Mrs X was happy when Halifax told her in November 2022 that they were cutting the interest rate on her credit card - down from 32% to 15%. But just two months later Halifax sent another letter saying she must make higher "Recommended Payments" or she can't use the card any more. She says: Halifax want me to pay at least £102 a month, about £20 a month more than the minimum. They say this … [Read more...]
4 steps to take if you lose your job
A reader asks: Help! I have just been made redundant and I don't know how I am going manage, especially as we have debts. I'm only getting a few weeks redundancy pay. What should I do? A lot of firms are closing or going under in 2023. Your employment rights If your firm has just closed suddenly, you may be worried about: getting paid for the weeks you have already worked; paid for … [Read more...]
Will an affordability claim hurt my credit record, and other questions
People often ask what happens to their credit score if they make a complaint. And what happens if they still owe a balance on the account. Here are some typical questions: " Lloyds increased my overdraft limit several times a few years ago when I had a gambling problem. But I have recovered and am hoping to get a mortgage soon. I don't want to complain if it will it harm my credit score, which is … [Read more...]
Maxed out credit cards & only able to pay the minimum
"I have three credit cards, all maxed out. I am only paying the minimum amounts each month as I can't afford more. What are my options as this will take forever and cost a lot in interest?" A lot of people are in this situation with cost of living price rises leaving you with no spare money to make overpayments. Especially if a 0% balance transfer has ended and you can't get another … [Read more...]
SafetyNet Credit goes into administration
UPDATE - in March 2024 the administrators announced they are no longer collecting any payments for the remaining loan balances. Also any more affordability complaints must made in the next few weeks. See SafetyNet & Tappily loans are written off for details. Indigo Michael Limited (IML) went into administration on 9 January 2023. It had two lending brands - SafetyNet Credit … [Read more...]
Is Santander routinely rejecting overdraft complaints?
A reader used my overdraft affordability complaint template letter to ask Santander for a refund: Santander are refunding 5, nearly 6, years worth of fees and interest and 8%. It's over £3.5k... amazing! This pays off my overdraft completely with spare and the overdraft will be removed. That was a "full refund" - the maximum she could have got from the Financial Ombudsman (FOS). She was very … [Read more...]
After a fixed rate mortgage ends, fix again? For how long?
If your fixed mortgage has ended, or will soon, you could face a large increase in your mortgage payments. Most mortgages revert to their lender's Standard Variable Rate (SVR) when a fix ends. Some lenders use a different term, such as "Follow On Rate", but SVR is the most common. In 2023, the average SVR is 7.3% - many are much more. Millions of people are paying the SVR and most of them … [Read more...]
The new DRO hubs start in February – how will they work?
MaPS announced in November that it had signed contracts for debt services that will be effective from 1 February 2023. The two contracts for Debt Relief Order (DRO) hubs have been awarded to: Citizens Advice; and Gregory Pennington. There is a lot of uncertainty in the debt advice community about how these new DRO hubs will work in practice. With less than two months before they start, … [Read more...]
The better alternatives to high cost loans
It's become harder to get a payday loan and other high cost credit in 2022. Many lenders have gone under because of having to pay refunds for affordability complaints. Others stopped lending or cut back on it because of Covid or because of the cost of living crisis this year. So where can you go if you need credit and you know you will be refused by high street banks? And if you realise … [Read more...]
What happens at the end of your IVA? How long until it’s all finished?
If you are in the last few months of your IVA, you will be looking forward to making that last payment. It may feel a lot like getting to the finishing line of a marathon - and you may not be running so much as staggering over it. But when should you cancel your standing order? How long does it take to get your completion certificate? And when exactly are your debts written off, and how long … [Read more...]
QIS is the second large IVA firm to go under in 2022
Quality Insolvency Services (QIS) went into administration on 23 November 2022. They are one of the larger IVA firms. It is estimated that there may be about 13,500 IVAs currently in progress at QIS and they were 5th in the Insolvency Service's table of IVAs registered in 2021: 1 Creditfix 17,758 21.90% 2 The Insolvency Group 10,962 13.5% 3 Hanover … [Read more...]
Improving your credit score after an IVA
An IVA wrecks your credit record for at least six years. It can be longer than six years if your IVA doesn't complete within the 6 years, perhaps because you have had payment breaks. After your IVA finishes, in theory you don't need to do anything and all the problems will disappear from your record after the six year point... But it is important to check your IVA firm has closed down your … [Read more...]
What to do if Full & Final settlement offer is rejected?
A reader asked what she should do as her reasonable Full & Final settlement offer had been rejected. It's going to seem obvious, but the creditor rejected the offer because it didn't seem reasonable to them. You may think "I paid off the amount I borrowed ages ago, their interest is too high" or "They probably bought this debt for pennies, so they should be happy to accept 20%" but … [Read more...]
Disability benefits – do you have to use them to pay your debts?
Disability benefits such as Personal Independence Payment (PIP), Disability Living Allowance (DLA), and Attendance Allowance (AA) are meant to cover the extra expenses you have because of the disability. So do you have to use this money to repay debts? To someone who isn't disabled, your benefits may look high - but you have a lot of costs other people don't have. In 2022 this is a real … [Read more...]
Personal Insolvency – the urgent need for change
The Insolvency Service issued a Call For Evidence (CfE) in July 2022, asking a wide range of questions about personal insolvency in England and Wales: The purpose of this document is to seek evidence that will help inform the Government on whether the current personal insolvency framework is still fit for purpose and, if not, what reforms are needed. The CfE started by saying: What should be … [Read more...]
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