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    • MSE William
    • By MSE William 5th Dec 17, 5:30 PM
    • 65Posts
    • 38Thanks
    MSE William
    Would breathing space from problem debt have helped you? Help call for change
    • #1
    • 5th Dec 17, 5:30 PM
    Would breathing space from problem debt have helped you? Help call for change 5th Dec 17 at 5:30 PM
    If you’ve ever had problem debt, we'd like to hear your thoughts on this proposal for breathing space…

    The Government is asking for views on bringing in a 6-week long breathing space period for people with problem debt in England (and possibly in Wales and Northern Ireland too). A similar scheme already exists in Scotland.

    Breathing space would give people in financial crisis a temporary break from interest, charges and enforcement action. It could apply to all pre-existing debts, helping people to get back on their feet and regain control of their financial situation (for example, after they've lost their job or been off work sick).

    The Government is also asking for views about creating a statutory debt repayment plan. This would extend the protections mentioned above for those who can pay back their debts in a reasonable time and at an affordable rate.

    For more info see the MSE news story.

    Please let us know what you think about the questions below. We hope to share some of your experiences in our formal response to the Government.

    If you've been affected by problem debt...
    • Would a breathing space period would have helped?
    • Would 6 weeks have been long enough?
    • Would a statutory debt repayment plan, with all your debts included, have helped?
    • Forumites in Scotland: Have you ever used the Scottish Debt Arrangement Scheme? What was your experience?
    Last edited by MSE William; 05-12-2017 at 5:46 PM.

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Page 1
    • sourcrates
    • By sourcrates 5th Dec 17, 7:40 PM
    • 14,304 Posts
    • 13,517 Thanks
    sourcrates
    • #2
    • 5th Dec 17, 7:40 PM
    • #2
    • 5th Dec 17, 7:40 PM
    In my case 6 weeks wouldn!!!8217;t of made any difference as insolvency was the only way to get rid of nearly 160k of debt (inc mortgage from repossession)) but in more normal circumstances it would be a help, however I would like to see it extended to at least 6 months because by the time people ask for help, they have already eroded every other avenue, and will be behind on most household bills, as well as credit debts.

    You need time to get back on track with utility bills etc, before you can even think about sorting the credit debts.

    A statutory repayment plan is a great idea, but it must be administered by either the government, or the debt charities, certainly not the private sector, debt management companies should be outlawed, and all debt remedies should only be able to be administered by the government and/or the debt charities.

    Fee charging debt management companies need to be completely eradicated and government should legislate to make this happen.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Free Legal advice see : http://legalbeagles.info/
    • baggybreeches
    • By baggybreeches 6th Dec 17, 9:07 AM
    • 62 Posts
    • 131 Thanks
    baggybreeches
    • #3
    • 6th Dec 17, 9:07 AM
    • #3
    • 6th Dec 17, 9:07 AM
    I think the 6 week breathing space is a good step in the right direction, however, I think there needs to be conditions attached.
    Speaking from personal experience the 6 weeks must be used for positive action in dealing with issue, not as an extension of ignoring the problem.
    • kindofagilr
    • By kindofagilr 6th Dec 17, 1:10 PM
    • 6,215 Posts
    • 20,905 Thanks
    kindofagilr
    • #4
    • 6th Dec 17, 1:10 PM
    • #4
    • 6th Dec 17, 1:10 PM
    If you've been affected by problem debt...
    • Would a breathing space period would have helped?
    • Would 6 weeks have been long enough?
    • Would a statutory debt repayment plan, with all your debts included, have helped?
    • Forumites in Scotland: Have you ever used the Scottish Debt Arrangement Scheme? What was your experience?
    Yes the 6 weeks would have helped, back at the start of our journey we had DD's bouncing and charges left right and centre, had we had the 6 week thing it would have been easier for us to get back on our feet.


    We managed to sort it by selling a load of stuff on ebay to pay all the charges etc


    Then managed to sort our budget out
    POAMAYC 2018 #87 Paid £7741.33/£12,000 ~ 55.01%
    POAMAYC 2017 #87 Paid £10,380.18/£10,000 ~ 104%
    POAMAYC 2016 #87 Paid £7454.80/£7000 ~ 106%


    Mortgage (Start Date 01/04/09 ~ 30 year term, due to end 01/07/39)
    £104,409/£84,580.30 (as of 31/05/18) ~ 18.99% Paid

    Christmas Savings 2018: £170 Cash ~ Amazon Vouchers: £40
    Cyprus 2019 Savings: £500/£6000 ~ Centre Parcs 2019 Savings: £0/£1500

    My Debt Free Diary (Link)
    • MSE William
    • By MSE William 12th Dec 17, 3:51 PM
    • 65 Posts
    • 38 Thanks
    MSE William
    • #5
    • 12th Dec 17, 3:51 PM
    • #5
    • 12th Dec 17, 3:51 PM
    Thanks very much everyone for sharing your thoughts on this. Please keep them coming...

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    • Catsacor
    • By Catsacor 12th Dec 17, 4:25 PM
    • 42 Posts
    • 39 Thanks
    Catsacor
    • #6
    • 12th Dec 17, 4:25 PM
    • #6
    • 12th Dec 17, 4:25 PM
    In my case 6 weeks wouldn’t of made any difference as insolvency was the only way to get rid of nearly 160k of debt (inc mortgage from repossession)) but in more normal circumstances it would be a help, however I would like to see it extended to at least 6 months because by the time people ask for help, they have already eroded every other avenue, and will be behind on most household bills, as well as credit debts.

    You need time to get back on track with utility bills etc, before you can even think about sorting the credit debts.

    A statutory repayment plan is a great idea, but it must be administered by either the government, or the debt charities, certainly not the private sector, debt management companies should be outlawed, and all debt remedies should only be able to be administered by the government and/or the debt charities.

    Fee charging debt management companies need to be completely eradicated and government should legislate to make this happen.
    Originally posted by sourcrates


    Hear, hear.
    • Iwanttobefree
    • By Iwanttobefree 12th Dec 17, 7:41 PM
    • 1,371 Posts
    • 3,448 Thanks
    Iwanttobefree
    • #7
    • 12th Dec 17, 7:41 PM
    • #7
    • 12th Dec 17, 7:41 PM
    6 weeks would be pointless and meaningless for me, most companies would let you off a month anyway if you asked.

    What I would like is a simple way to set up a payment plan when your in debt that allows you to keep your house (else end up being a burden to the taxpayer).

    Having a company tell you that if you can pay 75% of the debt off they will write the rest off, when you have zero way of paying is frustrating.

    Using companies like Step Change, only to find their estimated debt cleared date is meaningless as companies have no legal obligation to freeze interest, and that when a company refuses to, Step change can't act on my behalf, it's down to me to negotiate with said company, means using charities like Step Change are pointless.

    Having one company out of all your creditors that refuse to freeze interest rates but lower them so that although you are paying off reduced payments, because of the interest, after paying them you've paid almost nothing off your debt over the year is frustrating to say the least.

    Having one or two companies that every year cause a ton of hassle, a ton of phone calls, ignore my requests only to deal in writing etc is also stressful and causes unneeded frustration.

    For example, Creation Finance in 2014

    After numerous letters and ccing one to the Financial Ombudsman, they reduced my interest to 0.49% on a debt of £6686 with monthly repayments of £40

    That means out of each monthly payment of £40 I am paying off just £7 off my debt.

    So I'm paying £480 a year but only £80 off my debt.

    I was 50 in 2014, that means it would take until I'm 133 (83 years) to clear the debt, whereas if they froze the interest, it would have taken 14 years, or until I'm 64 (long term illness).

    I have 3 accounts with them, every year I fire off a ton of letters, every year it's a real hassle, every year I cc to the financial ombudsman before it gets sorted.

    They did actually freeze the interest last year then at the end of the year it all started all over again, unnecessary stress.

    I made an actual complaint to the financial ombudsman about the harassment, the hassle I have to go through with them every year, them raising my credit limit when I was only making minimum payments, the interest rates etc, , but it was a waste of time.

    Their findings basically agreed with Creation totally.

    As there's no law saying they have to reduce or freeze the interest rate, they have done nothing wrong.

    As Creation have said they didn't receive the letters I sent signed for and recorded and as 2 years later I cant provide the proof that I did send them,. it's there word against mine, and even though I sent the ombudsman the letters, they choose to agree that as I couldn't prove I did send them. then I hadn't (so I probably typed the letters for fun???) so cant prove they ignored my request only to deal in writing.

    As creation has lowered my credit limit (WHILE ON THE DMP) the ombudsman cant agree that they treated me unfairly in increasing it (before my DMP)

    etc etc etc

    And last week, 3 letters from creation about the three accounts, and here I go again.

    Almost feeling suicidal, not there yet, but life feels pretty pointless as it's unneeded stress after stress with no end in sight.

    The thing is, even if I find myself in a position on 4 years time where I have slightly more money, in that time I will need work done to the house, car etc, and even if my money increased, i wouldn't really be in a situation to pay them more.

    A simple agreement where I pay xyz at as fixed (low (or zero)) interest rate, reviewed every few years is whats needed, not constant hassle by one company causing me unneeded grief.

    Of course I borrowed the money so I should pay it back.

    However the fact of the matter is, I was mentally ill, we had one creation card that was permanently maxed out, only ever made min repayments, while depressed and in a not normal frame of mind I filled in a 2 min online application in both my and my wifes name to them, a few weeks later two cards dropped through the letterbox, both with about 5k more credit on each. And due to my mental health, I bought junk we didn't need.

    Or to put it another way, imagine the following situation, I come onto this site and ask you all a question.


    Me: I'm a little stressed, lent a friend some money and they haven't paid it back"
    Me they asked me if I could lend then £5000 5 years ago and I said yes, and said they could pay me back when they wanted, provided they pay a minimum of £50 a month.
    Me: They only ever paid the £50 back. I felt a little sorry for them, so sent them another £1000, but they still only paid the minimum each month.
    Me: after a couple of years I felt sorry for them again and sent them another £1000
    Me: Then a couple of years latter my friend and his wife both asked me if I could lend them each some more money, so I lent them another £5000 each.
    Me: Now they say they can't afford to pay me the minimum amount anymore, I feel really angry towards them.

    I suspect your reply would be

    You: Why on earth were you stupid enough to give them more money when they were obviously struggling to repay back the initial loan, to be honest, it's your own stupid fault.

    That is how the banks etc act every single day of the week, that is effectively how Creation (or Sygma) acted towards us, that is why thousands of people are in debt up to their eyeballs with no hope of paying it back for many of them, that is why some are driven to suicide. It may be legal, but it's wrong.

    I would have a shorter sentence if I robbed a bank and served time to pay it off.
    Last edited by Iwanttobefree; 12-12-2017 at 7:45 PM.
    I went to the doctor the other day, Lady Doctor, She says

    "We've got your test results back, we know what it is.

    You've got beating heart disease" Howard Devoto 2009
    • MSE William
    • By MSE William 4th Jan 18, 5:20 PM
    • 65 Posts
    • 38 Thanks
    MSE William
    • #8
    • 4th Jan 18, 5:20 PM
    • #8
    • 4th Jan 18, 5:20 PM
    Thanks everyone for your comments so far - we really appreciate you sharing your experiences on this issue. Your views will help us to make the case for breathing space from problem debt - and crucially how to improve the current proposals.

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    • MSE Andrea
    • By MSE Andrea 8th Jan 18, 10:50 AM
    • 9,050 Posts
    • 21,850 Thanks
    MSE Andrea
    • #9
    • 8th Jan 18, 10:50 AM
    • #9
    • 8th Jan 18, 10:50 AM
    Please do post if you can help with this.

    We know some of our regular forumites on here have posted their thoughts on other discussions before. Feel free to copy and paste them here if you can - the more we get on here the better.

    Thank you!
    Could you do with a Money Makeover?


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    • Imagnu
    • By Imagnu 9th Jan 18, 12:07 PM
    • 91 Posts
    • 443 Thanks
    Imagnu
    I'm 18 months into a Debt Arrangement Scheme (DAS). It was easy to arrange, I have a local advisor that I can contact if needed. It took a huge weight off my mind and is so good to see the debt amount decreasing month by month. I wish I had done it sooner (I had the forms for over a year before I filled them in!)
    • Fireflyaway
    • By Fireflyaway 9th Jan 18, 9:34 PM
    • 1,806 Posts
    • 1,961 Thanks
    Fireflyaway
    I agree with sourcrates. 6 weeks is not long enough. 8-12 weeks is more suitable.
    I personally think prevention is better. If the government wants to help they should ban payday lenders and cap interest on all other forms of borrowing. Also I second banning debt management companies that charge.
    Also its hard to recover from mistakes / unfortunate periods in your life when defaults etc stay on file for 6 years. I'm now working an OK job and have a good income but past issues may well stop me from getting a mortgage. Who decided on 6 years? If you can't see hope ahead its easier to just not bother making the effort.
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