Struggling with debt? Ask a debt adviser a question

Cashback2017 · 30 June 2017 at 12:18AM

Hi, I have three credit cards totalling £25789.87(MBNA, Halifax, AA) and an overdraft with Nat West of £4500.

I am employed with earnings just shy of £40,000 last year. My income is commission based and I have not been bringing in as much as I am used to and June,s pay was especially low meaning I will fail to reach my minimum payments for July. I am a homeowner with equity that I could release although I would prefer to consolidate my debts to a fixed monthly payment but don't know what is best.

I am now stressing out about it because I feel I need to make a decision quickly to avoid defaulting on my payments. My experian credit score is 907.

Can you please advise me on what would be best for my situation.

Many thanks.

StepChange_Kirsty · 30 June 2017 at 12:30PM

Hi,

Thanks for your post and welcome to the forum.

If you feel you’re not going to meet your monthly payments in July I would suggest you get in contact with us as soon as possible as we’ll need further information to give you full advice.

As a debt advice charity we cannot provide advice about taking out further lending whether secured or unsecured. If you are thinking about taking about a secured loan you need to consider this very carefully. We would not generally advise replacing unsecured debt with secured debt as it would carry more severe consequences if you later could not meet repayments.

We can consider other ways the deal with the debts you have outstanding. The best way to access our service is through our online Debt Remedy tool where you can input details of your income, expenditure and creditors and from this we will give you advice in the form of a personal action plan. You can start Debt Remedy here.

Alternatively, if you would prefer to speak to an experienced Debt Advisor over the phone you can find our contact details here.

We hope to hear from you soon.

Kirsty

Cashback2017 wrote: »

Hi, I have three credit cards totalling £25789.87(MBNA, Halifax, AA) and an overdraft with Nat West of £4500.

I am employed with earnings just shy of £40,000 last year. My income is commission based and I have not been bringing in as much as I am used to and June,s pay was especially low meaning I will fail to reach my minimum payments for July. I am a homeowner with equity that I could release although I would prefer to consolidate my debts to a fixed monthly payment but don't know what is best.

I am now stressing out about it because I feel I need to make a decision quickly to avoid defaulting on my payments. My experian credit score is 907.

Can you please advise me on what would be best for my situation.

Many thanks.

Saints81 · 1 July 2017 at 5:06PM

Hi I am thinking of selling me house to clear debt.
Currently my mortgage is £86000
Unsecured debt 8 in total is £14000
I was self-employed for 12 years not earning a lot that is why the debt came about.
Don't have ccj but do have some of the debt on plans.
My wife and my credit score is low to poor.
So can not remortgage to consolidate debt.
I now have an employed job with good pay and regular overtime.
If we sell for £215000, take out £17000 for 1yr rent, cover fees of about £10000,
Bank £88000, in the year improve my credit score and then use this for a deposit on a new house. Good idea or bad?

BECKY2007 · 3 July 2017 at 11:49AM

Hi I need some advice. My husband and myself have entered into an IVA with a debt company. We started this back in January. we have done all the paperwork and they have told us they have agreed terms with the creditors but we have as yet not payed or signed anything. The letters had stopped from the creditors however these have now started again and obviously interest has been added. My husband phones them constantly, all he gets is other reps who tell him the original reps will phone him back and as yet have not.
What can we do?

StepChange_Rachael · 4 July 2017 at 11:10AM

Hi

Thanks for your post.

For some people using equity in their property for clearing debts and having a fresh start can be a good option. For some people the stress of outstanding debt can cause a real strain on their mental and physical self.

However, selling your property isn’t going to be the best decision for everyone and shouldn’t be a decision taken without serious consideration.

It’s a very personal decision and I’d suggest if you haven’t already, to consider all the eventualities and how these would impact you and your wife.

I’d suggest first of all looking into all your options to make sure you’ve explored all the possibilities before taking this decision.

You can use our Debt Remedy tool which is an anonymous online tool where you can find out what debt solutions would be suitable for your situation. At the end you’ll be able to read through the ins and outs of your options before making a decision going forward.

Thanks
Rachael

Saints81 wrote: »

Hi I am thinking of selling me house to clear debt.
Currently my mortgage is £86000
Unsecured debt 8 in total is £14000
I was self-employed for 12 years not earning a lot that is why the debt came about.
Don't have ccj but do have some of the debt on plans.
My wife and my credit score is low to poor.
So can not remortgage to consolidate debt.
I now have an employed job with good pay and regular overtime.
If we sell for £215000, take out £17000 for 1yr rent, cover fees of about £10000,
Bank £88000, in the year improve my credit score and then use this for a deposit on a new house. Good idea or bad?

bruana_brulee · 4 July 2017 at 11:19AM

Hi
I am looking for some help with our family debts.
My husband and I used to earn a fairly decent salary, but fell into the trap of paying for things on available credit through catalogues and credit cards.
His mental health has deteriorated over the past few years, leading to a suicide attempt last week. He is now in hospital receiving the care he needs.
His earnings have been sporadic over the last few years, but we are now officially down to a one earning household. I know that burying our head in the sand will not aid my husbands recovery, and I am really keen to face our debts head on, tackle them and look to a debt free future where we can finally own our own property and live within our means
I don't really know where to start though! I know I need to contact creditors, many of them wont speak to me where the account is in his sole name. I need to get a comprehensive list of everything we owe and how best to pay it. How do I find out what benefits, if any, we are entitled to? We have never claimed any sort of benefit before so I have no idea how to start. We have 2 cars on finance, one of which I will definitely sell. Where is the best place to sell a car to clear the finance?
So sorry for all of the questions. I am on my own dealing with this and being in a situation like this is completely new to me.
Thank you for your time

Jess

StepChange_Rachael · 4 July 2017 at 11:40AM

Hi Becky

Thanks for getting in contact.

I’m sorry to hear you’re having difficulties with this company.

You mentioned you’ve completed paperwork but not signed anything. As long as you’ve not signed anything then any agreement won’t be legally binding.

However as you’ve mentioned you’ve completed some paperwork but not specified what, I couldn’t say for sure.

I’d suggest checking back on any paperwork you’ve completed to check where you are in the process at the moment and to double check nothing has been signed. If you're still unsure then i'd suggest contacting the Insolvency Service to double check you’re not in a legally binding agreement.

The Insolvency Service should be able to let you know who the reputable IVA companies are. It’s important to check this before making any agreements and paying any fees.

As a debt advice charity we can give you a second opinion on the debt options that are open to you, if you’d like to, you can find a link to our anonymous Debt Remedy tool here.

Thanks
Rachael

BECKY2007 wrote: »

Hi I need some advice. My husband and myself have entered into an IVA with a debt company. We started this back in January. we have done all the paperwork and they have told us they have agreed terms with the creditors but we have as yet not payed or signed anything. The letters had stopped from the creditors however these have now started again and obviously interest has been added. My husband phones them constantly, all he gets is other reps who tell him the original reps will phone him back and as yet have not.
What can we do?

StepChange_Rachael · 6 July 2017 at 9:33AM

Hi Jess

Thanks for getting in contact.

I’m sorry to hear you and your family are going through such a difficult time at the moment. I’m glad to hear that your husband has been able to get the help he needs and hopefully he’ll recover soon.

There's certainly help available for you going forward to find a solution in tackling the problem debt.

There are many different debt solutions available available to tackle problem debt, to make sure you find the right solution for your family, it’s important you know your income, expenditure and debts in full.

To find out what benefits you’d be entitled to I’d suggest checking with Turn2us, they're a really useful organisation that can help you find out what benefits you’d be entitled to and how to apply for them. On their website you can find a benefits calculator.

Reducing hire purchases can also be a good way to reduce expenditure but it’s important to check your contract and speak with the company to make sure this is within the terms of the agreement.

It's also possible to return hire purchases. If you’re half way through the agreement and there aren’t any arrears then you could voluntarily surrender it, possibly without any outstanding balance to pay.

You can look to work on your husbands behalf, if he’s happy for you to do that then you and your husband can complete a letter of authority to use with his creditors. This way you’ll have a clearer picture of the situation and be able to go forward in finding a solution.

Once you’ve got a good idea of your household income, expenditure and debts you can use our online Debt Remedy tool once complted you can find out what debt solutions would be available for you and your husband to become debt free.

Take care.
Rachael

bruana_brulee wrote: »

Hi
I am looking for some help with our family debts.
My husband and I used to earn a fairly decent salary, but fell into the trap of paying for things on available credit through catalogues and credit cards.
His mental health has deteriorated over the past few years, leading to a suicide attempt last week. He is now in hospital receiving the care he needs.
His earnings have been sporadic over the last few years, but we are now officially down to a one earning household. I know that burying our head in the sand will not aid my husbands recovery, and I am really keen to face our debts head on, tackle them and look to a debt free future where we can finally own our own property and live within our means
I don't really know where to start though! I know I need to contact creditors, many of them wont speak to me where the account is in his sole name. I need to get a comprehensive list of everything we owe and how best to pay it. How do I find out what benefits, if any, we are entitled to? We have never claimed any sort of benefit before so I have no idea how to start. We have 2 cars on finance, one of which I will definitely sell. Where is the best place to sell a car to clear the finance?
So sorry for all of the questions. I am on my own dealing with this and being in a situation like this is completely new to me.
Thank you for your time
Jess

Desperadoo · 6 July 2017 at 12:51PM

hi can I ask is there a list of amounts that are allowed of a DMP for groceries, telephone etc ?

thanks

StepChange_Rachael · 7 July 2017 at 9:02AM

Hi

Thanks for getting in contact.

A debt solution such as a debt management plan (DMP) should be based on what is affordable to offer the creditors after you’ve paid your household bills and general living costs.

Household and general living costs take priority over unsecured debts and a budget should always be based on what your essential living costs are. Then what is left over can be used to work out the best debt solution for you.

Where you can realistically cut back on household expenditure to help pay back the creditors sooner this is beneficial.

The creditors expectations for spending is based on something called the common financial statement. This shows average spending for households of various sizes. If your spending is outside of these averages it can make it less likely they will agree to accept reduced payment plans. The common finanacial statement isn't accessable to the public and as far as i'm aware there isn't a publically accessable list.

Our Debt Remedy tool, which is free and anonymous, works on averages for your household and will flag up any areas that are outside the averages creditors, would expect to see.

Debt Remedy can be used as a guide to building a realistic budget and to see if any areas of expenditure may be questioned by the creditors.

I hope this helps.

Thanks
Rachael

Desperadoo wrote: »

hi can I ask is there a list of amounts that are allowed of a DMP for groceries, telephone etc ?

thanks

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