Debt Archives

Getting out of debt

Practical articles about the different debt options, which might work for you and different ways of dealing with creditors

“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...]

“Persistent debt – Halifax want me to make higher credit card payments”

Mrs X was happy when Halifax told her 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 will clear the … [Read more...]

What to do if a creditor won’t freeze interest

What can you do if a creditor is still adding interest when they have been asked to stop? This can happen if you have a payment arrangement. It also sometimes happens, but much more rarely, in a Debt Management Plan (DMP). Most creditors do freeze interest if you have supplied a reasonable Income & Expenditure Statement. If you are in a DMP, your DMP firm will have sent the creditor … [Read more...]

DMP FAQs – if you are worried about a DMP, read this

A reader said she was scared about starting a Debt Management Plan (DMP). She was worried her creditors might not freeze interest or could take her to court. Another reader asked if he can get a new mortgage fix if he is in a DMP I thought it would be useful to look at the most common questions I get asked about DMPs. Setting up a DMP Will I get lots of phone calls from creditors? You … [Read more...]

Can’t pay your bills & debts? What help can you get?

What help can you get if you can't pay your important bills and debts? If you don't think you can manage to pay everything, this article looks at your options for priority and nonpriority debts. And how to get help, with debts and with benefits. Get a budget & know what is top priority When there isn’t enough money to pay for everything, you have to make choices. It’s important to … [Read more...]

Debts – why, how & when to ask for the CCA agreement

The Consumer Credit Act (CCA) gives you the right to be sent a copy of your credit agreement and a statement of your account for most loans, credit cards, catalogues, store cards and Hire Purchase agreements. CCA agreements are important! If a creditor can't find it then: you can't get a CCJ for the debt; and you may decide to stop paying the debt. Sometimes asking for a CCA … [Read more...]

“Will a credit builder card improve my score?”

Four million people in Britain have a credit card specifically aimed at people with a bad credit rating. These cards have interest rates of 30-70%. A standard interest rate on a normal credit card is about 20-28%. Brands include Vanquis, Capital One, Aqua, Ocean, Marbles, Zable and 118. Some normal credit card lenders like Barclaycard have a specific bad credit product available. They are all … [Read more...]

7 ways to speed up a DMP so it finishes sooner

A reader asked: I'm being told a DMP would take more than 10 years. Is that too long - I hope my situation will improve? Ten years is a long time. But lots of things can happen during a Debt Management Plan (DMP) which will change the time it may take. Here are seven ways the DMP could be speeded up - not all of them may apply to you. 1. No DMP fees If the DMP firm you are talking to charges … [Read more...]