Your views and questions.

Moderators: TalbotWoods, JaneClack

By Ames105
#320233 Hi everyone!
Firstly.....long post alert!!
Am new on here but just wanted to seek some sound advice from people in the know as I have been in a debt management programme now for approximately 4 years and I think I am doing the wrong thing.
My husband was made redundant back in 2007 and we subsequently accumulated a lot of debt over the time he was out of work (about 2 years in total on and off)plus debt we were already paying off prior to this.... in total it amounts to about £40,000 on loans and several credit cards :oops: we had obviously hoped to pay off as quick as possible but it all became too much when he became unemployed. This lead to severe depression on his part, making it a vicious circle of stress, no work and lack of money...you get the picture...
I saw an advert for a debt management company and after a few phone calls they sounded the answer we had been looking for. We would pay them £20 a month and they would deal with all our creditors. The total we would end up paying each month to them once all consolidated was a lot less than what we had been paying direct each month to the individual companies....seemed too good to be true and probably a little naive on my part, but I wanted the easiest and most stress free option.
So, here we are in 2013 and things have changed for us, we now have a baby boy and my husband has been working in a good job for the last two years. He is making good money but now that I am part time at work after having our son, our salaries combined just about cover all of our bills, the debt management charges and the mortgage (which is interest only but not touched by the debt programme) plus living costs. We wouldn't be able to pay off the debt and get out of the programme unless by some miracle we won the lottery or had some good luck!
So that's my story.......my questions however are:
1. I know there are companies out there that offer the same thing as Spencer hayes (the company i am using for my debt management) but are free, I just need to know how I would go about switching, what I need to do and who to contact.
2. I have a mortgage with Kensington for £164,000 paying interest only and live in a flat worth approx £200,000. So there is some equity......would it be an option for me to re mortgage with them to pay off this debt? Is it possible whilst under the debt management process?
In a ideal world we would also love to re mortgage in order to be able to move out of our flat as if we ever wanted to have another baby it would be a real struggle in our one bed flat...skits just seeing if there is any light at the end of the tunnel?
3. Apart from the re mortgaging option above Is there ever an end to a debt management scheme? I know it sounds stupid but if we don't ever get any bonuses or way of reducing the debt, I can't see how it will ever get cleared...?

Anyway I'm so sorry for the essay, I wish I was more switched on with all of this but browsing the Internet and joining this forum has given me the motivation to sort this out and make a positive change for our future!

Hope you can help or point me in the right direction! Many thanks xxxxxx
User avatar
By TalbotWoods
#320253 Hi and welcome.

There are certainly things that you can do, so in direct answer to your questions.

1. There are two main organisations that provide DMP free of charge and these are given below, switching is easy, it starts with a phone call and they will guide your through the whole process. Don't worry they are more than used to people moving off fee charging DMP to theirs, and both are highly respected by the Creditors.

PayPlan: Is a national organisation with approaching 20 years of experience in dealing with all kinds of financial situations, no matter how bad they are.
Their advice and help starts with a simple phone call to 0800 280 2816

StepChange (formerly CCCS) Is an organisation that advises you on available solutions with your financial problems. You can contact them on 0800 138 1111

2. Sorry but going to be quite blunt here, even people with AAA gold plated credit files are finding it extremely hard to get a re mortgage, so with a record of debt, I dont think there is too much hope of getting anything like a fair, ethical or affordable reportage.

However, it may pay to give PayPlan a call as they have a Mortgage finding service for people with less than perfect credit ratings, called Whoislending, if anyone can find a re-mortgage they can, but please bear in mind even they may not be able to in the current climate. You may also like to call them separately on 0800 1978435

3. If you have a decent income it may be possible to look ant an IVA, which will significantly reduce the amount you owe, fix the repayments and finishes in 5 years, done and dusted. Both the above organisations can tall to you about these, they do work and protect your home (plus it will stop creditors securing debts on your property!!)

On a serious note I would suggest looking at an IVA, as from what you have described it actually sounds the best option for you, and if you are using the PayPlan or Stepchange nominated IVA providers, they are better than the rest, they dont rip you off for starters, there are not up front fees.

Tim
By Ames105
#320363 Thank you so much for taking the time to reply, I really appreciate your advice and will contact those companies ASAP.....hopefully they can then point me in the right direction!
Thanks again!
Amy