Consolidation or debt management ? Help please

January2015 · 27 February 2017 at 6:11PM

Lauramags64 wrote: »

Thanks for all your advice! I'm terrified of losing our house. We only bought it last year. Can having a DMP in place make us lose the house in any way??? Or are we safe as the mortgage is secured debt?

Going to ring step change tonight but just wondering in the mean time! Feel like a massive cloud of debt is hanging over us, it's horrible! Can't sleep, worrying about it :-(

We had £95k unsecured debt when we started DMP. We own a house with £250k equity. House is safe. Nothing has happened regarding the house. Don't panic. DMP is an informal debt solution for unsecured debts. If you keep in contact with your creditors and pay them what you can afford through a DMP you will not get anywhere near a court for anything let alone seeking anything to secure debt to your home.

sourcrates · 27 February 2017 at 6:34PM

Lauramags64 wrote: »

Thanks for all your advice! I'm terrified of losing our house. We only bought it last year. Can having a DMP in place make us lose the house in any way??? Or are we safe as the mortgage is secured debt?

Going to ring step change tonight but just wondering in the mean time! Feel like a massive cloud of debt is hanging over us, it's horrible! Can't sleep, worrying about it :-(

Although you can never say never, the likelihood of a creditor obtaining a CCJ and charging order against you, whilst a possibility, will be unlikely, whilst you are repaying a DMP through stepchange.

It is dependent on how much you owe each creditor, and if they want to play hard ball or not, as to wether they take legal action, most will accept your DMP without question, an order for sale, is extremely rare, about 1 in a 100 charging orders progress to orders for sale, and these will be the people who are not paying anything.

I would not worry, once the arrangement is up and running, its just like your making the normal payments to your accounts, and life will continue much as before, seriously all will be fine.

Lauramags64 · 1 March 2017 at 8:01AM

Thank you. Had a good chat to step change and feel so much better :-) All will be fine. We are going to switch our bank accounts before applying and start the DMP in June, which will be when I return to work from maternity.

One question I forgot to ask is about savings. They suggest £35 a month for emergencies...obs this money needs to be put aside monthly to gradually build up, but can you have savings on a DMP? Or if creditors take us to court will we them have to give up the emergency fund building up?? Hmm. I hate the idea of having to store cash in the house!

Thanks :-)

Barbie61 · 1 March 2017 at 2:09PM

Hi - that's really helpful to know that if your mortgage goes up the DMP goes down - I am going to stop prevaricating and do the online budget tool and submit - see what advice they give me. Can't cope with the stress any more.

January2015 · 1 March 2017 at 2:21PM

Lauramags64 wrote: »

Thank you. Had a good chat to step change and feel so much better :-) All will be fine. We are going to switch our bank accounts before applying and start the DMP in June, which will be when I return to work from maternity.

One question I forgot to ask is about savings. They suggest £35 a month for emergencies...obs this money needs to be put aside monthly to gradually build up, but can you have savings on a DMP? Or if creditors take us to court will we them have to give up the emergency fund building up?? Hmm. I hate the idea of having to store cash in the house!

Thanks :-)

Savings accounts do not show up on credit reference files. Creditors won't know you have any savings.

You should really save the amounts allocated for emergencies, repairs, maintenance, etc. etc. so that when those events crop up you will have the funds available to pay for them without panicking - because you will no longer have any access to credit. I literally have a standing order set up from my basic bank account to a savings account for the total amount of all those little pots that Stepchange allowed. This includes clothing, dental/health, car repairs, etc. etc. It builds up nicely in the savings account and when the car service is due, or a dental appointment comes round I just don't worry and transfer it back from savings.

worriedDan · 1 March 2017 at 2:55PM

Lauramags64 wrote: »

Joint income is £3,329 but outgoing before paying childcare are £3,427...so we are in trouble!! :-s How about you? Have you taken a DMP?

No, we aren't really eligible for a formal DMP as we can afford to repay it. I did the Stepchange debt remedy tool online and it recommended a monthly repayment plan. We can afford to pay the minimums, plus an over-payment but I think that we would have soon been in a situation that was umnageable if I had not had my LBM

chelseablue · 1 March 2017 at 3:07PM

Could you post your SOA on here? There may be things people can advise you to cut back on

Barbie61 · 17 March 2017 at 12:10PM

Hi - you mean don't pay them for a few months? I thought you should carry on paying them - gosh I'm confused. I have 0 in the bank now and just about to contact Stepchange.

sourcrates · 17 March 2017 at 4:04PM

Right we seem to be crossing threads here a little.

Advice given here applies to anyone wishing to start a debt management plan, but if anyone has a specific question about there own situation, please start a new thread by clicking the big blue "new thread" button at the top left of this forum.

Then we dont confuse one another.

Consolidation or debt management ? Help please

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