Anyone done an income maximisation plan or heard of one?

itsallabitmuch · 27 April 2017 at 5:34PM

So I've called StepChange in a fluster because I had completely forgotten about a couple of outgoings.

They said they've had to cancel my DMP and can only advise that I request that my creditors allow me to set up an income maximisation plan with them.

From what I can gather, this means that I have to do it for myself, which I'm going to find hard with my illnesses, but I'm more than willing to give it a go.

he problem is, I've got to wait for the pack to come through via email, and I couldn't take in half of what he said.

Does anyone know anything about these plans, or has anyone ever experienced one?

National_Debtline · 28 April 2017 at 10:43AM

Hi there,

I think there may have been a bit of a misunderstanding here. If you have very limited money available you may only be able to offer a token payment plan to your debts (of say £1 per month). If you are spending more than what you have coming in then you need to look at maximising your income to help your budget to balance. This can involve checking other benefit entitlements, secondary employment (if applicable), lodgers (again if applicable), etc.

If you will struggle with repayment plans then you may be able to look at getting the debt written off instead. A Debt Relief Order (DRO) is a way to get the debts written off for people who owe less than £20,000 of debt, have less than £50pcm available for the debts and have less than £1000 worth of assets (plus you are allowed to have a car that is also worth up to £1000). Could this be a possible solution?

Laura
@natdebtline

itsallabitmuch · 28 April 2017 at 10:47AM

Thanks for your reply Laura.

I probably have got confused, as I was really upset.

They didn't even mention a DRO to me - they just said they could no longer help and I needed to do it alone.

I seem to fit the criteria for a DRO, but I assumed it was a no-go, as StepChange didn't refer to it at all.

I'm really confused about all of this, and I'm not sure where to turn, to be honest.

I have approximately £11.5k of debt that I built up in less than 6 months during a manic episode (I have BPD), and I totally accept that it's mine to pay, I just don't know where to turn.

StepChange worked out my budget and said I have £41 left per month and that I should split that equally between my creditors.

National_Debtline · 28 April 2017 at 11:15AM

Hello again,

It does seem strange that a DRO hasn't been mentioned to you. The only issue I can see is whether your assets may exceed the limits - are you a homeowner? If you are then I am afraid it would rule this option out and negotiations would make more sense. But if you are renting and have a car worth less than £1000 this would seem to suit you.

A DRO means that for 12 months you do not pay your debts, you would have restrictions placed on you during this time (known as a moratorium), and if after the 12 months you are in the same financial position (i.e. that you still have less than £50pcm for your debts), the debts are written off and you are no longer liable. It costs a one off fee of £90, it is very damaging to your Credit Reference File and you must meet the rules for the full 12 months.

Laura
@natdebtline

itsallabitmuch · 28 April 2017 at 11:23AM

Thanks again,

I'm not a homeowner, and my car is a Motability one.

I'll look into it and see which option is best.

Thanks again

sourcrates · 28 April 2017 at 1:56PM

itsallabitmuch wrote: »

Thanks again,

I'm not a homeowner, and my car is a Motability one.

I'll look into it and see which option is best.

Thanks again

Then you should qualify, lots of info on the net.

Depending on who you speak to at stepchange, can equate to the level of service you receive.

The same can be said for any large company, if you need further help please post again on this thread.

BrightLights14 · 28 April 2017 at 4:44PM

Gah! So annoying that whoever you've been speaking to at Stepchange has been giving misinformation. I've had the same issue with some of the reps at Payplan. They'd do well to read this forum once in a while!

Good luck OP, DRO sounds like it could really help you. Hope you get this sorted xx

StepChange_Kirsty · 28 April 2017 at 6:18PM

Hello,

I’ve just come across your post and I hope you don’t mind me responding.

I’m sorry to hear you’ve come away from speaking to us feeling confused and not knowing where to turn next.

Laura is absolutely right, income maximization is a solution we suggest when you have more money going out each month than you have coming in. As a result this could cause you to incur further debt.

In this situation we feel the focus needs to be on balancing your budget either by looking at options to try to increase your income or to reduce your expenditure whilst paying token payments of £1 to each of your creditors. Once your budget does balance, we can look into longer term options that will work for your individual situation.

You’ve mentioned that you do have a small surplus of £41, your debts are £11.5K, you’re not a homeowner and your car is on Motability. Given that information, on face value it does appear you may be eligible for a debt relief order (DRO), however, I wouldn’t be able to say this for sure without seeing your full budget information.

I would definitely recommend getting in touch with us so we can review your circumstances again and we can check to see if you’d be eligible for alternative options such as a DRO. You can find our contact details here.

We hope to hear from you soon.

All the best,

Kirsty

itsallabitmuch wrote: »

So I've called StepChange in a fluster because I had completely forgotten about a couple of outgoings.

They said they've had to cancel my DMP and can only advise that I request that my creditors allow me to set up an income maximisation plan with them.

From what I can gather, this means that I have to do it for myself, which I'm going to find hard with my illnesses, but I'm more than willing to give it a go.

he problem is, I've got to wait for the pack to come through via email, and I couldn't take in half of what he said.

Does anyone know anything about these plans, or has anyone ever experienced one?

itsallabitmuch · 28 April 2017 at 6:40PM

Just a quick update. I have now spoken to the National Debtline, and here is my current situation:

I can't afford a DMP as I have £14 pcm left over.

I can't go down the DRO route because the way they work it out is off household income and expenditure. Because my husband's income is higher than mine, it works out that he should be contributing more than me. But, owing to my medical issues, the lion's share of groceries, fuel, and medical costs are mine and mine alone. My husband can't contribute more because he pays his own debts monthly (he's never defaulted etc., but his commitments basically take us up to our limits.

I can't do an IVA for the above reasons.

I can't go bankrupt because, although the house is in my husband's sole name, I have what's known as a beneficial interest in the property.

So now I'm left with three options:

1. Request that my creditors write off all or part of my debts as they were accrued while I've been mentally ill.

2. Send a token payment of £1 pcm to each creditor, totalling £11 pcm, leaving me paying it all off for the rest of my life.

3. Just die, which will mean that my debts are wiped. I've checked, and they can't make my husband liable because they're not joint debts.

sourcrates · 28 April 2017 at 6:54PM

Are all the debts in your name or joint names ?

fatbelly · 29 April 2017 at 6:54AM

itsallabitmuch wrote: »

I can't afford a DMP as I have £14 pcm left over.

I can't go down the DRO route because the way they work it out is off household income and expenditure. Because my husband's income is higher than mine, it works out that he should be contributing more than me. But, owing to my medical issues, the lion's share of groceries, fuel, and medical costs are mine and mine alone. My husband can't contribute more because he pays his own debts monthly (he's never defaulted etc., but his commitments basically take us up to our limits.

I can't do an IVA for the above reasons.

I can't go bankrupt because, although the house is in my husband's sole name, I have what's known as a beneficial interest in the property.

I suspect they're saying that you can't have a DRO because of the beneficial interest. It is an area that the different 'competent authorities' view differently.

http://forums.moneysavingexpert.com/showthread.php?t=5477128

I've sent you a pm

Anyone done an income maximisation plan or heard of one?

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