If you can't make the payment to your Individual Voluntary Arrangement (IVA) this month, don't panic! There may be options for you to cope and get your IVA back on track. This is very common - five or six years is a long time for everything to go smoothly in your life. You do need to talk to your IVA firm,even if you know the problem is very temporary and you can pay a few weeks late. If … [Read more...]
“Will paying off debt improve my credit rating?”
Will your credit score improve if you can clear some debts? The answer is "Yes sometimes!": it will go up if the main problem with your credit score is credit utilisation - you are using too much of your credit card limit; it won't if the debts you will be paying off are defaulted or are in payment arrangements. Your credit score isn't the only thing that matters Experian points … [Read more...]
Will you get a Bankruptcy Restriction Order (BRO)? Does it matter?
Here are some recent questions from people worried about going bankrupt and possible Bankruptcy Restriction Orders (BROs): I gambled a lot but stopped over a year ago. I want to apply for bankruptcy, but will I get a bankruptcy restrictions order? I have credit card debts which I can't pay as I have had to stop work because of a disability. I went bankrupt in 2008 and had a DRO in 2018. Will I … [Read more...]
Has a lender like Next or Barclaycard cut your credit limit?
When a lender like Next or Barclaycard slashes your credit limit, it can feel like an insult, especially when you’ve been managing your account responsibly. Here are some recent stories I have heard, and a look back at some older examples. These aren't the only two lenders that do this! Next cutting limits This has happened to a number of Next customers recently. In one case, a customer … [Read more...]
Affordability refunds from large loans and car finance
The repayments on many loans and car finance are too high to be manageable so people get deeper into debt trying to repay them. When you applied, a lender should have checked a loan would be affordable for you - often they did not check properly and you should never have been given this loan. This article describes how to complain, with a template to use. Many people have won complaints … [Read more...]
Problem overdraft? How to ask your bank for a refund of interest
Have you had big overdraft problems for a long period? You can make an affordability complaint and ask for a refund of overdraft charges if: your overdraft limit was set too high at the start or increased to a level you are unable to clear; or your overdraft usage showed you were in long-term financial distress. For example, being in the overdraft all the time, or using an unauthorised … [Read more...]
How to get refunds from catalogues and credit cards
Have you had a catalogue, credit card or store card where your credit limit was too high? So high that the monthly repayments were hard to manage and you got into more debt? Many people were originally given an OK limit, but the lender kept increasing it too high. You may have a good complaint that the lender was irresponsible in allowing you to borrow so much that the debt was … [Read more...]
Can I get a debt consolidation loan with a bad credit score?
A reader asked: Are there debt consolidation options for really bad credit? I have over £20,000 in debt and I'm not sure how to start getting out of it with a suitable loan or a credit card. A credit card won't work There are some "bad credit rating"0% balance transfer offers at the moment, but they are only for 6 months. And it's likely you will only get a very small credit limit. After … [Read more...]
DROs – what if my pay increases or I get a lump sum of money?
A Debt Relief Order (DRO) is a simple and cheap alternative to bankruptcy if you are renting and have little money to spare each month to repay debts. A DRO lasts for 12 months and during this time you must inform the Official Receiver (OR): if you receive any money or other assets, or if your income increases. If this happens, the OR may 'revoke' your DRO. That is the legal term … [Read more...]
DRO applications – frequently asked questions
A Debt Relief Order (DRO) is often the best debt solution if you have under £50,000 of debt, you are renting and you have hardly any spare money to repay your debts. You don't have to make any payments in a DRO and, after a year, your debts are wiped out. See What is a DRO? for an overview. This looks at the eligibility criteria and how to apply for a DRO. Here are some common questions … [Read more...]
Paying a defaulted account & your credit score
A reader asked if starting to pay a defaulted account will help his credit rating. The simple answer is No! Paying defaulted debts may improve your general credit situation, making it easier for you to get a loan, a mortgage or a credit card in future. That credit score number isn't the only thing that matters! But if you have expensive debts that you are still repaying as normal, such as credit … [Read more...]
Amigo Scheme – final payment of 6.01% will be paid in April 2025
UPDATE March 2025 - final scheme payment announced Amigo has announced the last percentage payment will be 6.01%. Together with the first percentage payment, this takes the total up to 18.51%. The amount you will receive will be a bit less than half the previous percentage payment you received. (If you have received 2 payments, the one from Amigo Loans was an "in full" refund … [Read more...]
“My DMP payment is too high”
A reader asked if it is OK to reduce your debt management payments when you need to? This is a common problem in Debt Management Plans (DMPs). Sometimes your income falls. Often your essential expenses go up faster than your pay does. In debt management, you pay a set amount to the DMP company and they divide it between your creditors. So what happens if you can no longer afford that monthly … [Read more...]
Should I stop debt payments before my DMP starts?
A reader asked: My StepChange DMP will start in 2 months time, 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, It's going to be about £250. She said: I need to admit that this feels life-changing. Why did I not do this last year? I can’t believe I … [Read more...]
What should the default date be & when will it disappear?
A default hurts your credit score, but how long for? That depends on the default date recorded on your credit file. If a the default date is too late, it harms your credit score for longer than necessary. The Key Rule to remember is "A default drops off after 6 years". This always happens, regardless of whether: you have repaid it in full you made a partial settlement you are still … [Read more...]
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