£92k debt, time to face up to it!

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Hi all

Over the past 6 years I have systematically built up masses of debt and now at £92k I simply cannot meet the minimum payments and have to stop getting out more loans in order to pay for them. Can't believe it's taken so long and how stupid I've been. Now I finally am admitting that it's got to stop and I have a problem really I really do feel so stupid.

So I need to take action and would really like some advice if possible. I don't want to do the IVA or bankruptcy route so have got all the details for a DMP with CCCS. It will really help it seems, financially and mean I will be debt-free in a number of years rather than building it up constantly. Just a few things though, did ask CCCS but the woman didn't sound totally sure!:

- I have just missed all my payments this month for the first time which means I have 11 creditors chasing me like wolves. Is the fact that I've missed these payments a problem for the DMP arrangement?

- Two of my loans were taken out within the past 3 months - are these too early to be approaching for DMP?? i.e. I've spent the money on servicing my debt already and only made a few payments.

- Also, what effect will a DMP have on my partner? Not married but have mortgage together (no other debt is joint, all mine).

I'm in a total mess and almost at breaking point to be honest. If anyone can offer any advice on these things and just the DMP process in general it would be much appreciated.

Thanks!!
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Comments

  • RAS
    RAS Posts: 32,829 Forumite
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    Welcome

    Without knowng the income side of things, it is hard to comment.

    Does your partner know about the debt? And what is his/her attitiude to the situation?

    You probably need to send a letter telling them you are to be contacted in writing only, as you are allowed by the OFT Guidelines.

    Is CCCS sending you a template letter to make a token payment whilst you sort things out?

    As you have a joint mortgage, the DMP will affect his/her credit rating, because you are financially associated. It is esssential that you keep the mortgage up to date, for both your sakes.

    It migh tbe an idea to get a copy of his/her credit records in case ther are only other old accounts around?

    There are others on here - jacks and hypno06 for example who have tackles similiar levels of debt, so you will find good company.

    If you post up an SOA, we can advise you, but it would be best to do a joint one if possible.
    The person who has not made a mistake, has made nothing
  • savingholmes
    savingholmes Posts: 27,594 Forumite
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    Have you set up a seperate bank account with someone you don't owe money to so that you can still have money paid into an account while sorting out your dmp.... (otherwise if you have an overdraft they could use any money you pay in to clear that and then potentially close your account)
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 236 payments to go - now £183,036 Equity 26.8%
    2) Spend on handyman & external building works & new patio door £12.65K
    3) CC £4.6K on 0% spends card but offset by £33.8K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £10.2K/£127.5K AVC target 8% value at 15/5
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • gonnawin
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    Thanks for the fast responses guys. It's been a bit of a depressing weekend but trying to stay focused on getting it sorted. Here's some responses to your questions:

    RAS:

    Does your partner know about the debt? And what is his/her attitiude to the situation? Yes he does, but not happy and really angry about it as I have been trying to hide the problem for a while now so it's been a bit of a shock.

    You probably need to send a letter telling them you are to be contacted in writing only, as you are allowed by the OFT Guidelines. - cheers

    Is CCCS sending you a template letter to make a token payment whilst you sort things out? Yes they have been really good so I'm getting their pack this week I expect.

    As you have a joint mortgage, the DMP will affect his/her credit rating, because you are financially associated. It is esssential that you keep the mortgage up to date, for both your sakes. Yes definately will be doing that, vitally important. So if he applies for a loan in his own name will his credit rating be ruined also?

    It migh tbe an idea to get a copy of his/her credit records in case ther are only other old accounts around? He has very little debt, one loan and one credit card (with nothing on!).

    There are others on here - jacks and hypno06 for example who have tackles similiar levels of debt, so you will find good company. Thanks so much, I feel like a total failure to be honest and can't believe I've messed up so bad.

    If you post up an SOA, we can advise you, but it would be best to do a joint one if possible. I can't do a joint one as my partner won't be helping me out, my responsibility etc. Will look into this and post it ASAP.
  • gonnawin
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    Thanks also for your reply savingholmes!! I have set up a new bank account with A&L, no overdraft but with debit card, chq book. Have no other loans or anything with them so should be ok. I do have a joint account though with HSBC (my current bank) - should I also move this to A&L to be on the safe side?
  • hypno06
    hypno06 Posts: 32,296 Forumite
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    hi there, and welcome aboard!!

    It is a huge level of debt, but it is not impossible to clear this, with a little extra effort and focus, and the help of the fab people on these boards.

    There will be times when you feel as though you are making loads of good changes, and a big difference, and there will be times where you feel you are getting nowhere, with obstacles placed in front of you every step of the way.

    BUT, whatever is happening and however you feel, there will be someone on here who has been there and done that, so you will get the support, help, advice or a virtual shoulder to cry on, whenever you need it.

    You have taken the first step - CCCS have helped a lot of people on this site, and they have a great deal of respect, things take time to settle down, but they WILL settle down, and you will soon feel a whole lot better.
    Successful women can still have their feet on the ground. They just wear better shoes. (Maud Van de Venne)
    Life begins at the end of your comfort zone (Neale Donald Walsch)
  • gonnawin
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    Thank you so much for those kind words, very very much appreciated - and needed!! I know it's going to be tough and I'm scared to death but I know it's positive in the long run.

    So here is my SOA, hope it copies properly!!

    I live with my partner, have joint mortgage but their income/exp is not included as it is all debt in my name (the secured loan is in bot our names but it was taken out t pay off my debt so I pay for it fully - I will continue with this payment as per the mortgage, the house is the main thing). I also have two dogs, but no kids. I have one car which is on HP, listed below, also to continue payments as normal (not in DMP). All other unsecured debt will probably have to go through DMP route.

    All help welcome as I keep having waves of panic whether I'm doing the right thing or not, although I don't know what else I can do. THANKS!!
  • gonnawin
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    Also, I have only had the CitiFinancial and Welcome loans for two months - would they go nuts if I go for DMP so soon??

    Thanks :(
  • bargainbetty
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    gonnawin wrote: »

    Monthly Expense Details
    Mortgage................................ 490 Is this your half, or the whole amount?
    Secured loan repayments................. 270
    Council tax............................. 60
    Electricity............................. 40 - If this is half, you need to look at reducing consumption, or changing suppliers.
    Gas..................................... 40 Same applies.
    Oil..................................... 0
    Water rates............................. 30 Same again.
    Telephone (land line)................... 14 Same
    Mobile phone............................ 45 Switch to a cheaper tariff, and reduce your usage of non-included services.
    TV Licence.............................. 7
    Satellite/Cable TV...................... 5
    Internet Services....................... 13
    Groceries etc. ......................... 120
    Clothing................................ 20
    Petrol/diesel........................... 210
    Road tax................................ 10
    Car Insurance........................... 93 This seems very high for a monthly payment - can you switch, or look at down-grading your car? Might help with petrol costs too.
    Car maintenance (including MOT)......... 20

    Pet insurance/vet bills................. 25
    Buildings insurance..................... 20 These insurances seem high. Can you look at switching providers?
    Contents insurance...................... 20

    Presents (birthday, christmas etc)...... 5
    Haircuts................................ 10
    Entertainment........................... 20

    House repairs contingency............... 15
    Meals at work........................... 15 Packed lunches?
    Dog Food................................ 20
    Contact Lenses.......................... 30
    Total monthly expenses.................. 1667


    Just a few thoughts....hope it helps a bit. Good luck sweetheart.
    Some days, it's just not worth chewing through the leather straps....
    LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!



    May grocery challenge £45.61/£120
  • gonnawin
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    Thanks bargainbetty! All figures are just my halfof the total payments. We are on DD with the gas/electricity and that's what it is, we've looked into switching but it doesn't make enough difference. I will look at it again though. Mobile phone is on fixed tariff, got another year to go on 18 mth contract. Car insurance is high because I've only been driving for the past 2 years so not enough NCB. Insurance is something we're looking to change at the moment so that will come down a bit.
    GW
  • gonnawin
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    I was told yesterday I might be able to ask for temporary breaks from payments or tiny payments for the short term - say 8 months. Rather than negotiating for full pay off and risking defaults this sounds like it could be in lenders interests?

    Does anyone have experience of this?
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