan, would work for you, I can't say. You can find more information on these things on the main MSE site under the 'cards and loans' tab. Do be careful about borrowing more money to pay off existing debt.

If you'd like some tailored debt advice for your situation, accounting for your income, spending and debts, please contact Business Debtline for advice. Because you're self-employed, we advise to contact them; we no longer advise self-employed people. Their website is: www.businessdebtline.org/

I hope this is helpful.

Allen

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