DMP Mutual Support Thread - Part 12

DeterminedToBeDebtFree_3 · 10 April 2017 at 6:51PM

Hello all, I'm one of the lurkers referred to in the first post...

I'm only 23 years old but was at uni for 5 years, have 2 degrees and have worked my !!! off to become a trainee solicitor. A combination of being at uni for so long and falling out with my dad meant I over relied on credit and got into a payday loan trap.

I am "only" (compared to others posting here!) £7k in debt to creditors, plus £3k to my grandparents (excluding my student loans obviously) but considering my age I know that's not good.

After seeing people talk about the relief they've felt, I took the plunge and I set up a DMP with SC, and made my first payment last month.

My problem is now as follows: when I qualify as a solicitor next year, my initial salary will more than double and go up every year. This means that on the DMP I can be debt free in 3 years absolute max, but the defaults will be on my account for another 3 years after that. If I were to apply for a mortgage say, in 4 years so a year after being debt free, how would banks view this? I will have a very good salary, don't plan on having kids by then and will for all intents and purposes be debt free (bar my student debt), but will have several defaults.

Is a mortgage possible then?

Thanks in advance for your help

DTBDF xx

sourcrates · 10 April 2017 at 6:59PM

dacdesigns wrote: »

Yes I think it's the best option for us both. I rang stepchange but they couldn't understand why I hadn't received a call about the DRO for me but I started getting calls from my debtors and I got cold feet and panicked and asked for my DMP to be set back up.

Now I feel it's the right time to finally apply and do this together. I'm a little worried that they may say spend less on food or clothes and reject the application but I feel we spend the correct amount to feed a family of 4.

Anyways thanks for the help, I'll let you know how we get on.

Your budget won't be questioned as long as the figures are not too high, make sure you budget for everything you are entitled to budget for, and remember, you must have less than £50 a month left after essential bills are paid (do not include debt repayments in this).

sourcrates · 10 April 2017 at 7:03PM

DeterminedToBeDebtFree wrote: »

Hello all, I'm one of the lurkers referred to in the first post...

I'm only 23 years old but was at uni for 5 years, have 2 degrees and have worked my !!! off to become a trainee solicitor. A combination of being at uni for so long and falling out with my dad meant I over relied on credit and got into a payday loan trap.

I am "only" (compared to others posting here!) £7k in debt to creditors, plus £3k to my grandparents (excluding my student loans obviously) but considering my age I know that's not good.

After seeing people talk about the relief they've felt, I took the plunge and I set up a DMP with SC, and made my first payment last month.

My problem is now as follows: when I qualify as a solicitor next year, my initial salary will more than double and go up every year. This means that on the DMP I can be debt free in 3 years absolute max, but the defaults will be on my account for another 3 years after that. If I were to apply for a mortgage say, in 4 years so a year after being debt free, how would banks view this? I will have a very good salary, don't plan on having kids by then and will for all intents and purposes be debt free (bar my student debt), but will have several defaults.

Is a mortgage possible then?

Thanks in advance for your help

DTBDF xx

Hi,

It's impossible to say with any certainty.

Lenders have different lending criteria, it would depend on the whole picture at the time of application.

Defaults are not good (for lending purposes) but it shouldn't be an automatic no, like I said, it will depend on the whole picture at the time.

Bepop · 11 April 2017 at 1:40PM

Hi to everyone who has helped with the support and advice over the past week. I plucked up the courage to go on and do a debt remedy through step change. I then got my DMP recommendation which came out at 8 years will be free of debts. Although it did say this could be quicker. I'm still holding back from sending for my pack. I'm worried as I have so many questions going round in my head. How do I know the amount that is left from my budget is enough to pay each creditor enough to satisfy them that I'm meeting the minimum payment at least each month? If I agree to the DMP do I pay direct debt to stepchange who then pay the creditors? I was reading through every thread I could and barclay card keeps coming up saying if you don't pay 1% they don't stop interest and charges? I'm going to open a new current account, that's clearly a must, which I looked at online and looks pretty straightforward. Then I started to think what if I've made a mistake in my debt remedy, am I paying out enough or will I have enough money to survive on. I've also read to ask for a few months before starting the DMP to get a bit of savings going. Is this OK to ask? I know I need to write out to creditors after I've set up new current account is that right? If I decide to pluck up the courage and ask for my pack I know there's no turning back and I'm petrified but know I'm sinking. Everybody on this site are truly inspirational to me right now. To be able to put your head down at night and not worry about how your going to pay your debt must be the most calming feeling after many many years of worry. One of my credit cards has went over its limit. This concerns me now, is this now seen as a default, what is default? My worry is they won't agree to my request through stepchange
Thank you to everybody for listening to such a worry wart x

[Deleted User] · 11 April 2017 at 1:52PM

Bebop, massive congratulations on getting this far. I can still remember the anxiety and uncertainty of those first scary steps.

Am in a massive rush but just wanted to reassure you. So long as you claim for everything you need to pay out when drawing up your income and expenditure list all you'll have left to pay your creditors is all they can get. You can't pay them more money than you have. Simple as that. Just make sure you claim for every single thing you are eligible for;). 8 years doesn't seem to bad at the outset and should things improve for you it may be less. Mine has been 4 years so far and I can honestly say it has gone surprisingly quickly:j

Stepchange will put the proposals to them (paying them pro rata from the total amount you have available to pay Stepchange each month). I know in some cases people have reported being told that some creditors won't accept the amount being offered but Stepchange tend to just pay it anyway and as far as I know nothing happens. The creditors just accept it.

Someone else will be along soon and put your mind at rest on your other worries and queries.

January2015 · 11 April 2017 at 2:18PM

Bepop wrote: »

Hi to everyone who has helped with the support and advice over the past week. I plucked up the courage to go on and do a debt remedy through step change. I then got my DMP recommendation which came out at 8 years will be free of debts. Although it did say this could be quicker. I'm still holding back from sending for my pack. I'm worried as I have so many questions going round in my head. How do I know the amount that is left from my budget is enough to pay each creditor enough to satisfy them that I'm meeting the minimum payment at least each month? If I agree to the DMP do I pay direct debt to stepchange who then pay the creditors? I was reading through every thread I could and barclay card keeps coming up saying if you don't pay 1% they don't stop interest and charges? I'm going to open a new current account, that's clearly a must, which I looked at online and looks pretty straightforward. Then I started to think what if I've made a mistake in my debt remedy, am I paying out enough or will I have enough money to survive on. I've also read to ask for a few months before starting the DMP to get a bit of savings going. Is this OK to ask? I know I need to write out to creditors after I've set up new current account is that right? If I decide to pluck up the courage and ask for my pack I know there's no turning back and I'm petrified but know I'm sinking. Everybody on this site are truly inspirational to me right now. To be able to put your head down at night and not worry about how your going to pay your debt must be the most calming feeling after many many years of worry. One of my credit cards has went over its limit. This concerns me now, is this now seen as a default, what is default? My worry is they won't agree to my request through stepchange
Thank you to everybody for listening to such a worry wart x

Carbootcrazy (CBC) is right - creditors cannot have what you don't have. Don't panic - even if you can only afford £1 for each creditor that is enough.

Stepchange (SC) will agree an amount you can afford to pay your creditors. They will collect this amount from you once each month. They then distribute that amount amongst your creditors. SC write to your creditors for you and tell them. When you return your pack you will sign an authorisation form for SC to communicate directly with your creditors.

When you work out your budget, make sure it's realistic. Leave yourself wriggle room. For example if you think you could scrape through on £200 for grocery type shopping - don't scrape, allow a bit more. For example £250. The SC online debt remedy tool will advise you what it thinks is reasonable for your household based on the information you have put in, e.g. number of adults, pets, etc.

If there is an allowance on the SC website for something, make sure you take your allowance. Don't think - I won't need that. For example, household repairs, smoking, insurance, etc. etc.

Don't worry about Barclaycard. They are a pain in the proverbial butt - however, they will accept your DMP and if they continue to charge interest and charges, come back here and we will help you argue you case. You will find the strength to do this. You may not feel strong enough now, but once you realise your debts can be resolved and you have rights, you will begin to see you can be strong again.

Stop paying your creditors immediately and start saving the money you would have paid them for your emergency fund.

SC like to start DMPs as soon as possible, but here we advise people to make sure they save an emergency fund first. I would write to your creditors and tell them you are seeking advice from SC (which is true) and ask them to stop interest and charges. I would delay sending off for the SC pack for a couple of months whilst you save that emergency fund. Nothing bad will happen in this couple of months. No creditors will get nasty and you will not have debt collectors at your door.

After a couple of months, send off for your SC pack and start the ball rolling. That will buy you another month before everything is set up for SC to collect your monthly direct debit payment.

Hope this helps.

henrryyyy · 11 April 2017 at 3:28PM

Bepop wrote: »

Hi to everyone who has helped with the support and advice over the past week. I plucked up the courage to go on and do a debt remedy through step change. I then got my DMP recommendation which came out at 8 years will be free of debts. Although it did say this could be quicker. I'm still holding back from sending for my pack. I'm worried as I have so many questions going round in my head. How do I know the amount that is left from my budget is enough to pay each creditor enough to satisfy them that I'm meeting the minimum payment at least each month? If I agree to the DMP do I pay direct debt to stepchange who then pay the creditors? I was reading through every thread I could and barclay card keeps coming up saying if you don't pay 1% they don't stop interest and charges? I'm going to open a new current account, that's clearly a must, which I looked at online and looks pretty straightforward. Then I started to think what if I've made a mistake in my debt remedy, am I paying out enough or will I have enough money to survive on. I've also read to ask for a few months before starting the DMP to get a bit of savings going. Is this OK to ask? I know I need to write out to creditors after I've set up new current account is that right? If I decide to pluck up the courage and ask for my pack I know there's no turning back and I'm petrified but know I'm sinking. Everybody on this site are truly inspirational to me right now. To be able to put your head down at night and not worry about how your going to pay your debt must be the most calming feeling after many many years of worry. One of my credit cards has went over its limit. This concerns me now, is this now seen as a default, what is default? My worry is they won't agree to my request through stepchange
Thank you to everybody for listening to such a worry wart x

I was in the same position a month ago, umming and arring whether to go through with it, worried about all the initial contact with creditors etc. I had a headful of questions that the amazing people on here answered(January, carboot, sazzie, sourcrates to name a few, sorry whoever i missed) Some of them I thought were stupid questions but still asked anyway as the little things/worries can eat away at your mind.

I was kind of gearing up for a battle with my creditors, but I have to say, they have been unbelievably understanding/friendly etc(all my contact was through email). so far 4 out of 12 have confirmed interest and fees have been frozen if I stick to my DMP. so between those 4 creditors paying £195 between them is actually clearing £195 of my debt, not just paying £180 of interest.

save up an emergency fund and then get your pack sent off, you wont believe how much clearer your head will be, ask any questions or worries you have here, the folks here are always happy to help.
you wont have to worry anymore about which payments u need to make, juggling money between creditors to make sure you meet each minimum repayment etc. Just 1 easy payment to stepchange and you can forget about it for that month.

I echo what people say, budget for every little thing/expense you do or may have.. I initially done a budget with SC(online) giving me £780 to pay my creditors trying to be "as kind" to my creditors as i could, after going through a budget with someone on the phone at SC my payments to creditors was reduced to £570 because of things I hadnt budgeted for.

good luck with it all, you wont regret the decision, even if there are a few bumps along the way, you will be in a much better position mentally and financially

January2015 · 11 April 2017 at 3:39PM

henrryyyy wrote: »

I was in the same position a month ago, umming and arring whether to go through with it, worried about all the initial contact with creditors etc. I had a headful of questions that the amazing people on here answered(January, carboot, sazzie, sourcrates to name a few, sorry whoever i missed) Some of them I thought were stupid questions but still asked anyway as the little things/worries can eat away at your mind.

I was kind of gearing up for a battle with my creditors, but I have to say, they have been unbelievably understanding/friendly etc(all my contact was through email). so far 4 out of 12 have confirmed interest and fees have been frozen if I stick to my DMP. so between those 4 creditors paying £195 between them is actually clearing £195 of my debt, not just paying £180 of interest.

save up an emergency fund and then get your pack sent off, you wont believe how much clearer your head will be, ask any questions or worries you have here, the folks here are always happy to help.
you wont have to worry anymore about which payments u need to make, juggling money between creditors to make sure you meet each minimum repayment etc. Just 1 easy payment to stepchange and you can forget about it for that month.

I echo what people say, budget for every little thing/expense you do or may have.. I initially done a budget with SC(online) giving me £780 to pay my creditors trying to be "as kind" to my creditors as i could, after going through a budget with someone on the phone at SC my payments to creditors was reduced to £570 because of things I hadnt budgeted for.

good luck with it all, you wont regret the decision, even if there are a few bumps along the way, you will be in a much better position mentally and financially

henryyyy - I love reading posts like yours above :j It is so lovely to see the change and positivity in your posts from when you first joined us.

One of the best pieces of advice I can give anyone starting on their DMP journey is to keep visiting this forum and stay in touch. Talking about debts in the real world is difficult and it is such a wonderful thing to be abe share progress and occasional problems on here with other folk who are (or have been) in the same deep debt hole as you. It helps keep you focussed on your target of clearing your debt, it helps when you have bumps along the way and you need to drop payments for a short time - you will have the belief these things are bumps in the road and not flipping great mountains you cannot climb over.

I love my DMP, and I love this thread (and forum). Without it I would not be where I am in the road to clearing my debt......which I very soon hope will hit another major milestone in the debt clearing journey:j

[Deleted User] · 11 April 2017 at 4:00PM

I so agree with that, January:T. Keeping in touch with others on here and not panicking when setbacks occur is so important on the long journey through DMPland. More than likely that someone else will have experienced the self same problems and can pass on their invaluable advice based on first hand experience.

For various reasons which I still don't feel able to talk about on here (even though I know I'm among friends):o I was unable to give OH even the slightest hint of the extent of my debts. The secrecy and anxiety was beginning to take its toll on my health as the massive debts didn't just happen overnight, especially pre-DMP when creditors were phoning me at all hours. Of course, once the DMP started the creditors stopped phoning and it was like a massive weight being lifted off me.

I knew (still do) that I could come on here and get things off my chest, ask what were probably pretty dumb questions if I had any concerns and know that I would be helped, reassured and encouraged by the absolutely wonderful people on here who are always willing to share their time and expertise in a totally non-judgemental way:A.

Bepop · 11 April 2017 at 10:04PM

Hello everyone. Again can I pass on a great big thank you to each and everyone of you who have taken the time out your busy day to reply. A week ago I was lost in my own thoughts. If it wasn't for stumbling across this site I honestly don't know where I would have turned to for help. You are all fantastic. Each of you all have your wee individual stories to tell, I actually felt quite emotional reading through your threads, but your strength truly comes through, which I feel has got me to this point a week on. I think I would be better phoning SC and maybe go through my budget with them. I don't feel 100% at ease that I've filled it out correctly, i know i have held back on being realistic with everyday expenditure, so will give them a call. I will change my current account and will send out my letters to all creditors. To get it all correct in my head, once I call SC to do a budget, at that point, can I still say I'm not ready for my pack yet, but I know after a couple of months after building up an emergency fund, I then phone back in to SC and request my pack, sign it and return and take it from there as in the ball will be rolling? Sorry again, thank you all, you have been brilliant x

DMP Mutual Support Thread - Part 12

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free