Struggling with debt? Ask a debt adviser a question

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  • Hi,

    I’m new to this forum. I’m 18 and around 6 months ago I had what I believed to be a sturdy job. Because of this I got a contract phone and credit card. Then the company got closed down and my boss got arrested (long story haha), anyway I was left unemployed and with a phone bill etc. I’m currently doing a course which means I will be in employment within a month or two. I will be a qualified rail worker earning around £15 an hour so I want to start paying my debt off as soon as possible, and once I start paying my debt off will my credit score improve gradually or when I’ve paid my debt fully?

    I want to start saving for a mortgage and I know I will need a good credit score for this. At the moment it is ‘very poor’. I’m giving myself till I’m 22 to secure a mortgage. I owe around £2,000-£2,500 in total which I know is easily manageable but I just want to know what I can do to get my debts in order as I’ve really lost track of who I owe money to, I’ve been getting letters from debt collection agencies so the question is how can I get this sorted and start saving for a mortgage.

    Any advice would be appreciated and any help will be great.

    Thanks -
    Liam
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Thanks for posting.

    I’m sorry to hear that you’ve had difficulties and are now struggling with debt. The only way to not impact your credit file is to keep up with the minimum payments with the creditors. If you miss payments or make reduced payments at some point the creditors will eventually default the debts and this is what will have the main impact initially on your credit file.

    There are many different types of debt solutions but it would be difficult to say what the best options would be for you without being able to discuss the full situation.

    I’d suggest getting some further independent debt advice to discuss your options. As debts can be collected differently outside the UK then it can be a bit more complex. If you’re main place of interest is in the UK or you’re intending to move back within the next 12 months then we can certainly help you explore your options.

    You can find our contact details by following this link.

    Thanks
    Rachael

    Tawny_Owl wrote: »
    Hi there..have been reading all the threads and replys and wondering if there are any other ways forward to address depts than D.M.P. or I.V A. We have about £50 thousand in dept with 3 MBNA cards " Barclays and 1 M&S.
    We are typicial of the property in France owner that needed renovating for a purpose, took on an English builder who half finished the work and walked of with a great deal of our pensions and money on cards which we hoped would be repaided once finished. Then due to us finding out the quality of the work done was not secure we had to go into more dept to secure the roof etc!
    The bottom line is in September the interest only morgage we have on our property in England is due.
    Yes we have put our property on the French market ..But with things being unstable in Europe our property is only worth half what it was a shortfall if it sells of about £30 thousand.
    So while we are now struggling, to meet payments and are going further into dept and after speaking with C.A.B who suggested I think a D.M.P. we would not be able to get even a small morgage if our credit file is effected..that is beliving our property will sell.
    We are both pensioners at 66 and while some supply work has helped us along it is not at present due to injury.
    Is there do you think any other way forward? BIG thanks
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Welcome to the forum and thanks for posting.

    It sounds as though you’ve done a lot of research into ways to reduce your expenditure which is great and should really help you meet payments, especially with your household bills and general living costs as a priority.

    As a general rule as a debt advisor I wouldn’t advise on further borrowing so wouldn’t be able to offer the best advice on this option. This is because further borrowing often leads to further struggling and rarely solves the issue.

    Borrowing on your mortgage and securing the debt means that the creditor has much more rights of collection and if payments are missed they can try and force sale of the property through the court.

    Whichever route you decide to go forward with it’s important that it’s not putting you in a worse position financially.

    You’ve mentioned debt settlement not being an option; I’m not quite sure what exact solution you’ve considered that you don’t feel would be appropriate, as there are many different types of debt solution available to people struggling with their debt payments.

    I’d suggest before taking further debt out, especially secured debt, to have a look into all your options if you’ve not already and get some free and independent debt advice.

    However, ultimately it’s up to you if you don’t want to impact your credit file and feel that the payments would be affordable until the endowment comes through then this maybe a good option for you.

    All the best,
    Rachael


    willyloman wrote: »
    Hi there - I'm looking for some advice on what to do next. I've done the really scary thing amd faced up to my debts and I'm keen to tackle them - most of all I want to get back to a position where I'm not getting texts from the bank a few days after payday and feeling depressed for the remainder of the month.
    I am a home owner with my wife and have
    • a mortgage and about 12 years left on that - never miss a payment.
    • a car loan with about 3 years left at £230pm.
    • half a dozen credit cards with £40k of debt. Many of the cards are now comingor have come to the end of their promotional rate. Unfortunately for various reasons some payments have been late, but paid. No proving difficult/impossible to get new promotional cards to transfer to.
    My annual salary is £55k and my wife's around £20k.


    We have an endowment due next year which should pay off probably about £30k of debt.


    I've done some great MSE homework and managed to reduce my car insurance, home insurance, energy and broadband costs to a fraction of what we were paying. However, I still need to reducve the amount ougoing to service cc debt whci is getting near £1k pm.


    I was thinking of getting a loan for £30k with a repayment of about £400pm until the endowment came through and then pay that off. I'm not confident I'll get an unsecured loan, so was considering a secured one - as I know I'd be ableot keep up repayments and it should only be for a year. Don't want to go down the debt settlement routes for a variety of reasons.


    Is this my best choice? - thought of remortagaging but currently on base rate so remortage would hike interest rate for total payment.


    Really need some good advice please...
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Thanks for posting and welcome to the forum.

    There's something called a statute barred debt, this is when a debt under the consumer credit act hasn’t been acknowledged by the debtor within a 6 year period and therefore can’t be sent to and collected through the court. However, making payments to the creditors in a DMP means that you’ve been acknowledging the debt and the debt isn’t classed as a stature barred debt.

    A debt being statute barred doesn’t write off the debt it just means the creditor can’t take the debt to court and set a County Court Judgement (CCJ) against it.

    Debts can legally be passed on for third party’s to collect.

    They are maybe suggesting that the collections agency doesn’t have the original paperwork so can’t legally take the debt to court to set a CCJ against it.

    If this is the case you can ask for the original paperwork from the collection agency yourself. You wouldn’t have to pay a third party to do this, which often companies will charge to do.

    If the collections agency can’t provide this then they are unlikely to be able to take the debt to court. Meaning their collections route would be very limited to asking for payments. They wouldn't be able to use court action such as enforcement agents or set an attachements of earnings.

    On another note your DMP seems like it’ll take a very long time to complete. There may be good reasons as to why you’ve chosen this option but if you’re being charged fees or other debt solutions weren’t discussed with at the time of setting up the DMP then I’d suggest getting some further free debt advice. StepChange would be happy to do this and you can find the contact details here.

    I hope this helps.
    Rachael



    Hope132 wrote: »
    Hi, I am currently in a DMP & have been for the last 6 years, never missed a payment, no CCJ,s, etc. I still have another 9 years to go before i am debt free! I have been approached by a Finance Barrister who claims most of my debt can be wiped off due to the consumer credit act. As my debts have now been passed over to third party debt agencies. Is this too good to be true?
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi Liam

    Thanks for your post.

    It sounds like you’ve got a good idea of you goals going forward.

    Credit files aren’t straight forward, many things can impact your credit score. I’d suggest taking a look at this MSE page for more information on improving your credit file.

    The main thing which is likely to be currently impacting your credit score are defaults, as you mentioned there are missed payments and creditors normally default the debts within a few months of missed payments.

    Defaults once added drop off automatically after 6 years and will no longer impact your credit file. It’s likely going forward they’ll start to have less impact especially as you start to pay back the debt.

    Once the debts have been paid back your credit file will show that the debts are fully paid and settled. It might be an idea to concentrate on paying the debt back first so that your credit file can start to improve while you’re saving. Also if the creditors are getting what is affordable at the end of the month after you've paid your houshold bills and general living costs they are less likely to try and take further action to try and get more towards the repayments.

    The best way to find out who you owe money to is by searching your credit file there are three in the UK, Call Credit (Noddle), Experian and Equifax (ClearScore). These will hold details of the debts you owe. I’d suggest checking all three if you’re really unsure.

    You can then look to find an affordable way forward to start clearing the debts. If you’d like free and impartial debt advice on how to do this you can find this help from StepChange.

    Take care,
    Rachael



    Hi,

    I’m new to this forum. I’m 18 and around 6 months ago I had what I believed to be a sturdy job. Because of this I got a contract phone and credit card. Then the company got closed down and my boss got arrested (long story haha), anyway I was left unemployed and with a phone bill etc. I’m currently doing a course which means I will be in employment within a month or two. I will be a qualified rail worker earning around £15 an hour so I want to start paying my debt off as soon as possible, and once I start paying my debt off will my credit score improve gradually or when I’ve paid my debt fully?

    I want to start saving for a mortgage and I know I will need a good credit score for this. At the moment it is ‘very poor’. I’m giving myself till I’m 22 to secure a mortgage. I owe around £2,000-£2,500 in total which I know is easily manageable but I just want to know what I can do to get my debts in order as I’ve really lost track of who I owe money to, I’ve been getting letters from debt collection agencies so the question is how can I get this sorted and start saving for a mortgage.

    Any advice would be appreciated and any help will be great.

    Thanks -
    Liam
  • Hi,
    My sister has got herself into a bit of a problem with her debts and I am trying to help her. Looking through her direct debits we found a payment Barclays credit. On contacting them she was told that it was for some patio doors that cost £2100. She paid a deposit of £50 and she pays just under £48 per month. This was a 10 year loan at about 30% interest and she has been paying about 5 1/2 years. We asked for a settlement figure but there is no early repayment reduction and we were quoted over £1500 to clear the loan.
    My sister does not remember this loan being properly explained to her. She does not remember being told how much this loan would cost in total or the interest rate. Is there anywhere we can go to with a view to finishing this loan on the basis that she wasn't properly advised. She has already paid over £3000.
    Many Thanks in Advance
  • Sue67_2
    Sue67_2 Posts: 5 Forumite
    Enquiring for a friend.

    They took a mortgage out some years ago with Northern Rock that was then transferred to NRAM. Unfortunately some payments were missed along the way and they ended up with a ccj. Payments on the ccj have been kept up to date for 4 years but at a cost of £2200 per month. The mortgage has now been transferred to Landmark who are not really a mortgage company. Because of the ccj a remortgage elsewhere at better rates and therefore a smaller monthly payment can't be obtained anywhere and they are really struggling to make this high monthly repayment. Is their only option selling their home or is there another way out of this nightmare? They have approx £200,000 in equity on the property with £100,000 still owing.
  • Hi

    Thanks for your post and welcome to the forum.

    If you don’t think your sister was given the right advice or has been treated unfairly the next step would be to raise a complaint with Barclays.

    Their complaints procedure is available on their website here. If they don’t respond within 8 weeks are you’re unhappy with their reply you can escalate the complaint to the Financial Ombudsman.

    Should your sister still be liable for this debt, you can use our Debt Remedy tool to create a budget and get tailored debt advice online. Here’s the link.

    I hope this helps,

    Linsi

    wessexman wrote: »
    Hi,
    My sister has got herself into a bit of a problem with her debts and I am trying to help her. Looking through her direct debits we found a payment Barclays credit. On contacting them she was told that it was for some patio doors that cost £2100. She paid a deposit of £50 and she pays just under £48 per month. This was a 10 year loan at about 30% interest and she has been paying about 5 1/2 years. We asked for a settlement figure but there is no early repayment reduction and we were quoted over £1500 to clear the loan.
    My sister does not remember this loan being properly explained to her. She does not remember being told how much this loan would cost in total or the interest rate. Is there anywhere we can go to with a view to finishing this loan on the basis that she wasn't properly advised. She has already paid over £3000.
    Many Thanks in Advance
  • Hi. I want to get a few credit cards to avoid the high overdraft fees I am paying. I have a good credit score, but my experian score has my old address on it. I bought a flat and moved in over a year ago, and changed my bank accounts to the new address when I moved. My credit report has no record of this, and now I'm getting denied every card/loan (presumably because my addresses don't match up?) How can I get this changed? Thank you!
  • StepChange_Kirsty
    StepChange_Kirsty Posts: 180 Organisation Representative
    Hi Sue,

    Thanks for your message.

    I’ve not come across mortgage companies obtaining a county court judgment (CCJ) for missed payments as they would usually look to apply for possession of the property if the mortgage is in arrears. I’m wondering if this was a together loan which included both a mortgage and unsecured loan? If the arrears were against the unsecured element this would explain why a CCJ was obtained.

    First of all your friend needs to confirm if the CCJ was against the mortgage or the unsecured loan. There is a way to have a CCJ varied but I would recommend your friend seeks debt advice in order to work out and affordable way forward.

    At StepChange we offer free, impartial and confidential debt advice and it would be best if your friend gives us a call so we can discuss this further. Our number is 0800 138 1111 and we’re open Monday to Friday 8am to 8pm, Saturday’s 8am to 4pm.

    If your friend is self-employed they will need to contact Business Debtline for the best help and advice. Even though this is not a business debt, Business Debtline offer the best help and advice for those who’re self-employed. Their number is 0800 197 6026 and are available Monday to Friday 9am to 8pm.

    I hope this helps.

    Kirsty
    Sue67 wrote: »
    Enquiring for a friend.

    They took a mortgage out some years ago with Northern Rock that was then transferred to NRAM. Unfortunately some payments were missed along the way and they ended up with a ccj. Payments on the ccj have been kept up to date for 4 years but at a cost of £2200 per month. The mortgage has now been transferred to Landmark who are not really a mortgage company. Because of the ccj a remortgage elsewhere at better rates and therefore a smaller monthly payment can't be obtained anywhere and they are really struggling to make this high monthly repayment. Is their only option selling their home or is there another way out of this nightmare? They have approx £200,000 in equity on the property with £100,000 still owing.
    I work as a debt advisor for StepChange Debt Charity 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.

    Don't be afraid of getting debt advice. We'll help you take one more step towards getting help with your debt.
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