Struggling with debt? Ask a debt adviser a question

Former_StepChange_Linsi · 26 April 2018 at 10:57AM

Hi Steve

Thanks for your post and welcome to the forum.

You’ve don’t the right thing to plan ahead before any of these payments become unaffordable.

I’m recommend speaking to our Financial Solutions team to see what options are available to refinance your debts/mortgage.

You can find their contact details here on our website.

All the best,

Linsi

Draggon wrote: »

Hello, hoping someone can offer some advice.
We (wife and I) are around £26,000 in debt with a mortgage on top of that.
We both have 2 young children who are now at school and in 2013 & 2014 (wife then me) went part time from our full time jobs, only down to 4 days instead of 5, each.
This, we did not budget or plan for (I know wrong thing to do) but it was the best thing we could do at the time for our children to help with childcare costs and actually spend time with them.

Anyway long story short we wracked up debt.

All of the £26000 is currently on 5 credit cards all on 0% which we move around when the deal ends. So far this has worked as the debt was higher.

Our current mortgage fixed rate (2.84%) does not end until May 2020 and if we get out of the deal now we will have to pay £5000 for the privilege

I think we are doing the right/best thing we can at the moment by shifting the debt around the 0% deals but my main worry is that come 2020 and we are in the actual middle/start of the Brexit fiasco the good Mortgage deals will be gone.

We are now both back to almost full time salaries now which are ok and so hopefully we can start clearing the debt...I hope.

My real question is....is it worth pursuing a good mortgage deal now, paying the £5000 get out fee and consolidating our debt into the new mortgage? We have equity and have worked out we would be asking for around 76% LTV.
I know that using a mortgage to clear debt is a no no, but i am just worried about mortgage rates going sky high and still having a massive debt hanging over us...at least in one place it looks/feels better. We think we can afford to lower our term as well if we did.

To give you a better idea, our house is now worth around £280000, (zoopla estimate) and we would need £215000 to consolidate mortgage and debt) the current mortgages deals say monthly payment is around £1000 and our current outgoings for mortgage and debt are around £1200 pm so we could clear debt, reduce term and save £200 per month if we did.

At least that is what I can figure.

I appreciate that our position is better than most but I am getting worried about the future.

Hope someone can offer advice...even if I don't like it.
Many thanks
Steve

Former_StepChange_Linsi · 26 April 2018 at 11:27AM

Hello

Thanks for your post.

I’m sorry to hear your circumstances haven’t changed, but don’t worry we’ll still be able to help and we wouldn’t expect you to pay more than you can realistically afford.

When you call we’ll have a quick review of your budget and explain what options are available. We’ll talk you through the next steps and provide all the tools you’ll need to confidently manage your debts. Even if our advice is to make payments directly to the creditors, the template letters we provide will show them you’re still working with and getting support from us.

You do need to meet certain criteria to be eligible for some solutions so if a solution you were expecting isn’t offered such as a DMP the advisor you speak to will be able to explain why. The minimum amount we pay to a creditor through a DMP is £5.

I hope this helps and we look forward to hearing from you soon.

Linsi

PETRA798 wrote: »

Hi all
Stepchange have been in touch to say that my TPP is coming to an end (nearly a year old), and that I need to contact them as I told them I hoped our circumstances would have changed by now (they haven't), and they need to look at other debt solutions. I assume this means going onto a DMP, but tbh we don't have any spare income, and are still struggling. Any ideas what the minimum payment Stepchange will accept into a DMP is? I don't feel confident going it alone at the moment as I feel Stepchange have a bit of clout with the lenders and DCAs. Most of the debt have now defaulted and gone to DCAs, just 2 x Barclaycards and another credit card hanging on.
Any advice would be appreciated.
Thank you

Former_StepChange_Linsi · 26 April 2018 at 11:31AM

Hi

Thanks for your post.

This is the formula we’d recommend you use if you decided to deal with the creditors directly:

individual debt x surplus ÷ total debt owed = individual offer

Just to clarify the surplus is money you have left over after paying essential bills and living costs.

So if you owed £16000 in total and had £200 a month free to pay towards your debts, a debt with a balance of £2500 would get £31.

If you’d like any more advice about your DMP or going self-managed before making a decision don’t hesitate to call us. Here are our contact details. You can also find more information about DMP payments on our website.

I hope this helps.

Linsi

NeverendingDMP wrote: »

Hi all. I was just wondering if there is a formula for how stepchange work out who gets what % of a DMP payment. I'm considering self managing but wouldn't know how to divide the money up if my income changed or one of the debts was paid off. Thanks all

Former_StepChange_Linsi · 26 April 2018 at 11:46AM

Hi James

Welcome to the forum and thanks for your post.

You’ve come to the right place, so try not to worry I’m sure we’ll be able to help. There isn’t a minimum or maximum amount you need to pay to get help from ourselves, the most important thing is that the payments are affordable.

The best thing to do is create a budget. You’ll be able to list your income, household bills and essential living costs for you and your family. We’ll then be able to see what money you have left over to pay towards your debts and recommend a suitable debt solution based on this.

We can give advice and set up IVAs but I can’t say this will be our recommendation at the moment. We will however, explain all the options available to you, so you can make an informed decision.

As a charity our advice is free and impartial. If you’d like further advice you can use our anonymous Debt Remedy tool to create a budget online and see which debt solutions are available to help you become debt free.

In the meantime there's general information about the types of solutions we recommend on our website.

I hope this helps,

Linsi

James1981t wrote: »

Hi there im new on here not sure if I’m writing in the right place. I’m 80k in debt and I own my house but has no equity in it. I live in it with my partner and 2 year old daughter. I’ve been out of work for last two months but have used my savings up to pay the debts each month. I’m behind on a few now but starting work in two weeks time. I’ll be bringing home 4000 a month if I enter an IVA how much would I be expecting to pay a month all my out goings add up to around 3500. But wat can I include on my break down of outgoings my partner does not work as she looks after our daughter and I give her money. Please help I’m all over the place

NowInspired · 28 April 2018 at 9:01AM

Hi
If wages vary from one month to another, because sometimes overtime is available and sometimes not, what figure would you want to be put on your initial income and expenditure form and if it is worked on an average, is it based on the last few months?

Thanks

Former_StepChange_Linsi · 28 April 2018 at 9:33AM

Hi

Thanks for your post.

I'd recommend listing an average income based over the last 3 to 6 months.

If you're using our Debt Remedy tool to create a budget I'd recommend you call or start a live chat rather than using this forum if you have any other questions. This way we'll be able to see the information you've provided, which helps us give better advice.

The chat option and our telephone number can be found by clicking the 'need help' button at the bottom of each page in Debt Remedy.

I hope this helps.

Linsi

NowInspired wrote: »

Hi
If wages vary from one month to another, because sometimes overtime is available and sometimes not, what figure would you want to be put on your initial income and expenditure form and if it is worked on an average, is it based on the last few months?

Thanks

GhostRiderTim · 28 April 2018 at 1:21PM

Hi, I have a major concern about some attachment to earnings I have.
Over the past 4 months most of my wages have been taken by 4 attachment to earnings, now i know and understand these need to be paid asap but the rate they are taking it back at is crippling my family. I work full time, my partner stays at home to look after our youngest of 4 children. I have been questioning my payroll department for the past 2 months about what the attachments are for and finally they email'd me with the details. To my horror from earning a gross total of £2352.78 for April I have been left with £463.79. £499.88 was for an advance due to a mistake they made on my last months wages, £272.80 Tax, £198 NI, £44 Pension and a whooping £869.83 for Attachment to Earnings!!.
As you can imagine this has really messed us up for the coming month, our rent is £450 (council) council tax is £135, electric and gas approx £150 and thats all before transport, food and other payments for telephone, tv licence, internet etc:
Is there a maximum that can be taken per month from your wages as this is leaving my family well below the level where we can live.
I feel that trying to provide for my family is impossible by working and would be better off following the herd on benefits!!!

sourcrates · 28 April 2018 at 1:36PM

GhostRiderTim wrote: »

Hi, I have a major concern about some attachment to earnings I have.
Over the past 4 months most of my wages have been taken by 4 attachment to earnings, now i know and understand these need to be paid asap but the rate they are taking it back at is crippling my family. I work full time, my partner stays at home to look after our youngest of 4 children. I have been questioning my payroll department for the past 2 months about what the attachments are for and finally they email'd me with the details. To my horror from earning a gross total of £2352.78 for April I have been left with £463.79. £499.88 was for an advance due to a mistake they made on my last months wages, £272.80 Tax, £198 NI, £44 Pension and a whooping £869.83 for Attachment to Earnings!!.
As you can imagine this has really messed us up for the coming month, our rent is £450 (council) council tax is £135, electric and gas approx £150 and thats all before transport, food and other payments for telephone, tv licence, internet etc:
Is there a maximum that can be taken per month from your wages as this is leaving my family well below the level where we can live.
I feel that trying to provide for my family is impossible by working and would be better off following the herd on benefits!!!

Hi,

Since Stepchange advisors will not log on again till Monday, i hope they will not mind if i point you in the right direction today.

You can apply to the court on a form N244 to vary or change the order if you find that you cannot afford the deduction rate on the attachment of earnings order.

You will have to give full details of your budget and why you cannot afford the deductions set by the court. You can also use this form if your circumstances at work change and you want the court to look at suspending the attachment of earnings order.

Download and fill this in, and send it off to them.

Louie65 · 30 April 2018 at 12:47PM

Hello,
I've been paying Lowell Financial for a Barclaycard debt of £1644 which is now down to £204.

Today I have received a letter from them (30/04/2018) advising me that they failed to provide me with a formal notice that they had bought the debt on 22/04/2010 - some 8 years overdue.

Can I use their failure to comply with the legislation in someway similar to the PPI mis-selling episode?

Thank you

Former_StepChange_Linsi · 1 May 2018 at 1:20PM

Hi

Thanks for your post.

The amount you need to live on is referred to as the ‘protected earnings rate’ (PER). This varies depending on your circumstances but is taken into account when the court is working out how much can be deducted.

You can use an N244 form to request a change to the deduction or the PER. You’ll need to include current proof of income and a budget when returning this form and there’s a fee of £255 to pay.

If any of the orders you have are for council tax you won’t need to use an N244 form. This is because councils have the discretion to stop or vary a deduction.

For any orders relating to council tax you should write to the council asking them to stop the attachment of earnings or reduce the deductions to an affordable amount. You’ll need to quote ‘Regulation 41(2) of the Council Tax (Administration and Enforcement) Regulations 1992’ and include a copy of your budget and list of creditors.

Depending on what the orders are for you may also be able to consolidate them into a single attachment of earnings.

For more advice about your options I’d recommend calling us to speak with an advisor. We’ll also be able to help you create a budget to show the court/creditor. Our contact information can be found here.

I hope this helps,

Linsi

sourcrates wrote: »

Hi,

Since Stepchange advisors will not log on again till Monday, i hope they will not mind if i point you in the right direction today.

You can apply to the court on a form N244 to vary or change the order if you find that you cannot afford the deduction rate on the attachment of earnings order.

You will have to give full details of your budget and why you cannot afford the deductions set by the court. You can also use this form if your circumstances at work change and you want the court to look at suspending the attachment of earnings order.

Download and fill this in, and send it off to them.

Struggling with debt? Ask a debt adviser a question

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