Debt, no idea where to start

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Hey guys,

So I recently graduated from University and I've found myself in a little bit of financial trouble. I got a student debit card, and credit card from the HSBC when I started University and now I have outstanding debt with them, additionally during my 2nd year at University I lived with several housemates and paid an Electricity bill to Scottish power using my details, and now they're chasing me for the gas bill and I have no contact with the past residents.

Now I'm being contacted by two different companies, Moorcroft Debt Recovery for the debts from HSBC (~Ј1,500 for the debit card, ~Ј500 for the credit card), and Buchanan Clark and Wells for the debt to Scottish Power (~Ј500).

Now I acknowledge these debts, and want to get them paid off. I just don't know the best approach to do this, neither company has threatened any sort of legal action yet but I'd like to be pro-active and pay off what I owe.

I was thinking about one of those financial management plans where you pay one monthly fee and the company takes care of everything else for you, does anyone have any good experience with any of them?

If not, does anyone else have any good advise about how I should approach this. I've heard pretty shady things about both companies, but I do owe this money so I want to make sure I sort this.

Best answers:

• Hi There....Welcome to the Forums....
  The best advice I can give you is to contact StepChange....they are a FREE Debt Advice Company....please please don't go to one of the fee-paying Companies....they take money off you and it could be money that could go towards your Debts instead....So do contact them....they will help you out....
  And do keep on posting on here....I'm sure there will be someone more knowledgeable than me that will give you some more advice....
• I agree with Helen, go onto Step Changes website and click on the 'Try Debt Remedy' button. They did a brilliant job for me and creditors will work with them. Those fee taking companies will promise you the earth but in reality they don't do any better than the free providers in my opinion.
• Thanks for the advice guys, i'll take a look there now.
• Stepchange, christians against poverty ,national debtline- will all provide this service free for you
  PLEASE DO NOT go anywhere near a company which takes a fee.
  good luck.
• I've requested a pack from StepChange, hopefully this'll put me back on the right track. I really appreciate the advice you guys give, you put me in the right direction
• good luck and stick around - it's a very useful forum!
• What?! Advising people to jump straight into a debt management plan is awful advice.
  This will cripple your credit rating before you've even got going in life.
  Considering you're straight out of University it would be better to contact the companies in question and arrange a plan with them each directly, explaining your situation and desire to pay.
  Work out from your income what you can spare, divide it amongst the creditors and ask for a review after 3-6 months to look at increasing the amounts you are paying them.
  If you have no job, get one or in the meantime ask mum and dad who would surely prefer to help you out than see you in a DMP straight out of Uni
• Read my signature too TAJ -
  https://capuk.org/ [ enter your postcode where asked]
  Martin rates them highly and they do not proselytise - CAPUK are brilliant.
  As per CW above, ignore #5. You'll see all posts have a RemoveYourThanks button, should you wish to use it.
  I'm going to say Well Done for coming here, but also be ready to change your i.d. when you set yourself free from these debts which you acknowledge:-)
  You are not in 'in a little bit of financial trouble' - you are in financial trouble, fullstop, no glossing. That's why you've posted.
  TheAverageJoeMkII will be the one who does not think debt is normal and is now addicted to saving.
  #
  Again, like CW, I see no mention of paid work. Degree ignored, you need to take anything legal atm.
• I agree with consumer wizzkid, this is 2.5k we are talking about. I wouldn't advise a DMP or payment plan.
  Are you in work, what are your earnings compared to your outgoings? Only somebody in extreme circumstances should struggle to pay this back. If you have debt collection agencies chasing you then you have likely defaulted on the accounts. These will last for 6 years from the original default date. You will struggle to obtain mainstream credit now including a mortgage. So just focus on clearing these amounts, and getting some emergency savings in the bank, maintain pro active communications with the agencies and if you have a lump sum you could see if they might accept a lesser amount as a settlement figure. I am sorry, we are all different, have different coping mechanisms and circumstance dictates what is a large amount or a small amount, however I can't help but feel that you have ruined your credit worthiness for 6 years all for the sake of 2 and half grand. Students should be given mandatory financial and life lessons.
• First things first. Post a SoA (Statement of affairs) to show income and outgoings. This will determine the next steps. Do you have the spare cash to pay each month, can you save elsewhere in your budget etc.
  SoA Template is here
• Debt Management plans fall into 3 main camps:
  1. a do-it yourself plan. CAB , National Debtline can help you with this is you need template letters etc.
  2. A fee-free plan - the main providers of these are Stepchange and Payplan.
  3. a provider who charges a fee. No-one recommends this as it just means you are stuck in a plan for longer.
  All options will have the same likely effect on your credit file
• I actually agree with WizKid here...
  If the Op has other debts which they are managing and it's just these two which have been allowed to slip (ok, I admit it's a little unlikely) then I'd rather they contacted the two DCA's independently to enquire into a repayment plan which didn't include having all debts rolled into one.
  Contacting Step Change doesn't automatically mean they will recommend a DMP either bear in mind.
  All that said, I'd much rather they just spoke to their parents first and then maybe even try contacting their Uni "friends" for a contribution to the Scottish Power bill too
  Something else to consider is that these DCA's may be acting on behalf of the original creditors so possibly contacting them to discuss repayment option might still be on the table too?
  MB
• Managing your debts yourself looks infinitely better to future creditors than requiring a 3rd party to hold your hand and send letters on your behalf.
  Entering a DMP does not force creditors to accept your offers any more than requesting plans yourself and they can still register defaults on your file every month if they so choose. Entering a DMP does however get marked on your credit file so you can significantly worsen your situation by taking this route as an easy option.
  2k as a graduate presumably living at home is nothing to be worried about and Op should be able to come to suitable arrangements without further damaging his fledging credit file.
• While consumerwizkid could have put it a little better without sounding so flaming I do tend to agree with him as MB also says.
  People do seem really quick to jump into DMPs, while the OP might think that debt is huge in the grand scheme of things it isn't. I appreciate straight from Uni with possibly no income it could be a difficult position, but if you explain that to the companies (that probably fell over themselves to offer credit while at Uni) they will have options without the need for a DMP.
  A DMP is last resort time. It was for me anyway, and yes it has been a godsend but my credit is dead in the water for 10 years and that should never be taken lightly.