Struggling with debt? Ask a debt adviser a question

miaoww · 11 July 2017 at 6:25PM

Hi guys - I don't know which way to turn re spiralling debt
iva or debt management plan?
im a full time working single mum - just divorced was hoping to secure the house / remortgage - ive got a court consent order saying that my ex agrees to sign it ( this will have to wait a while longer now! my own silly fault). Ive have been silently struggling for a while and am now at the stage where I don't think I can meet my minimum monthly payments on my cards - I don't know what to do now / whats my best options
please help
my budget as close as I can get it - ive prob been paying more for credit cards somehow bouncing one onto the next ( I know!)Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 1,601.36
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 391.96
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Monthly Expense Details
In Your Home
Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.91
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.00
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Bank account fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.43
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601.45
Plumbing/Boiler cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.73
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 250.00
Drinks for home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
sky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
secured loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486.98
car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.28
car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.37
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.54
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Rail/Buses/Taxis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Debt Repayments
Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump sum saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.67
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
School meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Nappies/Baby extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby-sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Playgroups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.39
Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big days out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (antivirus, etc) . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Clothes, Health & Beauty
Complementary therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.76
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Beauty treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Healthcare cash plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private medical insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New children's clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Education & Courses
University tuition fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One-Offs
Funeral expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.33
Winter holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Odds & Sods
Newspapers and magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular charity donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.32

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,582.46

clanger66 · 11 July 2017 at 6:41PM

Hi, my partner has credit card debts due to re training and is struggling to meet the payments, he is behind with payments at present. He has contacted Step Change and is considering a debt management plan, but was told this would be on his credit file for 6 years, is this correct? We are hoping at some point to get a mortgage in the future. If he contacted the credit card companies himself and told them of his difficulties would this affect his credit file in the same way? One of the credit card companies has agreed to 0 % interest since a year ago but he is struggling to meet the payments and wants them reduced.

StepChange_Rachael · 12 July 2017 at 8:46AM

Hi

Thanks for your post.

I’m sorry to hear you were made redundant from your job.

Most creditors will be understanding of the situation and willing to come to an agreement for reduced payments while you’re out of work and on JSA.

It’s important to keep creditors updated of the situation if you're going to miss the contractual payments, most creditors will want a financial statement showing your income, expenditure and list of creditors so they can see that the payment you make to them is fair and affordable.

It’s important to make sure the amount you offer them is going to be realistic for you, taking into account your household bills and living costs as a priority.

When making reduced payments to your creditors it can lead to defaults and possible further collections action, the HMRC have more rights of collection.

Also, if you’re still using the bank with the overdraft then be mindful of this, you can find more details on bank account advice here.

I'd also generally advise that any payment available to the creditors is split using a pro-rata calculation so it’s a fair payment depending on the debt totals.

You can use Debt Remedy which is an online tool to complete a budget and receive debt advice. As well as tailored debt advice you can also use the budget to support any offers of payments to your creditors.

Take care
Rachael

haelen wrote: »

Hi,

I'm self-employed, and was made redundant at the beginning of March, and am currently receiving JSA.

I have a small (in the scheme of things) number and amount of debts as follows:

Tax Credit overpayment: £1460
Leeds Credit Union Loan £700
Self Employed Tax payment on account £1200 (coming due 31st July)
Capital One Credit Card £1250

I have ban overdraft of £1500 (this has been the established amount for some years.)

At this stage, I'm thinking of asking Capital One to make a payment plan (despite interest still accruing) and the same with HMRC re: self-employment Tax.

I already have repayment plans with both Leeds Credit Union and HMRC for Tax Credit overpayment.

Any advice or recommendations would be most welcome.

Best,
T

StepChange_Rachael · 12 July 2017 at 9:44AM

Hi

Thanks for posting and for your expenditure breakdown, it’s great to have a full breakdown as it'll help you find suitable debt solutions and also help you budget going forward.

When it comes to a suitable solution it depends on what's affordable towards the debts and the debt total. This is important to see if the debt can be paid back in a realistic time frame as well as other aspects such as expected changes in your financial situation.

When it comes to a repayment solution, like a debt management plan (DMP) over insolvency, such as an individual voluntary arrangment (IVA), other things need to be taken into account which can mean one solution might be more suitable to one person than the other, for example employment, assets etc.

Taking a look at the budget I’ve noted that the repayments to unsecured debts are £557.82 a calendar month. The credit card repayments of £400 and under loan £157.82 (which I assume is an unsecured loan). Taking this away from your income the budget is still showing an overspend.

I think the best way for you to be able to explore suitable debt solution options would be to get tailored debt advice.

If you’d like you can use Debt Remedy which is our online debt advice tool, you can find and complete it here.

Thanks
Rachael

miaoww wrote: »

Hi guys - I don't know which way to turn re spiralling debt
iva or debt management plan?
im a full time working single mum - just divorced was hoping to secure the house / remortgage - ive got a court consent order saying that my ex agrees to sign it ( this will have to wait a while longer now! my own silly fault). Ive have been silently struggling for a while and am now at the stage where I don't think I can meet my minimum monthly payments on my cards - I don't know what to do now / whats my best options
please help
my budget as close as I can get it - ive prob been paying more for credit cards somehow bouncing one onto the next ( I know!)Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 1,601.36
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 391.96
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Monthly Expense Details
In Your Home
Mobile phones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
TV licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.12
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00
Home phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cleaning products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.00
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.91
Council tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.00
Overdraft cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Bank account fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.43
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601.45
Plumbing/Boiler cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage payment protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.73
Food and household shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 250.00
Drinks for home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
sky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
secured loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486.98
car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.28
car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.37
Car insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.54
Car maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Rail/Buses/Taxis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Breakdown cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Debt Repayments
Credit card repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.00
Hire purchase repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal loan repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cash ISAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump sum saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.67
School trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
School meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00
Nappies/Baby extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby-sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Playgroups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Travel insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.39
Family days out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big days out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
IT/Computing (antivirus, etc) . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
DVD rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Drinking out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Eating out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Clothes, Health & Beauty
Complementary therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.76
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Beauty treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00
Healthcare cash plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private medical insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Work clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New children's clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
New clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Education & Courses
University tuition fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One-Offs
Funeral expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.33
Winter holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.00
Odds & Sods
Newspapers and magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular charity donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,993.32

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,582.46

StepChange_Rachael · 12 July 2017 at 10:22AM

Hi

Thanks for posting.

The impact of debt solutions on credit files can be a concern for many people who begin to struggle with the contractual payments but there are a lot of myths out there.

It is correct that a credit file will be impacted by making reduced payments or missing the contractual payments. At some stage if your partner makes reduced payments or continues missing payments the creditors will issue a default on your partners credit file. This will happen whether a reduced payment is through a debt management plan or if it’s made directly by your partner.

Each debt can only be defaulted once, which will come off 6 years from the date it was added.

A default isn’t the only thing that will impact your partner’s credit file as many different things positively and negatively impact a credit rating.

Defaults on a credit file won’t stop someone getting a mortgage as a mortgage will be agreed not only on the credit file but also the deposit, employment and income etc. However, while it’s on there it will have some negative impact.

When someone is making payments towards their debt which has defaulted the creditors often put a flag next to the debt. This is seen as a positive as it shows even though the debt defaulted, there is a repayment arrangement in place.

Credit files generally improve over time, the important thing is that your partner is finding a way to deal with the debt before it becomes more problematic.

I hope that helps answer your query.

Thanks
Rachael

clanger66 wrote: »

Hi, my partner has credit card debts due to re training and is struggling to meet the payments, he is behind with payments at present. He has contacted Step Change and is considering a debt management plan, but was told this would be on his credit file for 6 years, is this correct? We are hoping at some point to get a mortgage in the future. If he contacted the credit card companies himself and told them of his difficulties would this affect his credit file in the same way? One of the credit card companies has agreed to 0 % interest since a year ago but he is struggling to meet the payments and wants them reduced.

rd93 · 12 July 2017 at 12:00PM

Good Morning Everyone,

I need some advice on what you think would be the best decision for me to take.

I am in debt to the tune of c £17k, due to gambling. I am now gamble free, and want to move on with my life. I have a surplus of my income of around £300 per month. I can live comfortably from £1,000 of my £1,300 per month wage.

The question is, my job is quite dead end, and I have places ready for September at University.

I am wondering if the better option for me personally is to apply for a DRO and attend university, as it is my understanding I would be able to get a DRO as I would meet the requirements; or do I stick with the DMP I am setting up and continue to pay it off over the next 5 years?

FreeMama17 · 12 July 2017 at 2:52PM

Hi,
I've received a letter from Moorcroft DCA, but it shows no details of who the creditor is or what the amount is. Is there a template letter I need to send them? It's not to get them to prove the debt is mine - it's to find out what they've contacted me about, if you see what I mean.

Thanks in advance.

StepChange_Rachael · 12 July 2017 at 4:12PM

Hi

Thanks for your post.

I can see how it'd be a difficult decision to make and it's important to take into consideration when looking at debt solutions, changes in your financial situation.

Debt solutions can have quite strict criteria and in particular debt relief orders (DROs). It would be difficult to suggest this solution without knowing your full financial situation and a good idea of the changes your expecting to your finances.

A DRO has to be applied through a money advisory service before the application is sent to the insolvency service, who then have the ultimate say if it is accepted.

A DRO wouldn’t be a suitable solution at the moment where you are able to make monthly repayments of £300 to your creditors however; a DMP may not be the best solution if you decide to go to University and are unable to make regular affordable monthly repayments.

I’d suggest discussing your options with a non-fee charging debt advisory service like StepChange so that this change in your situation can be taken into account while discussing suitable debt solutions.

Hope this helps,

Take care
Rachael

rd93 wrote: »

Good Morning Everyone,

I need some advice on what you think would be the best decision for me to take.

I am in debt to the tune of c £17k, due to gambling. I am now gamble free, and want to move on with my life. I have a surplus of my income of around £300 per month. I can live comfortably from £1,000 of my £1,300 per month wage.

The question is, my job is quite dead end, and I have places ready for September at University.

I am wondering if the better option for me personally is to apply for a DRO and attend university, as it is my understanding I would be able to get a DRO as I would meet the requirements; or do I stick with the DMP I am setting up and continue to pay it off over the next 5 years?

StepChange_Rachael · 12 July 2017 at 4:24PM

Hi

Thanks for getting in contact.

There is a template letter that you can use and it is found on the StepChange website.

This letter is to request the original agreement information they are now collecting for.

The collections agency should send back the details including copies of the original documentation explaining who the original creditor is, how much is left outstanding and what payments have been made so far.

You could also call them directly to ask for details of the debt. They should be able to give you the details you want over the phone but you might also want written correspondence as confirmation.

Hope this is helpful,

Thanks
Rachael

FreeMama17 wrote: »

Hi,
I've received a letter from Moorcroft DCA, but it shows no details of who the creditor is or what the amount is. Is there a template letter I need to send them? It's not to get them to prove the debt is mine - it's to find out what they've contacted me about, if you see what I mean.

Thanks in advance.

FreeMama17 · 12 July 2017 at 9:37PM

Thanks so much, Rachael, I thought I'd spotted one while browsing, but I couldn't find it again.

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