Struggling with debt? Ask a stepchange debt adviser a question

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  • StepChange_Allen
    StepChange_Allen Posts: 352
    First Anniversary First Post
    Organisation Representative
    pendramoon wrote: »
    .
    .
    Hi all

    Thank you for taking the time to read my post. I am in 40k debt with two credit cards + a personal loan. I have been working over 50 - 70 hours a week to pay everyone out but in the end of the day I always have to use what I pay back on my credit cards. I getting very tired and emotionally drained out as this has been going on for 4-5 years now. I can feel that this put a huge risk on my health now.I can feel that I can't do too much over time now.


    SO I came to the conclusion I have to file for bankruptcy. Just want to know what is the process, what step it will take place? I have to complete an online form. upon submitting the for I have to pay the fee or after, before? what happens next? would people come to my rented property to take away my stuff? Don't have too much stuff. Also my Grandmother is very old and recently become more sick. She still manages OK but I think very soon she would need even more help from me. She lives abroad and just worried that they would take my passport away from me, I wouldn't be able to see her. Also my wife has a nice car what is in her name but she worries that they might take it away from us. (all my debt is in my name and I don't even drive). Also my wife is sceptical about me applying for bankruptcy as she say it has hidden issues. can you explain to me the possible negative impact on me please?

    Thank you for your answers


    Hi Pendramoon

    Welcome to the forum and thanks for posting.

    Before taking a step as big as bankruptcy, I'd highly recommend seeking debt advice from an organisation like ourselves. If you put a budget together with us, we can see whether bankruptcy is a good option for you. If it is, we can then discuss all the benefits, risks and consequences with you, as well the process to actually do it.

    If you don't wish to register with us, we have a lot of information about bankruptcy on our website: www.stepchange.org/debt-info/personal-bankruptcy

    I hope this is helpful.

    Allen
    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.
  • StepChange_Kirsty
    StepChange_Kirsty Posts: 180 Organisation Representative
    Hi Thomas,

    I’m afraid I cannot answer your question. As Debt Advisor’s we specialise in dealing with problem debt once it is no longer affordable, but we do not have knowledge on other financial products.

    I hope the response from ZX81 has been helpful or you could speak to a financial advisor. The Money Advice Service may be able to point you in the right direction to find a financial advisor.

    Many thanks,

    Kirsty



    Hi Everyone,

    I've currently got a £10,500 loan with Tesco at 9.9% paying £205.88 per Month over 5 Years. I used this to buy and insure a van 9 months ago for a load of work i had in. Since then the work has dried up and I have sold the van for £6,500 and my Tesco Loan settlement figure is £8,770.96.

    What i would like to do is use a 0% balance transfer card to shift the remaining £2,270.96 (Or more) to either a 12 month (£189.25 /Month) or a 24 Month (£94.62/Month) payment so i can save myself almost £1800 compared to paying the full £12,352.80 over the remaining 4 Years 3 Months.

    However I have never used a 0% balance transfer card before, and I've heard its tricky to do this with loans. What I need to understand is if this is possible or if it is exclusive to only credit card balance transfers.

    Just as a disclaimer, I can afford the monthly repayments on the tesco loan, I just want to clear this debt and have more monthly spending money rather than having a big load of cash sitting around.

    Let me know if anyone can help!

    Thanks
    Hi zx81,

    thanks for the quick reply, So just to be clear it wouldn't be a balance transfer card it would just be a spending card? I just want to get the definitions correct.
    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.
  • I'm deeply in debt, most accounts in collection. I don't want to declare bankruptcy if possible and have been looking at debt settlement options. Is National Debt Relief worth it? Thanks.
  • Jaffa_pig
    Jaffa_pig Posts: 190
    First Post First Anniversary Combo Breaker
    Forumite
    edited 9 September 2019 at 9:33AM
    Hi,

    I have been getting deeper and deeper in to debt the last few years. I have health issues and can’t get a regular job, as sometimes I am unable to work for long periods. I lost my PIP a few years ago, so we took the decision to downsize our house to pay off our debts. It went badly though and we lost two houses at the last minute and had to rent for a while before moving into our new home. It ended up costing us money, rather than paying off anything. I have since started a small part time business from home, which is doing well and even though I am not making much, it is increasing every year. I owe £22,000 on 3 credit cards. I moved the money owed around every time I got an offer of an interest free balance transfer. The interest free period is now up on all of them and I haven’t been offered another interest free one. I am now paying over £300 a month in interest and all my minimum payments have gone up a lot. So far I have managed to pay the minimum payment on time for all of them, but it is becoming increasingly difficult to do so. My car's MOT is due next week and if it fails, I won’t have the money to get it repaired and I need my car for my business. My husband works full time, but on a low wage and he has debts of his own, he doesn’t want to contact the credit card companies, as he doesn’t want his credit rating affected. I started to fill in the step change form, but as soon as I said I was self employed it wanted me to go to a business debt website. I don’t feel I need to do that, as my business has no debts and is doing well. I would appreciate any advice on what I should do. Thanks
  • StepChange_Kirsty
    StepChange_Kirsty Posts: 180 Organisation Representative
    Hello there,

    Thanks for your post and welcome to the forum.

    I’m not very familiar with National Debt Relief but having looked at their website I can see they do charge fees for debt management plans (DMP’s). I would always recommend seeking free debt advice from an organisation which also provide free DMP’s.

    At StepChange we provide free and impartial debt advice and you can find our official website here. https://www.stepchange.org/

    There are other organisations also providing free and impartial advice as follows:

    National Debtline

    Citizens Advice

    Payplan

    I hope this helps,

    Kirsty




    brownmike wrote: »
    I'm deeply in debt, most accounts in collection. I don't want to declare bankruptcy if possible and have been looking at debt settlement options. Is National Debt Relief worth it? Thanks.
    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.
  • StepChange_Kirsty
    StepChange_Kirsty Posts: 180 Organisation Representative
    Hi Jaffa pig,

    Thanks for your post.

    In your situation I would still recommend you speak to Business Debtline for advice. I appreciate your business is doing well, which is great news, but you still need specialist advice because of the nature of your income. It would also be beneficial for you to speak to a debt advisor who can give advice on the impact of different debt solutions on your business. Business Debtline can give you this advice whereas StepChange cannot.

    Like StepChange, Business Debtline provide free, confidential and impartial debt advice even if you don’t have any business debts. You can find their contact details here.

    You mentioned your husband is also on a low income and has debts of his own. Whilst I understand he doesn’t want to impact his credit rating sometimes having that hit is best all round for dealing with the debts once and for all. Business Debtline would be able to do a joint budget for you even if he is not self-employed.

    All the best,

    Kirsty



    Jaffa_pig wrote: »
    Hi,

    I have been getting deeper and deeper in to debt the last few years. I have health issues and can’t get a regular job, as sometimes I am unable to work for long periods. I lost my PIP a few years ago, so we took the decision to downsize our house to pay off our debts. It went badly though and we lost two houses at the last minute and had to rent for a while before moving into our new home. It ended up costing us money, rather than paying off anything. I have since started a small part time business from home, which is doing well and even though I am not making much, it is increasing every year. I owe £22,000 on 3 credit cards. I moved the money owed around every time I got an offer of an interest free balance transfer. The interest free period is now up on all of them and I haven’t been offered another interest free one. I am now paying over £300 a month in interest and all my minimum payments have gone up a lot. So far I have managed to pay the minimum payment on time for all of them, but it is becoming increasingly difficult to do so. My car's MOT is due next week and if it fails, I won’t have the money to get it repaired and I need my car for my business. My husband works full time, but on a low wage and he has debts of his own, he doesn’t want to contact the credit card companies, as he doesn’t want his credit rating affected. I started to fill in the step change form, but as soon as I said I was self employed it wanted me to go to a business debt website. I don’t feel I need to do that, as my business has no debts and is doing well. I would appreciate any advice on what I should do. Thanks
    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.
  • Thanks Kirsty, I will do as you suggest and contact business debt line.
  • Hi, I've got £15k spread over 3 credit cards all up to their limits, I have another 2 with nothing on but currently don't have any 0% transfer offers with them. I am paying my minimum amount without any issues but one of the cards the 0% is about to expire and interest will start being added which I'm afraid I won't be able to pay, I've always had 0% offers to hand and was able to transfer and keep paying but now I really don't know what to do? Thanks for any advice.
  • StepChange_Rachael
    StepChange_Rachael Posts: 375
    First Anniversary First Post
    Organisation Representative
    Hi

    Thanks for your post.

    It’s always beneficial to pay as little interest as possible and when you can find low interest rates it can really help. Budgeting and paying as much as possible towards the credit cards to pay the capital is the best way to clear the debt as soon as possible and reduce the amount of interest you’ll have to pay back overall. If the minimum payments are affordable then this is the best route.

    If minimum payments aren’t affordable and cutting back on living costs is causing further financial problems, then I’d recommend looking into alternative options. There are debt solutions available to people struggling with problem debt but should only be taken up when the minimum payments are no longer maintainable. By making reduced payments this will mean creditors have the option to follow the collections process and default the debts which will also impact your credit file.

    If you do feel that the minimum payments are becoming difficult, or by making these minimum payments you’re having to use further credit to keep up with living costs, then I’d recommend seeking free debt advice. This can be done through us at StepChange and you can find our contact details here.

    Thanks
    Rachael













    ChefKev wrote: »
    Hi, I've got £15k spread over 3 credit cards all up to their limits, I have another 2 with nothing on but currently don't have any 0% transfer offers with them. I am paying my minimum amount without any issues but one of the cards the 0% is about to expire and interest will start being added which I'm afraid I won't be able to pay, I've always had 0% offers to hand and was able to transfer and keep paying but now I really don't know what to do? Thanks for any advice.
  • Hi
    I have a query about partial settlement of a credit card debt of around 8K.

    My creditor has agreed to freeze charges and interest at the beginning of the year when the balance was 10k, and I’ve been keeping up with the minimum repayment which amounts to 200£+ every month.

    However, it’s been extremely difficult, and I’ve had to sacrifice almost everything. Daycare cost for two small kids, rent and utility bills is what is making my financial situation difficult, and I don’t see how we can go on like that. For instance, I need to buy a new car seat for my little one next month, and don’t see how this is feasible without paying less than the minimum amount…which means my account will fall in arrears.

    I’ve had the time to think over it this, and now feel like I want to go down the route of partial settlement to clear my credit card debt once and for all.

    My question is:
    If I start making small token payments for 5 months straight (let’s say 50£ instead of the 200£ minimum I’m currently paying), and then propose a partial lump sum settlement BEFORE they send me a default notice (which usually occurs after 150 days of arrears), will they accept it? Basically, I’m assuming that falling into arrears will make them more likely to accept a partial settlement of maybe 25% of the full amount (which I’m hoping I can secure with help from family)

    If they do accept, will my credit report show a default, a partial settlement, or both ?

    And if my credit reports shows a partial settlement only (but not a default), for 6 years, does that mean I will find it hard to secure a mortgage the next 6 years?

    I know for a fact that I’m absolutely done with credit cards so I don’t really care about a low credit score (I don’t ever want to apply for one),...but I’m 37 , with 2 small kids and never had a mortgage…. and I’m worried about becoming a home owner only 6 years from now.

    I’m hoping that a partial settlement before default and debt collectors getting involved will mean my credit score is not too tarnished, if that makes sense?
    Thank you for your help.
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