It's now time - DMP I think??

itsnowtime · 15 July 2007 at 11:23PM

Hi all,

Having been looking around this site for a while I've managed to recover money I was entitled to - helping me with my debt so thank you - but now it's getting to that sticky point again...

A bit of background...

Due to failed relationships / business ventures - my outgoings are now significantly highter than my full time income by appx £500...

Income: £2450 per month from Full Time job
£450(ish) - not guaranteed from self employment

Debt: Outstanding Repayment Due to end
Loan 1 £1087 £161.30 Feb 08
Loan 2 £3700 £201.78 Feb 09
Loan 3 £7500 £230.51 Aug '10
Loan 4 £14,000 £393.91 Sept '10
Loan 5 £16,000 £338.00 Aug '12
C/C 1 £7000 £155.00 Sometime this lifetime

C/C 2 £11,450 £355.00 Ditto
C/C 3 £7,400 £167.00 Ditto
C/C 4 £8,800 £200.00 Ditto
O/draft £6500

Total £83,437 £2200.00

Mortgage repayment: £500 per month
Utilities & general etc... £350 per month

Due to my self employment which is up and down at times I've managed to repay more / cover minimum payments however I'm now finding this all too stressful... I've always had a good relationship with my bank and have kept them fully informed of my situation since October last year, however they have since changed my account manager 3 times and they are no longer appearing to be 'understanding and treating me as an individual' - more 'patronising and protecting their own interest'

So.. after extensive research I've been looking at the following options:

Consolidate the smaller loans to reduce the amount I'm paying out each month - struggling to get an unsecured loan due to amount of outgoings declined once already
Tart Credit Cards - but already been declined so don't want to push it..
Consolidate debt into 'secured loan' - struggle due to equity in property - nowhere near what's needed and I don't like the thought of extending the debt over longer periods of time - not right!!!
Re-mortgaging with Northern Rock to take advantage of higher unsecured loan + mortgage - this would save me £650.00 per month just on my full time employment income - but I'm only 1 year into a 2 year fixed - company wants to charge advisor fee and valuation fee expensive - and I'm just doing the same as no 2 securing the debt over longer period of time
Used CCCS 'Debt Remedy' - which suggested a DMP and I could be out of debt in 6 years!!!!

A DMP is looking a favourable option to me at the moment... I did the calculation based purely on my full time employment income and didn't include the self employment as this isn't guaranteed but I had a few questions:

Is it okay not to include self employment income?
Can I pay extra to creditors over and above DMP if I have the money?
What experience have people got in swapping mortgage after deal ends or securing a better rate if on a DMP?
Has anyone got any other options??

Thanks for your help in advance...

hypno06 · 16 July 2007 at 8:01AM

Hi there, on this board there is a very good DMP supporters thread which may be worth posting on. Also Matthew and Emily from CCCS visit this board so it may be worth looking out for them as well.

Give CCCS a call - they are very helpful, regardless of whether you choose to do a DMP or not.

Good luck. and keep posting - you will get a lot of support from this site!

itsnowtime · 16 July 2007 at 10:57AM

Hi,

Thanks for your message of support and encouragement - I have to say I find these boards fascinating.

Well, after a long conversation with CCCS this morning, I have decided to go ahead with a Debt Management Plan. IVA was not an option I was even going to consider because I got myself into this and I want to ensure I repay what I borrowed.

After looking at all the options I suggested earlier, DMP makes sense - my debt will be repaid within appx 5years (after some recalculation) I could never have achieved that if I'd have taken out a consolidation loan or re-mortgaged (I only have an 85% mortgage now, possibly less if prices have gone up a bit) I'd have still been repaying it in 30 years time if I'd have gone down that route and it would've cost me lots in process - how daft is that!!!!

I have already opened another current account elsewhere and I'm going to get things moving today. I appreciate it's not all signed, sealed and delivered yet but I feel so much better! It works out that I will have money left over each month for day to day living - not had that for such a long time I've been robbing peter to pay paul for long enough!!!

Any comments / advise is much appreciated.;)
Thanks again.....

Seaxwyn · 16 July 2007 at 11:15AM

I'm glad you've managed to find a good solution - certainly it seems much better than the other options. It's good to know that life will get easier and you have that big worry off your shoulders. And if you can build up your self employed business, you may be able to pay it off even quicker.

There are bound to be ups and downs as you pay it off and don't forget you will get lots of support here if you want it.

itsnowtime · 16 July 2007 at 6:36PM

Thanks for the support - I definitely feel lots better now... I know it's going to affect my credit rating in the future but I don't believe I have any other choice. But I also know I have everything I need - a 3 bed house big enough for when I start a family and by which time most of my debt will be cleared and everything in it is paid for and not on credit!

Been to the bank and advised that this is the route I'm going to take - now just got to sort out all my S/O's D/D's and wages etc to be paid into / out of my new account until my DMP gets set up...

itsnowtime · 19 July 2007 at 7:48PM

Well, just thought I'd give you an update!

Bank account is now sorted, and in the process of cancelling / transferring direct debits and standing orders etc...

CCCS pack has arrived along with letters to be sent to creditors - being dealt with tonight and in the post tomorrow.

Finally dealing with it - fingers crossed???

Gemmzie · 19 July 2007 at 8:11PM

Good luck with the DMP itsnowtime, and don't forget to stick your head in the DMP Support Thread. We don't bite and it's good to talk to people in the same situation sometimes, plus get feedback on who's nice and who's naughty in the creditor world

itsnowtime · 21 July 2007 at 4:12PM

Thanks for your comments so far. Just finished completing all my paperwork for the above creditors. My DMP is likely to start in September, which means that I have August's payments to deal with.

Instead of trying to struggle and send the full amount, I'm looking to send a token payment of at least 50% of payment (if not more). However I was looking for a bit of advice ..

In the envelope I send the Notification of Debt Management Plan to each of the creditors shall I put them a letter in there to advise what token payment I shall be sending them for August - and also for some companies request how I can make that payment as I've now cancelled all DD's and SO's?

I know I'm going to be dealing with Creditors that might not like my offer here - but I was thinking its probably best to be upfront - or shall I just wait for the phone to ring??
You're thoughts are much appreciated.

hypno06 · 21 July 2007 at 4:20PM

Not being on a DMP myself I have no idea what you have to do, but did just want to say good luck, and be proud that you are dealing with things in a very positive way.

Perhaps you could put a similar post on the DMP mutual supporters thread - they will be able to answer you in a jiffy I would think!!

itsnowtime · 21 July 2007 at 4:32PM

Thank you for your suggestions.. I've also posted there too.

Gemmzie · 21 July 2007 at 4:37PM

Who are you doing your DMP with?

What you need to do is to work out how much you have to give to them and pro-rata the payments, pay them this in August, or ask CCCS/PayPlan (if you are using them) how the payments will be split so you can pay in August

It's now time - DMP I think??

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