Author Topic: guidance please  (Read 3105 times)

swiss

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guidance please
« on: Apr 04, 2011, 10:34:55 AM »
Hi
   brief summary
 
      my partner has approx 22k debt on various credit cards, she has direct debits set up but these are barely meeting the interest payments, i initially done some research and gave her number to a company called 123 debt solutions who have contacted her today offering support,and yes i know that they can all be nice over a phone, is there any feedback on this company?, they did not detail their fee's,  after the initial search i then came across this forum which i found very informative and have also been on cccs as I'm led to believe this is charity based, the information that i got back seemed to imply that this debt would be cleared in 3 years 6 months, i want to support her as much as possible and would take on some of her debt but realise this would then affect both of us as i already cover all household bills etc, would be a fruitless act
 
couple of questions
 
i understand that her credit scoring will be affected for this term, is this correct?
when the debts have been settled will this still show as a negative on her credit report?
 
 
 
any advice would be greatly appreciated as this is now affecting us as a couple

Debt Support Trust

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Re: guidance please
« Reply #1 on: Apr 04, 2011, 11:05:22 AM »
Hi swiss,
 
The first thing you need to ask this company is if they keep the first or even first two payments as an admin charge. They need to inform you of this. They will then charge you a set fee every month ranging from 15%-30% of the money that is paid in monthly.
 
CCCS are a Charity who deal with DMP or even IVA's.If based in England.
 
Being in a plan will affect her credit rating, the creditors will normally put a default notice on to credit file.
When debts are settled it will show as Satisfied but will stay on file for 6 years once put on.
 
Regarding you taken on some of the debt why not call the CCCS and see what best option is and you could give some money every month to contribute to the solution. The more you pay in then the quicker debt is paid off.
 
In a DMP the CCCS will attempt to get Interest and Charges frozen but it is not guaranteed. The creditors can take action against your partner at any time.
 
Hope this is enough information for you swiss.
 
Good Luck
 
Qualified Debt Adviser
www.debtsupporttrust.org.uk

swiss

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Re: guidance please
« Reply #2 on: Apr 04, 2011, 11:11:19 AM »
thanks
     this is food for thought

Debt Support Trust

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Re: guidance please
« Reply #3 on: Apr 04, 2011, 11:17:18 AM »
hi swiss,
 
No problem
 
Good Luck
Qualified Debt Adviser
www.debtsupporttrust.org.uk

swiss

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Re: guidance please
« Reply #4 on: Apr 04, 2011, 01:03:22 PM »
Hi
   is there a process where by your credit scoring is protected? whilst still clearing the debt
 
     thanks

Debt Support Trust

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Re: guidance please
« Reply #5 on: Apr 04, 2011, 02:08:33 PM »
Hi swiss,
 
There is nothing to protect it as such if there is missed payments etc. As this would result in defaults on credit score
 
The only way it would work like that if the debt is paid every month when it is due and it is the full contractual payment.
 
 
Qualified Debt Adviser
www.debtsupporttrust.org.uk

James Falla

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Re: guidance please
« Reply #6 on: Apr 05, 2011, 03:02:14 PM »
Hi Swiss
 
Your partner has a number of options for resolving her debts problem. These could include a debt management plan (DMP) or individual voluntary arrangement (IVA). You or she really should speak to an expert who can help her understand her financial situation, the solution best suited to her and the pros and cons of doing it.
 
Ultimately, if she can afford to maintan her monthly payments she should do so as this is the best way to maintain her good credit record. However, if this is just not possible, she could then consider a debt management solution.
 
If she goes down this route, then as has already been highlighted, her credit rating will be affected. With an IVA this will be for 6 years but with a DMP, it will not really start to get better until she has paid or settled all of her debts which could take longer than 6 years depending on how much she can afford to pay.
 
If you feel a debt solution is the right way to go I would always advise speaking to 2-3 different providers and choosing to work with the one you feel most comfortable with.
Debt Expert & Author
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andytheplumber

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Re: guidance please
« Reply #7 on: Apr 06, 2011, 05:08:25 AM »
I know a bit about this having been through it and managed to get it sorted. [** sorry, no personal contact invitations allowed **] if you want advice

andytheplumber

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Re: guidance please
« Reply #8 on: Apr 06, 2011, 05:11:42 AM »
And don't go to these debt solutions companies. That will make the problem worse, not better

swiss

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Re: guidance please
« Reply #9 on: Apr 06, 2011, 07:13:05 AM »
  thanks for all your replies
        we have been intouch with CCCS and had a financial breakdown, she currently owes 22.5K and can afford to pay £600 pcm to clear these debts, which will take approx 3 years to clear,
 
  again this is based on the creditors freezing the interest, which i have been led to believe is not a guarantee,
 
i don't want to go down the route of an IVA as this will impact us in later life, i.e. getting a mortgage and such
 
so if i'm right in thinking going down the route of a DMP would only affect credit scoring until debt's are settled.
 
 i have also looked into offering settlements to some of the creditors just to relieve the pressure, but this is dependant on me selling my cars and downgrading.
 
 again thankyou for all advice it is greatly received, and can now see that there is some light at the end of the tunnel, (though it is a long one) :)

shocksoc335

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Re: guidance please
« Reply #10 on: Apr 06, 2011, 09:22:32 AM »
No Swiss entering into a DMP will mean your partner has missed payments on her debts and possibly received a default notice these will remain on her credit reference file for 6 years from date they were entered.

If she has an awkward creditor they could decide to sue and again this will impact on credit reference file.

If she hasn't missed any payments and has £600pcm sound as though a financial solution may be best option if you want to obtain a mortgage etc in the future?

Shocksoc335
Supporting 'Practical Debt Advice' by Elizabeth Mc

swiss

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Re: guidance please
« Reply #11 on: Apr 06, 2011, 09:56:42 AM »
Shocksoc335
               I'm not sure what you mean by a financial solution,
 
no payments have been missed or late, but currently paying 600 pcm and this is just meeting minimum payment, have moved some of the accounts to interest free for a period of time but these have now expired and bar 1 all are accumulating interest, one in particular at 29%,
 
also looked into personal loans at lower rates of interest but unfortunately this has been near impossible
 
want to do what is best for her and protect her credit scoring but at the same time clear debt in a timely manner
 
   Swiss

Debt Support Trust

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Re: guidance please
« Reply #12 on: Apr 06, 2011, 10:43:56 AM »
Hi swiss,
 
I am afraid that if you look at a DMP or even IVA then credit rating will be affected.
 
James Falla did point this out when he said your rating will not improve until the debt has been paid in full whilst in a DMP. The creditors will more than likely put on a default notice on totheir credit file, it is up to each company how they deal with it.
 
I know you are trying to do what is best for your partner and I noticed that you are looking to sell some cars to clear some of the debt.
 
Good luck swiss
 
Andy
DST
Qualified Debt Adviser
www.debtsupporttrust.org.uk

swiss

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Re: guidance please
« Reply #13 on: Apr 06, 2011, 10:56:12 AM »
now i'm confused
       
         i know i sound like an old record and can only apologise for this,
 
  is there any other alternatives based on the information i've given?
  is additional information required?
 
   Swiss
 
 

James Falla

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Re: guidance please
« Reply #14 on: Apr 06, 2011, 11:51:05 AM »
Hi Swiss
 
Sorry that you feel confused. My understanding is that your partner has £22.5k of debt and can afford to pay £600/mth in repayments. I also understand that this £600/mth enables them to meet the minimum payments each month but the debt does not seem to be coming down.
 
I also understand that your primary concern is that with any solution you employ, your partner's credit rating should not be affected as you/they may want to take a mortgage in the future.
 
If your partner considers either an IVA or DMP, then their credit rating will certainly be negatively affected for at least 6 years which ever solution they choose. If they go into a DMP, at least one or perhaps all of the creditors will put a default notice against them. This will remain on their credit file for 6 years and negatively affect their credit rating for 6 years whether the debt has been paid off or not. They negative affects of a DMP could even last longer if the debt still remains unpaid after 6 years. This is why an IVA gives some advantage as you know the credit rating will be clear after 6 years.
 
Given this, the only way to ensure that your partner's credit rating is not affected is for them not to default on any payments. As such, the only option to maintain this is try to move balances around using zero percent transfer deals or with consolidation. However, I understand that this is not always possible.
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