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**nightwatch** · 5 December 2018, 18:40

Originally posted by Exitsign View Post

Hi there, I’ve just joined the forum as I’m looking for a way through my debt and am seriously considering a DMP after I did a debt help check on StepChange and they advised one. But I have some questions so am hoping to get answers here. Apologies in advance for all the questions!

I have £25k of credit card debt, I haven’t missed any payments and most of it is in interest free balance transfers but they’re going up instead of down so I need get help to get control.

StepChange said I could afford £132 a month to pay them off and it would take 16 years. As mad as it sounds, I’d be fine with that if it means I can stop worrying about it, but I can pay them off earlier than that because I do have another irregular income which is quite lucrative. I host foreign students and get about £550 a fortnight for it, I would want to pay this towards the debt but have seen advice saying you shouldn’t pay lump sums as creditors will think you’re earning more and put the payments up. What would I do about that? I have no idea how many students I will get so can’t list it as an income, I’m wondering if I would squirrel it under a mattress till I had a huge amount to pay it off, but do Stepchange look at your bank statements?

Also, I have insurances which are very important to me, one being income protection which costs £38 a month. I was diagnosed with cancer earlier in the year, I’ve finished the main treatment and am back at work now but the fear is that it will come back and I need this insurance in case it does. Will I be able to keep that, and my life/mortgage insurance?

I have a bank account with Nationwide which costs about £12 a month but comes with road recovery and mobile phone protection, as well as other benefits. It has a £200 overdraft which I’ve never used and I don’t have any debt with them, will I be forced to close this account to set up a different basic one?

I have a £50k mortgage on a £500k house, is my house safe with a DMP? I’m a single parent and want to keep it for my kids so I don’t want to do anything that puts it at risk.

When does does your credit record recover, is it 6 years after the DMP starts or 6 years after the debts are paid off? I don’t ever want debt again but if I can’t get a mortgage for up to 22 years that’s a problem I won’t be wanting to remortgage for at least 10 years because I have mortgage protection insurance, which I doubt would be easy to get again after cancer, so it looks like I’m keeping this one whatever happens.

Last one... if I got ill again and got my life insurance pay out would I be able to pay all the debts off in one go so it’s not hanging around for my kids?

Sorry for the long post and all the questions, I really appreciate any answers. Thanks

Hiya, lets start by doing one thing at a time.

I have £25k of credit card debt, I haven’t missed any payments and most of it is in interest free balance transfers but they’re going up instead of down so I need get help to get control.
who are they with? are any with the same bank that you have your current account with? When were they taken out?

Also, I have insurances which are very important to me, one being income protection which costs £38 a month. I was diagnosed with cancer earlier in the year, I’ve finished the main treatment and am back at work now but the fear is that it will come back and I need this insurance in case it does. Will I be able to keep that, and my life/mortgage insurance?

Did Stepchange not take them into account when you contacted them. they should of been included in your outgoings
I have a £50k mortgage on a £500k house, is my house safe with a DMP? I’m a single parent and want to keep it for my kids so I don’t want to do anything that puts it at risk.

that is a little difficult to answer, Normaly if you are making payments they tend to leave you alone, some will phone you and ask for bigger payments you have to stand your ground,
for them to do anything they 1st have to start court action, you then have a number of options, but they do have to have a good reason for doing it, but it would not be an overnight action it takes a while , IF they do threaten you with court action please post back up here

I have a bank account with Nationwide which costs about £12 a month but comes with road recovery and mobile phone protection, as well as other benefits. It has a £200 overdraft which I’ve never used and I don’t have any debt with them, will I be forced to close this account to set up a different basic one?

As long as you have no debts with the Nationwide you can keep that account, you are only advised to change accounts if you have a debt with the same bank where your main account is, they have a right if set off, which means they can take money from your bank account to pay of your debt with them.

When does does your credit record recover, is it 6 years after the DMP starts or 6 years after the debts are paid off?

it depends on the creditor,If you enter a DMP some will mark your file as DM/ RP it will remain on file till the debt is cleared,
If you stop payments they will eventualy mark as defaulted, the default will remain on your file for 6 years, it will then dissapear from your file wether it has been paid off or not, a debt can only be defaulted once.

if you are thinking of a DMP , it may be an Idea to stop payments, get the accounts defaulted, the accounts will then be passed to a DCA ( Debt Collection Agency)and then either try for a Full and final payment with them or start an Arrangement with them

Last one... if I got ill again and got my life insurance pay out would I be able to pay all the debts off in one go so it’s not hanging around for my kids?

you can do what you like with your insurance pay out, but I would be thinking about trying for a Full and final payment, for less than you owe

StepChange said I could afford £132 a month to pay them off and it would take 16 years. As mad as it sounds, I’d be fine with that if it means I can stop worrying about it, but I can pay them off earlier than that because I do have another irregular income which is quite lucrative. I host foreign students and get about £550 a fortnight for it, I would want to pay this towards the debt but have seen advice saying you shouldn’t pay lump sums as creditors will think you’re earning more and put the payments up. What would I do about that? I have no idea how many students I will get so can’t list it as an income, I’m wondering if I would squirrel it under a mattress till I had a huge amount to pay it off, but do Stepchange look at your bank statements?

yes i would keep it to oneside, then you could if you wished, offer a reduced settlement to one of the accounts, saying a family member or friend has offered it to you
Step change may want to see a bank statement ( i don't know to be honest) but you will have to fill in an Income and expeniture form , they pass it to your creditors to show what you can afford

I hope this is of some use to you. any more questions please ask.

NW x

PS welcome to AAD

**Exitsign** · 5 December 2018, 20:29

Thank you for your reply, I really appreciate it.

I have cards with Santander, Tesco, MBNA, Halifax and RBS. I have a Santander current account so will lose that but have the Nationwide to keep hold of. I also have a Barclaycard with zero balance, I was hoping to do 0% balance transfer but they’re not offering it, that is probably a good thing as it means I’ve got to take my head out of the sand now rather than later! They are all post 2007 if that’s why you’re asking.

Re the insurances, I’ve only done a debt remedy check online and requested a DMP information pack, I’ve not spoken to StepChange yet but I’m now considering doing a self managed DMP after looking around for more information. The insurance would benefit the creditors if I were to get ill again as I’d be able to continue payments throughout treatment.

I don’t see any other way out other than a DMP, I don’t want to live the rest of my life worrying about it so have to do something. The decision for me I think is StepChange or self managed, with the students income taken into account I’m probably better off going self managed. I’m going to thoroughly explore both avenues and get some advice from StepChange, but the worry with them is that I’ve come across posts from people saying they were still being charged interest but were unaware and that SC wouldn’t act to change that. It’s sll so scary

**nightwatch** · 6 December 2018, 09:12

Step change are only there to take pressure off when setting up a repayment plan with your creditors. They do not deal with problems that may arise. That is up to you.
They are partially funded by the finance industry so don't deal with reduced settlements.

Some of your creditors may not accept the payment offered and want more. SC will expect you to deal with that . They will also expect you to negotiate the stopping of any interest. so self managed may be best option.

just be prepared for many phone calls from all the company's concerned. Also lots of letters telling you they MAY do this or that, stick to what you you have told them you can pay , as for the calls if you fail the security question they can't ask anything further. Tell them you want all communication in writing only.

If you do go self managed and send an Income and expenditure form to the card company's, they may ask for a bank statement to prove what you are saying is true. You do not have to provide one

**Warwick65** · 6 December 2018, 12:55

Something that struck me was you said that although these cards were interest free the debt keeps growing. This would suggest to me you are spending more than you are earning at the moment. I know that may sound really obvious but I think you really need to think about this. Have you also been earning the money from hosting overseas students or is that just at a particular time of year?( I know for example there are many summer schools where students come to pass their English language requirements)

You are spending more than you earn yet step change say you can pay off an amount each month- where is this coming from (maybe its the sum of what you are paying your credit cards)

I am glad your first cycle of treatment is over, is the insurance critical illness ? If so, why did it not pay out on diagnosis

I know, in general once in a DMP is in place you should be left alone until review time BUT you have a lot of equity in your home so there may be a temptation for some creditors to come after you more aggressively. So while what NW has said about not having to provide detailed bank statements etc is perfectly true, it maybe they think you are hiding something. Sometime, my own view is to try and 'play the game' and meet them somewhere in the middle and provide a little of what they ask for (as long as it supports your case)

I am guessing all these cards are relatively recent, am I correct or are they cards you have had for years which have offered you interest free periods - I know my barclaycard keep writing to me offering interest free balance transfers

**Exitsign** · 6 December 2018, 14:20

I would be happy to show them bank statements to support my case, I just wondered how StepChange would view the whole thing. I wouldn’t want to hide it as an income because I’d like to put it towards the debt, but at the same time it’s be no means guaranteed or regular so can’t be included. I haven’t hosted any students for almost a year, it is quite seasonal and I had some booked in for April and June but had to cancel as my treatment began then, obviously they stopped sending them till I said my treatment was finished in October but the busy season had ended then. This hasn’t helped my situation at all. I have some booked for a week in January though so it’s completely random when I get them and once that money is coming in again it will make a huge difference.

I do earn enough to cover everything but not all of the balances are completely 0% transfer, I pay £400 a month to credit cards and £150 of that is interest. This is why the balance is going up because I go into the credit card when something big comes up like car insurance, while I’m paying the £400 I have no means of putting any by for stuff like that. That sort of thing was included in the budgeting form so by paying £132 I’d have the extra to put aside for the things that end up on the credit card now. Also, I have to admit, while the cancer thing was going on I decided I had enough to worry about and kind of pretended this wasn’t even happening, stupid I know, but I did have enough to worry about. It’s been a crap year, I’m hoping I can have a less worrying one next year by getting this stuff straightened out. I don’t know how likely any creditors are to accept payments of £25 towards a £5000 debt though, seems unlikely as the debt would in theory go on for 16 years. And yes, my house is my biggest fear in case it’s seen as an opportunity to get the money back quick. I need to keep it more than ever so it’s safe for my kids whatever happens. I can’t remortgage and I need to keep the insurances I’ve got as that’s the only way I can pass it on to them without a inheritance tax bill (that, and the debts, would be covered with my life insurance). I don’t have critical illness, I couldn’t afford that, so it’s a very sad day when you realise the easiest way out of this is a terminal diagnosis

I wonder if an explanation of all this to the creditors, that I’ve been ill and that they will get their money whatever happens, would help?

**Exitsign** · 6 December 2018, 14:27

I don’t think I’ll be alive in 16 years, they will get their money before then whatever happens. I’m just scared they’re going to completely ruin whatever years I do have. I feel like I’ve been given a second chance to struggle rather than live.

**nightwatch** · 6 December 2018, 18:12

The money from the students can't be classed as income as it is not some thing you get every month, so you could put it to one side to save up for emergencys,

OK your main panic seems to be the house,
no one has a crystal ball to tell you what the account owners MAY do, even SC can't say your creditors won't try for a charging order on it, BUT, they have to have a reason for doing it,

when you write to them at the begining offering a repayment plan, you should tell them of your illness.this is when you ask them to stop all interest and charges to help you clear the debts

If they accept your offer of reduced payments, they will ask for a review every 3/6 months, you tell them nothing has changed,
if they refuse and you have sent all information they asked for, you ask why they won't accept it But, still send the ammount offered every month,

while you are paying most will be happy as they are receiving something,IF you stop paying for any reason they will contact you asking what is going on,they must show that they have tried contacting you to arrange payments,
they should not go straight to court as the court will want to know why they havn't tried to help in other ways

they have to follow certain procedures before they go to court, even then they can't go straight for a charging order, You have to get a CCJ first and then not pay it before they can go back to court to do anything else. you can apply through the court to take mediation, where you explain what the problem is and if you can offer xx ammount, they will then speak to the company to try and reach an agreement, there are also other options but it will take to long to explain on a post that is asking "what if"

in a nut shell IF, any want to take court action it will take time and you have lots of places to get help and information , 1st call here.

Now take you time to read the information SC send, decide what you want to do, Take that 1st massive step to control your debts.

PS, we have paid off our mortgage, £100k of debt, in the last 6 years not one have taken court action. threatened but not taken.

Keep that in mind, stress is not good for you.

Best wishes NW

**Exitsign** · 6 December 2018, 19:16

No, stress is not good at all. Thank you for all the information, it’s really helpful. And well done for paying all that off, must have been a total relief. It also shows people like me that there IS light at the end of the tunnel

**Warwick65** · 6 December 2018, 22:13

Hi again
I hope you didn’t take my questions in anything other than me trying to get a fuller picture . Without that fuller picture I might put my size 9s in it and say something inappropriate.

One really rather important question, are these old cards that have given you offers or new cards ? If older can you remember when (approx) they were opened.

By the way, I had about 50k of debt , almost all is statute barred now and one did take me to court but with the help of Diana Mayhew and Joanna Connolly, we gave them a bloody nose.

Incidentally i I heard a story where mediation was set at £1 a month. Frankly the world may have ended before that one was paid off. Try not to worry, it is quite empowering to take back control.
Be positive about your cancer treatment and look after yourself

**Exitsign** · 7 December 2018, 04:08

Thank you Warwick. I appreciate your questions and advice. All of the cards are post 2007, probably started around 2011 but some later, most recent would be about 3 years ago. I’ll definitely feel better when I’ve got some control, and I am usually very positive about the cancer treatment but also quite aware that there are no guarantees so I take nothing for granted. Hopefully in 16 years I’ll be breathing a sigh of relief that I’d dug myself out of this mess years ago!

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