A reader asked if he should offer a £1 a month token payment to his debts, wondering if his creditors would ever accept it. The simple answer is that you should make token payments offers: TO non priority debts WHEN it is all you can afford. BUT if you don't expect your situation will improve soon, you may have better debt options. In 2022 millions of people can't afford the normal debt … [Read more...]
A reader asks ...
Readers have asked a huge variety of questions in the comments below Debt Camel articles or on Instagram. From credit ratings and mortgages to payday loan refunds and IVAs...
Some of them needed such long replies that I have turned them into the articles that are gathered here.
A reader asked if she should sign up to Experian's Boost. Are any disadvantages? Would it really help her credit score? Experian's new Boost facility was introduced in the UK in November 2020: it can increase your Experian Credit Score by a maximum of 101 points; it is set up so it can never harm your credit score. Hundreds of thousands of people have used it. Let's see how it … [Read more...]
Mr M asked: I am trying to build my credit score but feel I am getting nowhere. I had 2 accounts in default which I paid about 1 year ago. My bills are paid on time. I have a Capital One credit card with a £200 limit. I always get £50 worth of petrol on the last Friday of every month and pay it manually a few days later. But I got an email from Credit Karma saying "When your last report came … [Read more...]
A reader asked about a friend who is looking at an Individual Voluntary Arrangement (IVA): Mr X is 23 and owes just over 10k on various credit cards and loans. He earns £20k and hopes to get a £10k bonus this year. The IVA firm says the bonus doesn’t matter as it's not guaranteed. But won't the IVA take half of it? Would it be better if he got a job with a larger basic salary and no bonus, or … [Read more...]
A reader asked: "A friend said not to pay my defaulted debts off but save money towards a deposit for a mortgage - is this a good idea?" It's often unwise to rely on friends for debt advice... They may be guessing, their situation may have been quite different from yours, or they may be assuming what happened to them years ago is still useful today. And in this case, the friend may know … [Read more...]
Abby is pregnant and worried she won't be able to afford the monthly IVA payments: My IVA was set up at the start of 2020. There are four debts in it, totalling £13,000. All the debts date from a previous relationship, my new partner doesn't have a debt problem. My IVA payments are £90 a month. I've managed so far, but I now need to buy things for the baby - cot, buggy etc. We are renting and … [Read more...]
A reader asked: I have fairly recently got an Aqua card with a limit of £1,900. Credit Karma suggests this is low and a higher limit (with low utilisation) reflects well with lenders. I’ve only just had a credit limit with Aqua so can't get another one soon. But I could be added as a secondary cardholder on my partner’s credit card. This is her idea – she has a limit of almost £10k. She never … [Read more...]
A reader asked about applying for a mortgage when she is in a Debt Management Plan (DMP): "I have been in a DMP for 8 years and still have 6 to go as I still owe £16,000. With hindsight, I should have gone bankrupt! My parents will give us a 20% deposit in 2021, but they don't know about my debts so I can't use their money to end the DMP. Will I be able to get a mortgage?" I've written before … [Read more...]
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 2003 and had a DRO in 2015. Will I … [Read more...]
Ms F asked: "I have been in debt management for five years after my marriage breakdown. After an inheritance, I want to pay off my DMP as it will carry on for years. I could pay in full but my house needs some urgent work and my car is on its last legs. I asked about my credit score if I offer a partial settlement and was told this would show as partially settled on credit score file. Will I … [Read more...]