To not pay off debt ?

CPHB2021 · 2023-03-07T22:33:57+00:00

£520 in debt to energy company. Should we just pay it off so we are able to build credit over the summer or should we keep the money ( it's in our small savings pot ) and see how the summer goes. We've never been in any kind of debt before, bar our mortgage, so it makes me very uneasy to know we owe this money. Would you pay it off? Or see how it goes!

SkyandSurf · 07/03/2023 22:35

Have you asked them for a payment plan? Tell them you are struggling. Offer to pay off 10% a month.

Then you can keep the bulk of the money in a savings account in case there is an emergency.

Reinventinganna · 07/03/2023 22:36

Why wouldn’t you if you have the money?

Original poster

CPHB2021 · 07/03/2023 22:37

SkyandSurf · 07/03/2023 22:35

Have you asked them for a payment plan? Tell them you are struggling. Offer to pay off 10% a month.

Then you can keep the bulk of the money in a savings account in case there is an emergency.

They've just upped our DD, so was hoping that they've accounted us chipping away at that in this recent increase. It's gone from £136 to £276 if that helps!

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Original poster

CPHB2021 · 07/03/2023 22:39

Reinventinganna · 07/03/2023 22:36

Why wouldn’t you if you have the money?

We have the money but also, it's there to fall back on. Like most, we haven't been able to save much so our savings pot is not huge at the moment and I wondered if there was harm in just allowing it to be there and see if our summer bill chips away at it quickly. If that makes sense. Probably not- I'm very tired and should probably sleep, not be on MN!

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autienotnaughty · 07/03/2023 22:41

If they are not asking for it I wouldn't. Your bill will go down in summer . You can see what it's like over next few months and if you are not making a dent pay it off.

Shinytaps · 07/03/2023 22:41

They've put your DD up to address the debt. You'll have it paid down pretty quickly once it gets warmer. You don't need to pay it off in a lump sum.

Original poster

CPHB2021 · 07/03/2023 22:42

autienotnaughty · 07/03/2023 22:41

If they are not asking for it I wouldn't. Your bill will go down in summer . You can see what it's like over next few months and if you are not making a dent pay it off.

Thank you. This is a good idea! Just feels so strange knowing it's there!

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Original poster

CPHB2021 · 07/03/2023 22:43

Shinytaps · 07/03/2023 22:41

They've put your DD up to address the debt. You'll have it paid down pretty quickly once it gets warmer. You don't need to pay it off in a lump sum.

Thank you! We've never been in debt with them before so I wasn't sure how best to go forward. Seems we just leave it and hopefully it's paid off before winter !

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WinterMusings · 07/03/2023 22:50

@CPHB2021 I understand how you feel (not wanting the debt) but I think you should keep your small savings pot and just pay the new DD amount & pay it off

your savings could be used to replace a broken appliance, or just to top up your current account to pay bills, whatever you need. Paying the Energy company in one go, when they're not asking for it, or charging interest makes no sense.

If the new DD leaves you a bit short you could use some to lower the DD. But it would be better to cut back on other things IF you can so you can keep your savings.

SkyandSurf · 07/03/2023 22:50

You need to contact them. Don't just wait for them to make decisions.

It is absolutely in your favour to proactively contact them and sort out a payment plan. If you just leave it then you are on the back foot waiting for them to decide with no regard for what works for you.

It's smart to keep an emergency fund, especially if you are living paycheque to paycheque.

Don't part with the lump s unnecessarily, having it there will help you prevent getting further in debt.

Call them, explain your situation and ask for a payment plan.

WinterMusings · 07/03/2023 22:52

SkyandSurf · 07/03/2023 22:50

You need to contact them. Don't just wait for them to make decisions.

It is absolutely in your favour to proactively contact them and sort out a payment plan. If you just leave it then you are on the back foot waiting for them to decide with no regard for what works for you.

It's smart to keep an emergency fund, especially if you are living paycheque to paycheque.

Don't part with the lump s unnecessarily, having it there will help you prevent getting further in debt.

Call them, explain your situation and ask for a payment plan.

@SkyandSurf calm down. She doesn't need to contact them,, they have increased her DD to take this into consideration!

Original poster

CPHB2021 · 07/03/2023 22:53

SkyandSurf · 07/03/2023 22:50

You need to contact them. Don't just wait for them to make decisions.

It is absolutely in your favour to proactively contact them and sort out a payment plan. If you just leave it then you are on the back foot waiting for them to decide with no regard for what works for you.

It's smart to keep an emergency fund, especially if you are living paycheque to paycheque.

Don't part with the lump s unnecessarily, having it there will help you prevent getting further in debt.

Call them, explain your situation and ask for a payment plan.

Thank you. Do you not think them upping our DD by £140 a month, is them taking action? Or do you think they've upped it as clearly we were not paying enough. Genuinely asking, or do you think I should still contact to pay off the debit ?

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Original poster

CPHB2021 · 07/03/2023 22:53

WinterMusings · 07/03/2023 22:50

@CPHB2021 I understand how you feel (not wanting the debt) but I think you should keep your small savings pot and just pay the new DD amount & pay it off

your savings could be used to replace a broken appliance, or just to top up your current account to pay bills, whatever you need. Paying the Energy company in one go, when they're not asking for it, or charging interest makes no sense.

If the new DD leaves you a bit short you could use some to lower the DD. But it would be better to cut back on other things IF you can so you can keep your savings.

Thank you. That's what I was thinking ( re- keeping hold of the money )

Gosh, being a grown up isn't all it's cracked up to be!

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Youcancallmeirrelevant · 07/03/2023 22:55

I always end up in debt after winter, then back into credit by end of summer as we use basically 0 gas over summer but keep DD the same.

I would wait till end of summer and get to 0 before start of next winter

Original poster

CPHB2021 · 07/03/2023 22:56

Youcancallmeirrelevant · 07/03/2023 22:55

I always end up in debt after winter, then back into credit by end of summer as we use basically 0 gas over summer but keep DD the same.

I would wait till end of summer and get to 0 before start of next winter

Thank you! To be honest, I didn't really check bills last year so no idea if we've been in debt before! It just seems quite a lot!

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LadyJ2023 · 07/03/2023 23:02

Nah me and hubby would have paid and kept up to date. We had a slight debt between moving houses around the time of increase and as soon as pay day came we sacrificed leisure things that month to pay it straight back and your saying you have savings for it so I would have paid it straight back. Known to many who start the rocky road of not paying and now in deep debt troubles sadly one is one of my brothers but we recently helped him sort a payment plan with a debt agency so I hope he stays on right track now. Slippy Road to go down

WeBuiltThisBuffetOnSausageRoll · 07/03/2023 23:07

This isn't as straightforward as simply having a debt that you need to repay, though.

Almost everybody uses far less energy in the summer and far more in the winter, but finds it most convenient to pay the same amount every month. Therefore, either you will be 'in debt' to your supplier over the winter or they will be 'in debt' to you in the summer.

As long as it's all manageable and carefully planned, I don't see why it should automatically go their way, with them sitting on the seasonal balance (as a free loan) rather than the customer.

wanttokickoffbutcant · 07/03/2023 23:12

If you pay by monthly DD you are not in debt!! They average out annually so you will catch up in lower usage months. It doesn’t even show on a credit report unless you don’t pay the monthly DD.

neslop · 07/03/2023 23:18

Do you mean an actual debt where they've asked you to pay an amount that's outstanding and you have refused or been unable to pay? In which case you mustn't assume that increasing the DD will deal with it - contact them and sort it out explicitly or you could find it's handed to debt collectors.

But if it's just that your account has currently got a debit amount which will even out over the year as you'll use less energy in the summer then surely you don't need to worry about it? Our gas/electricity account is very rarely balanced, we're either in credit or debit depending on the time of year, and our direct debit is adjusted so that it works out over the whole year - I thought this was how it works for everyone who pays by DD? I've never seen it as 'being in debt" or "having a debt".

neslop · 07/03/2023 23:19

Just read the previous post- said what I meant in many fewer words!

Original poster

CPHB2021 · 07/03/2023 23:20

neslop · 07/03/2023 23:18

Do you mean an actual debt where they've asked you to pay an amount that's outstanding and you have refused or been unable to pay? In which case you mustn't assume that increasing the DD will deal with it - contact them and sort it out explicitly or you could find it's handed to debt collectors.

But if it's just that your account has currently got a debit amount which will even out over the year as you'll use less energy in the summer then surely you don't need to worry about it? Our gas/electricity account is very rarely balanced, we're either in credit or debit depending on the time of year, and our direct debit is adjusted so that it works out over the whole year - I thought this was how it works for everyone who pays by DD? I've never seen it as 'being in debt" or "having a debt".

No, they haven't made any contact. We've never missed a DD payment. It just simply states at the bottom of the bill £520 in debit.

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neslop · 07/03/2023 23:25

Then as long as you pay the monthly DD your supplier has set and they are monitoring it to check the total will even out over the whole year (which it seems they are, as they've increased your DD), then there's no problem.
You can of course pay it off if you feel happier psychologically doing that, but no necessity.

JetBlackSteed · 07/03/2023 23:37

So you are technically not in debt with the energy company. They know you are going to use less energy in the summer months and are actively trying to even out your payments over the year.
Keep your savings.

Tirnanogg · 07/03/2023 23:38

This happened to us last year (they didn't bill accurately, so ended up £1000 behind!) They did suggest paying it all off at once, but I told them the instalments I was willing to pay by and they accepted that (Octopus, in case you're with the same). Just keep an eye on your bills and make sure you're actually overpaying every month. We've only just cleared our balance a year later!

nokidshere · 07/03/2023 23:44

I never change my DD regardless of how much I'm in debit or credit. It's an ongoing payment and there are times when we catch up and times when we don't.

When eon wanted to increase my DD with the last increases I told them they could have the 234 or I would cancel it and give nothing. 234 is what I can afford, that's it. They agreed to the payment. I'm about 250 in debt to them right now but I expect that to clear in the summer months.