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...]
DROs – what if you have a car on HP?
You can't have a Debt Relief Order (DRO) if you own a car that is worth more than £4,000. But what happens if the car is on HP? A reader, Mrs T, asked: I am drowning in debts and only just under the total DRO debt limit. I have been advised that a DRO would be my best option. However I didn't tell the debt adviser that I have a car on HP which I still owe £7k as this would take me over the … [Read more...]
Section 13A – a little-known way to get Council Tax written off
Councils in England and Wales can reduce or write off your council tax under Section 13A (1)(c) of the Local Government Finance Act 1992. This has been called "the best-kept secret in council tax law". These Section 13A write-offs can be used if your house is uninhabitable because of flooding or fire. But you can also get a write-off if you have no money to pay your council tax after paying for … [Read more...]
Car finance affordability – what you get if you win a complaint
Refunds for unaffordable credit are usually simple - you get a refund of interest paid and, if you still have the account, only have to repay what you borrowed with no added interest. And your credit record is cleaned. That is the basis for car finance affordability complaints too. But here there is an extra factor - what happens to the car? When you make a car finance payment, some of it is … [Read more...]
Can you stop using a credit card? There’s only one way to find out!
If you are serious about paying off your debt, you have to stop using it. Until your debt stops increasing, you can't make a realistic plan to clear your current debt. Trying to repay a credit card or catalogue when you are still using it is like trying to run a bath when you haven't put the plug in... Many people say they could if they wanted to, but it's just convenient. Are you sure? … [Read more...]
Were you sold a car on unaffordable finance?
Was your car finance unaffordable? The FCA, who regulates car finance lenders. and the Financial Ombudsman (FOS) say: a loan is only affordable if you can make the repayments on time, without hardship and still meeting your other commitments. That means you need to be able to pay all your other debts, your normal household bills and expenses as well as the new car loan payments. You may … [Read more...]
“Can I switch from a Direct Debit to paying for energy by a monthly bill?”
A lot of people are asking about switching to paying a monthly energy bill instead of having a Direct Debit. Decided if they try to increase my direct debit to anything I can't afford I will tell them to cancel my Direct Debit and send me a paper bill. I will give weekly meter readings and pay for my usage AFTER I've used it, not a monthly amount ahead as a DD. Power companies hate when they … [Read more...]
Should I stop debt payments before my DMP starts?
A reader asked in mid August 2022: My StepChange DMP will start in October. Do I have to make the payments to my creditors in September? Because it's going to be a real struggle. Could I offer them less? I asked what her StepChange monthly payment will be, and whether that has taken into account rising energy prices in October 2022? It's going to be about £250. She said: I need to admit that … [Read more...]
Morses Club – you can still make complaints (August 2022)
UPDATE - in November 2023 the Morses Scheme failed - see Morses Club goes under – in administration for details In July 2022, Morses Club announced it was looking into a Scheme of Arrangement to cap affordability complaint refunds. At that point there was no mention of any change to its complaint handling, see my article Morses considers Scheme to cut refunds to customers. Morses … [Read more...]
Ofgem says don’t cancel direct debits – but has no good alternatives
Ofgem says you shouldn't cancel the direct debit to your energy supplier. This is in response to the Don't Pay UK campaign, which is suggesting supporters cancel their energy direct debits on October 1st: It's simple: we are demanding a reduction of energy bills to an affordable level. Our leverage is that we will gather a million people to pledge not to pay if the government goes ahead with … [Read more...]
Should you cancel your direct debit if you can’t pay your energy bill?
The situation in August 2022 The average UK household annual energy bill is now expected to jump 70% to £3,358 in October. Cornwall Insight predicts that in January 2023 there will be a further increase to about £3,600. That's almost treble what it was at the start of this year. The government's current help with energy bills, including £400 off everyone's electric bill this winter, and … [Read more...]
The Money Platform takes payments for loans already repaid
Some Money Platform customers had a payment taken from their bank account unexpectedly and incorrectly on 22 July 2022. This is what one customer said: Shocking from The Money Platform. They’ve made a massive cock up and taken money out of peoples accounts on Friday for loans they had already paid in March. She wasn't the only one. This morning there were over 25 people saying similar things … [Read more...]
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