Live advice clinic with StepChange debt charity this week - post your questions here

[AnnaCMumsnet]

Hello,

Mumsnet and StepChange Debt Charity are teaming up once again to provide a free online debt help clinic. They’ll be offering information and advice on this thread about all aspects of personal debt.

StepChange is the largest debt charity in the UK, and over the last 26 years they’ve helped well over 5 million people with debt. They recently reported that 2018 was their busiest year ever, with over 650,000 new clients contacting them for help, and they’re even busier so far this year.

Do you find it difficult to talk about your debt problems?
StepChange want you to know that they have a free, online debt advice service that you can access 24 hours a day. You can put a budget together at your pace, and you can also talk it over with an adviser through online chat.

StepChange want to help Mumsnetters with anything they’re experiencing because of money or debt worries. So if you’re getting letters from the bank, struggling to afford to pay a debt, or you’ve been threatened with court action, or anything else around debt, post up a question.

The clinic will take place on this thread from Monday 4th November, all week. If you’re dealing with debt, post an outline of your experience here. Please don’t include identifying details: a specialist debt advisor will follow up with you via PM if they need to know more.

Answers from the specialist debt advisor will be posted up on this thread. The clinic will run for a week; we’ll do our best to provide all answers during the week but, at the latest, by the end of the following week. You can find information on where to go for more help once the clinic has ended here.

Unsure whether or not you need debt advice? Try the 60-second debt test on the StepChange website. By answering a few simple questions, you’ll quickly find out if you’d benefit from free and confidential debt advice.

Important: The advice provided to an individual poster is based only on the information provided by that poster. Advice on this thread is also particular to the individual who has asked for it and is likely to be specific to that person’s situation. A poster may have provided further relevant information by private message which will not appear on this thread.

Important: FCA regulations mean that StepChange is unable to give full debt advice or recommend any debt solutions through the Mumsnet forum. If they feel you’d help from getting a full debt advice session, they’ll mention that in the reply.

Additionally, StepChange can’t give advice on self-employed or business debts. For more help with these, you can talk to fellow charity Business Debtline.

Please feel free to post your questions for the advisor.

Thanks,

MNHQ

Just wanted to say thank you, you helped me clear a 26k debt and the relief I felt at sharing the burden and seeing light at the end of the tunnel was unbelievable.
Thank you thank you

@Mairyhinge

Can I ask, I'm in an Iva with PayPlan, can I talk to step change and maybe go with you instead? Thanks

Hi @Mairyhinge, thanks for posting.

With individual voluntary arrangements (IVA’s) I would not recommend changing your provider mid-IVA unless there are exceptional circumstances as it can be a very complicated process.

If you’re experiencing problems with your IVA, I would suggest speaking to your IVA provider to see how they can help further. If necessary, you could even make a complaint to PayPlan, you can find their complaints process here.

PayPlan IVA will be regulated by the Insolvency Practitioners Association (IPA) who you can also log a complaint with.

In the situation you’re not able to resolve any issues directly with PayPlan, please contact us and we can seek further guidance from our Insolvency Practitioner.

Kind regards,

Kirsty

@Maverick66

Can I ask is there anything can be done about huge negative equity £70,000 in an investment property. I know it's our own fault I really am not in a mental position to take any negative comments. We made a huge error. We invested at height of property boom .....it was to be our pension. Crash happened and now we have this noose around our necks ...I really am at my wit's end.

HI @Maverick66, thanks for posting.

There are several factors which would impact the answer to this question, the main is whether you intend to sell or keep this property.

In the situation you wish to keep the property then there is not much you can do except wait until the property market improves and then consider selling at that point. You mentioned this is an investment property so if you’re renting this property out at the moment, and the rent is covering the mortgage, then as the mortgage reduces and hopefully the property market improves you could be in a much better position in a few years’ time.

On the other hand, if you’re wanting to sell this property because it is currently a financial burden you could first try to sell this yourself or, as a last resort, hand the keys back to the mortgage lender. Any resulting debt will be unsecured and the best way to deal with this will depend on your overall financial circumstances are at the time.

At StepChange we would be able to provide you with tailored help and advice to work out the best way of dealing with any mortgage shortfall. If you would like to speak to one of our expert Debt Advisors, please get in touch.

I hope this helps.

Kirsty

@Slaymill

Re credit cards is it better to completely clear them or pay off regularly ? My DP had an accident last year and I could only pay the minimum. There is just 800 pound left to pay on my card and I have 950 on a loan which should I concentrate on ?

Hi @Slaymill, thanks for posting.

If you’re able to pay off your credit card in full whilst still maintaining your contractual payments it would be worthwhile doing this as you would be able to save money on interest.

Without more information as to the nature of the loan I can’t say for sure which you should concentrate on first. However, I would recommend checking the terms of your loan agreement. If the interest is front loaded onto the loan and you have to pay any early repayment fees, then there is no real benefit in paying this early so I would concentrate on the credit card. On the other hand, if there is monthly interest being added onto the loan and the cost is greater than the interest added on the credit card then I would concentrate on the loan.

Whichever you do decide to pay first make sure you maintain the expected payments on the other line of credit.

I hope this helps.

Kirsty

Hello, I recently started a DMP with yourselves and have been getting a few letters from lenders about defaults etc, should I be worried?

And will my DMP affect my husband's credit rating? We have a joint account and mortgage but no joint credit

Kirsty

Thank you for your response I really appreciate your advice.
The market value of property is £100,000.
We have a mortgage of £170,000 (it was valued at £180,000 at time of purchase)
Realistically it will never reach this value in our lifetime. We just don't know what to do.
I can't face having unsecured debt. We are mid fifties and have 10years left to pay on our 'home' mortgage. It's just a big mess

Hello

We're closing this thread to new queries now.

Thank you so much to everyone who's posted questions this week. And a very big thank you to Rachel, Kirsty and all the StepChange team. We will do our best to get answers for the outstanding questions to post on the thread. Anyone with debt worries can always contact StepChange directly.

Thanks
MNHQ

Hi MNHQ here

Stepchange have kindly answered the last few questions so we've reopened the thread and will paste their answers below.

@BarrenFieldofFucks

Hello, I recently started a DMP with yourselves and have been getting a few letters from lenders about defaults etc, should I be worried?

And will my DMP affect my husband's credit rating? We have a joint account and mortgage but no joint credit

Stepchange says:

Hi there,

Thanks for your message.

Please don’t worry if you’re starting to receive letters from your creditors including any default notices, these are a very normal part of the process.

When you start reducing payments to your creditors through a debt solution such as a debt management plan (DMP) it means that you’re no longer meeting your contractual obligations. At this point your creditors are required to send you reminder letters. After all, if you’d missed a payment in error, you’d want them to let you know to allow you to catch up.

After around three to six months your creditors are obliged to formally terminate the contract which is why you will receive a default notice. This default will stay on your credit file for a period of six years. Once your DMP becomes more established and all creditors have issued their default notice you will find that contact directly from your creditors will start to settle down. You can find more information about default notices on our website here.

Your DMP will not affect your husbands credit rating. As you have a joint mortgage and a joint bank account however you will be financially linked. This means if your partner applies for credit then your file could also be accessed before the lender decides and vice versa.

I hope this helps.

Thanks

Kirsty

And this one:

@Maverick66

Kirsty, Thank you for your response I really appreciate your advice. The market value of property is £100,000. We have a mortgage of £170,000 (it was valued at £180,000 at time of purchase) Realistically it will never reach this value in our lifetime. We just don't know what to do. I can't face having unsecured debt. We are mid fifties and have 10years left to pay on our 'home' mortgage. It's just a big mess

Hi again, thanks for your response.

Until the property is sold there is there is very little that can be done about the negative equity as it is simply a reflection of the current property market versus the amount outstanding on the mortgage which we cannot control. You could try home improvements to increase the value of the property, however, given the amount of negative equity there is no guarantee you will see any return for any further investments made.

The negative equity only really becomes an issue when the property is sold. Unless you intend to sell the property now, if you’re not already, I would suggest looking into renting the property so that you can break even or better on paying the mortgage.

Once the property is sold, whether that’s soon or in a few years, we can certainly give you advice on dealing with any shortfall. Just as a reminder you can find our contact details here.

All the best,

Kirsty

That's all the questions answered so we'll be closing the thread again. Thank you again to Stepchange and everyone who posted questions.

As before, anyone with debt worries can always contact StepChange directly.

Thanks
MNHQ