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...]
Getting out of debt
Practical articles about the different debt options, which might work for you and different ways of dealing with creditors
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...]
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...]
Ofgem names energy firms who must improve their Direct Debit setting
Ofgem has been investigating how energy suppliers set customers' direct debits. The energy regulator has found: more than 7 million consumers on a Standard Variable Tariff (SVT) had their direct debits increased between February and April 2022; direct debits went up 62% on average; half a million households had an increase of more than 100%. Ofgem has told 6 energy suppliers to take … [Read more...]
Help with IVAs if you can’t pay because of the cost of living
Many people in an IVA are currently struggling because of the large rises in bills and prices in 2022. The Insolvency Service has now issued Guidance to support the IVA protocol. (That is confusingly laid out - look for the section headed 60) Guidance to support the IVA protocol for existing protocol compliant IVAs: 26 June 2022.) This sets out what extra help IVA firms should provide … [Read more...]
“My debt has been sold, just when I thought I was out of the woods”
A reader asked: I had an old credit card debt from Vanquis, the last payment was made in 2018. It dropped off my credit file last week. I have just received a letter from Lowell saying they have bought the debt and have to contact them. Will I have to pay, just as I thought I was getting out of the woods with old debt? If I do, will it reappear on my credit file? At the time I was in a … [Read more...]
Defaults – have you been given bad information?
In the last week, three readers have queried what they have been told about defaults and their credit record: Ms A: I have debts that have been defaulted for about 4 years. I have set up a debt management plan and Payplan say that if my debts are sold then the new debt company can place a brand new default on the loan and the default date would be when the new debt company (not the originator) … [Read more...]
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