Struggling with debt? Ask a stepchange debt adviser a question

Former_StepChange_Patience · 31 July 2019 at 4:47PM

Hi Hannah

Thanks for getting in touch.

I’m afraid I’m not familiar with a consumer proposal as a way of managing debt, but there are lots of different ways that debt can be dealt with. You can find out further information about the different solutions here: https://www.stepchange.org/debt-info/debt-solutions.aspx

When dealing with debt, it’s useful to try and find the best way to manage all of them fairly, so I would suggest trying to not prioritise one debt over another.

Paying off a smaller debt may not improve the credit file as the record of the missing or reduced payments will still show on there for 6 years from the date it was first registered with the credit referencing agencies.

If you would like us to have a look at your circumstances, you can start a budget with us either online or over the phone and see what options we can suggest. You can find out the different ways we can start things with you here: https://www.stepchange.org/start.aspx

I hope this helps.

Patience

HannahRG wrote: »

Hello,

I have 10000 worth of debt.
I have looked at my credit reports and I have £6000 worth of CC debt which is charged off and 4000 in other debts (all in collections) what should I prioritize? Is it worth doing a consumer propsal? If I pay off some of the smaller debts will it improve me credit score?

Changingtimes · 8 August 2019 at 7:53PM

Just wanted to update you all and ask for some further advice.
I started my DMP in Jan 19 with circa £22,000 of debt.

From getting refunds from a few complaints to PDL etc and paying just short of £1000 a month I am down to £12,000 so in 12 months I should be debt free ( family support helps me pay the £1000 a month).

Now the problem my car has died. Engine issues which I have had a quote to repair of £750 the car is worth £1500 and gets me from A to B. I need it for commuting to work.

Obviously I cannot take out credit and wouldn't even attempt to try BUT are there any options for me to sort this? I was thinking of speaking to SC and asking their advice on missing payments for 2 months that way I would have £2000 to pick up another little runaround. How would the creditors react to this and of course SC?

Any advice welcome. Thanks all

marriedworriedmum · 10 August 2019 at 9:09AM

Good morning.
My husband and I have been with Stepchange for almost 10 years, its been a hard slight but we've paid a large chunk of our debt off and I can honestly say you've been amazing.
Over the last 12 months everything that could go wrong, has gone wrong From a car that seems to need repairing constantly to a..quite literally.. blowing up washing machine. To more personal issues such as family bereavement. Whenever these mishaps have arised you have always been great at giving us a break or reducing our payments. As , typically our emergency fund never seems to quite cover these expenses
You did explain when we took a break recently that if this happens again the next step has to be to close the plan, and then look at re opening it again but going through a full budget check list to make sure everything is affordable for us and that its the right plan for us. Because of plain stupidity on my part the direct debit wasn't set up for last month. Completely my fault. I spoke to someone straight away to explain, but the plan had to naturally close.
I spoke to someone on Thursday about re setting up the plan and they were so helpful and said we could re set up the plan if we do a full budget review and if it still looks like its the right plan for us. I believe it is, but your advisor was saying perhaps we should look at taking into account a higher ' pot' for emergencies etc.
I said I would ring back yesterday to compete the full budget review when I had all my figures to hand......except I was late getting out of work and by the time I got out your office had closed!
We are in a position to pay the usual dd amount this month but I've got myself into a complete state all night worrying that because I didn't call back when I said I would that its all too late. I'm tired and full of cold and have a very moody teenager this morning so that night not be helping me to think rationally of course, but if I call Monday will that be too late? I'm so sorry I'm not usually this disorganised and have taken such pride in reducing our debt that I feel so stupid. Its just been quite a year.
Apologies if I've rambled!

LadybirdE · 11 August 2019 at 6:59PM

Hi, I wonder if you can help, no worries if not. I have a mortgage shortfall debt with my ex husband, of nearly £30k as a consequence of a repossession after he left and stopped contributing towards the mortgage. I have now re-married and my current husband would like to one day have a joint mortgage with me. To help with this, and to improve my financial situation he has offered to make a full and final settlement offer to my previous mortgage lender. I have a few concerns/ questions:
1) Is it possible to agree a F&F settlement which concludes your liability but not the liability of the other person (ie can they agree I am no longer liable for the remainder but that my ex husband is)? Or does a F&F settlement agreement conclude the liability of all parties under a joint debt?
2) When we took out the mortgage there was a higher lenders fee as we had a small deposit, which I understand probably means the lender purchased mortgage indemnity insurance (or an MIG) and could potentially have claimed on this after the repossession to recover some of their loss. I have read that even if you agree a partial payment in F&F settlement to the mortgage lender, you could still be pursued months or even years later for the remainder of the debt by the insurance company if they want to recover their losses in respect of the amounts they paid out for the claim. Is this true?
3) When we make this offer to the mortgage lender I would use one of the letter templates found online and ensure that it states that they must update my credit file to show it is settled, however I have also read that they could mark it with a ‘P’ as ‘partially settled’. If so, could this affect my ability to get a mortgage in the future?
Many thanks in advance for your time.

StepChange_Private_Messages · 13 August 2019 at 12:46PM

Hi Ian,

Thanks for you post and apologies for the delay in responding.

At StepChange we’re not able to advise on credit products I’m afraid as our specialism is in tackling problem debt without the use of further credit.

You may find some good information regarding personal loans on the main MoneySavingExpert website. If you do decide to take out a loan to pay off the credit cards then make sure you cut up the credit cards and close the accounts so you would not be tempted to use them again.

Alternatively, if you’re finding yourself struggling with the credit card payments you can get in touch with us in order to have a Debt Advice session with one of our expert advisors. You can find our contact details here.

Kirsty

Ian42 wrote: »

Hi, I have debts of £15000 on 2 credits (one was a zero interest balance transfer card) Both cards are almost at their limit. I had always cleared the full balance on my cards until the last few years. While.I can afford minimum payments i don't really have any access to cash with both cards maxed and all my wages going towards the cards.
I don't have any other debts with my car finance cleared and my mortgage was paid off about 10 years ago. My house is worth approximately £90,000.
Would a personal loan or a partial mortgage of my home be a good way to clear the debt on the cards? I could afford monthly payments of around £300 from my income of £29,000 gross annually

StepChange_Kirsty · 13 August 2019 at 5:48PM

Hi there,

Thanks for your post and apologies for the delay in responding.

It sounds like you’ve done very well in being able to clear £10,000 worth of debt in such a short period of time. When you’re in a debt management plan (DMP) we understand that you'll have unexpected costs from time to time and this sounds like one of those times.

I’d recommend getting in touch with our DMP team in order to look at arranging a payment break so you can deal with this unexpected cost. We can also discuss how your creditors will be informed.

You can find our contact details here under the DMP section and specifically ongoing plans.

I hope this helps.

Kirsty

Changingtimes wrote: »

Just wanted to update you all and ask for some further advice.
I started my DMP in Jan 19 with circa £22,000 of debt.

From getting refunds from a few complaints to PDL etc and paying just short of £1000 a month I am down to £12,000 so in 12 months I should be debt free ( family support helps me pay the £1000 a month).

Now the problem my car has died. Engine issues which I have had a quote to repair of £750 the car is worth £1500 and gets me from A to B. I need it for commuting to work.

Obviously I cannot take out credit and wouldn't even attempt to try BUT are there any options for me to sort this? I was thinking of speaking to SC and asking their advice on missing payments for 2 months that way I would have £2000 to pick up another little runaround. How would the creditors react to this and of course SC?

Any advice welcome. Thanks all

Former_StepChange_Patience · 14 August 2019 at 2:26PM

Hi there

Thanks for getting in touch, no apologies needed at all for your message.

It’s fantastic to hear that the debt management plan (DMP) although has been a hard slight, has actually been such a big help.

It sounds like it’s been a difficult 12 months for you as a family and I know it’s easier said than done but try not to worry about not calling us when you originally thought you could.

We usually provide someone longer than a few days to get in touch to review their plan to get it set back up, so if you call us when you’re ready (and feeling a little better) we’ll happily do the review and support you from there.

As my colleague mentioned, it may be worthwhile thinking about a bigger ‘pot’ for emergencies to help you in the future, if you have this ready for us when you call, we’ll add this on.

I hope this helps.

Patience

marriedworriedmum wrote: »

Good morning.
My husband and I have been with Stepchange for almost 10 years, its been a hard slight but we've paid a large chunk of our debt off and I can honestly say you've been amazing.
Over the last 12 months everything that could go wrong, has gone wrong From a car that seems to need repairing constantly to a..quite literally.. blowing up washing machine. To more personal issues such as family bereavement. Whenever these mishaps have arised you have always been great at giving us a break or reducing our payments. As , typically our emergency fund never seems to quite cover these expenses
You did explain when we took a break recently that if this happens again the next step has to be to close the plan, and then look at re opening it again but going through a full budget check list to make sure everything is affordable for us and that its the right plan for us. Because of plain stupidity on my part the direct debit wasn't set up for last month. Completely my fault. I spoke to someone straight away to explain, but the plan had to naturally close.
I spoke to someone on Thursday about re setting up the plan and they were so helpful and said we could re set up the plan if we do a full budget review and if it still looks like its the right plan for us. I believe it is, but your advisor was saying perhaps we should look at taking into account a higher ' pot' for emergencies etc.
I said I would ring back yesterday to compete the full budget review when I had all my figures to hand......except I was late getting out of work and by the time I got out your office had closed!
We are in a position to pay the usual dd amount this month but I've got myself into a complete state all night worrying that because I didn't call back when I said I would that its all too late. I'm tired and full of cold and have a very moody teenager this morning so that night not be helping me to think rationally of course, but if I call Monday will that be too late? I'm so sorry I'm not usually this disorganised and have taken such pride in reducing our debt that I feel so stupid. Its just been quite a year.
Apologies if I've rambled!

StepChange_Kirsty · 14 August 2019 at 4:26PM

Hi LadybirdE,

Thanks for your post and welcome to the forum.

I’ll answer each of your questions in turn:

1) Is it possible to agree a F&F settlement which concludes your liability but not the liability of the other person (ie can they agree I am no longer liable for the remainder but that my ex husband is)? Or does a F&F settlement agreement conclude the liability of all parties under a joint debt?

Yes, it's possible to agree to a full and final settlement for only your liability and not that of your ex-husband. You should make it clear in your letter that the intention is only to satisfy your liability for the debt.

2) When we took out the mortgage there was a higher lenders fee as we had a small deposit, which I understand probably means the lender purchased mortgage indemnity insurance (or an MIG) and could potentially have claimed on this after the repossession to recover some of their loss. I have read that even if you agree a partial payment in F&F settlement to the mortgage lender, you could still be pursued months or even years later for the remainder of the debt by the insurance company if they want to recover their losses in respect of the amounts they paid out for the claim. Is this true?

If your lender claimed on the Mortgage Indemnity Insurance, then yes is it true that both the mortgage lender can chase you for the shortfall and the insurance provider can chase for the money they paid out. You will need to check with the mortgage lender if they did or do intend to claim on this. If they have or do you need to be very careful with your full and final settlement offer as whilst it may satisfy the mortgage lender, you may still be chased by the insurer.

3) When we make this offer to the mortgage lender I would use one of the letter templates found online and ensure that it states that they must update my credit file to show it is settled, however I have also read that they could mark it with a ‘P’ as ‘partially settled’. If so, could this affect my ability to get a mortgage in the future?

It’s the decision of the mortgage lender if they would be prepared to mark the debt as settled or partially settlement. Both of these would be marked on your credit file for 6 years from the date of settlement. This could impact your ability to get a mortgage during this time.

Whilst I appreciate this might not be the ideal outcome, I hope this helps answer your questions.

Kirsty

LadybirdE wrote: »

Hi, I wonder if you can help, no worries if not. I have a mortgage shortfall debt with my ex husband, of nearly £30k as a consequence of a repossession after he left and stopped contributing towards the mortgage. I have now re-married and my current husband would like to one day have a joint mortgage with me. To help with this, and to improve my financial situation he has offered to make a full and final settlement offer to my previous mortgage lender. I have a few concerns/ questions:
1) Is it possible to agree a F&F settlement which concludes your liability but not the liability of the other person (ie can they agree I am no longer liable for the remainder but that my ex husband is)? Or does a F&F settlement agreement conclude the liability of all parties under a joint debt?
2) When we took out the mortgage there was a higher lenders fee as we had a small deposit, which I understand probably means the lender purchased mortgage indemnity insurance (or an MIG) and could potentially have claimed on this after the repossession to recover some of their loss. I have read that even if you agree a partial payment in F&F settlement to the mortgage lender, you could still be pursued months or even years later for the remainder of the debt by the insurance company if they want to recover their losses in respect of the amounts they paid out for the claim. Is this true?
3) When we make this offer to the mortgage lender I would use one of the letter templates found online and ensure that it states that they must update my credit file to show it is settled, however I have also read that they could mark it with a ‘P’ as ‘partially settled’. If so, could this affect my ability to get a mortgage in the future?
Many thanks in advance for your time.

Keefvilla · 14 August 2019 at 5:33PM

New to this forum, hope I am doing this right.
I was divorced in 2001. My ex wife was given the house in the settlement and I kept my pension. Recently I have received a letter from a company called Dryden Fairfax Solicitors concerning a joint debt we have to Arrow Global Limited. I have never had any dealings with either company. They were offering a discounted debt settlement.I would like to know if the debt I supposedly owe is statute barred under the limitation act as I have not paid any money or had any contact with either firm? I believe my ex wife was making minimal payments. I was not able to get off the mortgage when we divorced as my ex was not earning at the time, she has not bothered to have me removed since. I am concerned she has used the joint mortgage to get a joint loan somehow. I do not want to contact the solicitors yet in case it affects any possible action against me. Please help!

StepChange_Kirsty · 15 August 2019 at 4:55PM

Hi there,

Thanks for your post and welcome to the forum.

A debt would not be statute barred if the other party has been making payments to the debt within the last 6 years (based on a personal loan regulated under the Consumer Credit Act). This is covered in The Limitations Act 1980 s.31(7).

The concerning point here is that you believe your ex-wife has taken out credit in your name without your permission which sounds like fraud. I would recommend reporting this matter to Action Fraud either through their website or by calling them on 0300 123 2040.

I hope this helps.

Kirsty

Keefvilla wrote: »

New to this forum, hope I am doing this right.
I was divorced in 2001. My ex wife was given the house in the settlement and I kept my pension. Recently I have received a letter from a company called Dryden Fairfax Solicitors concerning a joint debt we have to Arrow Global Limited. I have never had any dealings with either company. They were offering a discounted debt settlement.I would like to know if the debt I supposedly owe is statute barred under the limitation act as I have not paid any money or had any contact with either firm? I believe my ex wife was making minimal payments. I was not able to get off the mortgage when we divorced as my ex was not earning at the time, she has not bothered to have me removed since. I am concerned she has used the joint mortgage to get a joint loan somehow. I do not want to contact the solicitors yet in case it affects any possible action against me. Please help!

Struggling with debt? Ask a stepchange debt adviser a question

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