Bad Debt - Really Scared

scoutkvm

Hi everyone

Just joined the boards and wanted some help with a bad debt that I have

About 8 or 9 years ago I was in bad debt with a loan, credit cards and bank overdraft at around 20 grand. I was struggling to keep up with the paymens and consulted a debt management company (don't want to say who in case they read this board, but it begins with D) who said they could help and agreed a DMP of £174 to clear the debt (which is still being paid) and was advised that it would take 5 years to pay off. I believe that there is currently around £9000 still to pay

About three years after starting the DMP I was able to obtain further credit cards and now have 4 of them, have been using them and paying them off each month at minimum payments which now have a total debt of around £7500, but I did not make the debt management company aware of the additional credit until the following happened. I realise now that obtaining the extra credit was a mistake but thought I was ok until this happened..

At the end of September I received a letter from one of the original creditors from the DMP advising that as they had a CCJ against their part of my debt, they were demanding full payment of approx £950 in 21 days or else they would request a statuatory demand, make me bankrupt and the bailiffs were coming etc.,

So I contacted the debt management company who advised to send in the letter and they would look into deal with it. Then the worry and stress kicked in over the undisclosed additional credit I had, and in one of the phone conversations I had, offered to pay an additional £100 to increase my payments. This resulted with me coming clean and being requested to complete an updated Financial Statement. I had not updated my statement of affairs since originally starting the DMP and as I had had pay rises since starting I was earning more but paying the same. So I sent them all the info back as to what I was paying out for now and what was left over.

They advised me Friday that as from the next payment due date I would need to pay them £620 which would make me debt free in 2 1/2 years but I am now worried to death over my finances and what is to pay out that I don't know what to do. From reading other posts on this board this company take a management fee before paying creditors so I don't know from this new figure what they are taking and what is being paid out. As far as I am aware, the creditor chasing me has not been made aware of the new debts I have, (they have nor contacted me since I receiving the letter and there seems to be some stalling from the debt management company contacting the creditor) and now I am being offered a new settlement fee. I don't know who to trust. The main priority being put to me is that I get my wage out of my bank as soon as it goes in and pay into another bank account.

The debt management company are due to ring me tomorrow lunch to find out if I have been able to change payment of my wage from my current bank to a new bank before being paid on Wednesday (i can't as my employer has already done payroll for this month), so I don't know what to do.

For info, I currently earn £1088 a month and with paying board to my parents and everything else I'm worried I'm not going to have enough left to cover things like dinners when at work, clothing and anything else that may come up. The debt mangement company advised that they had included things like this in my revised financial statement, but when they said they would only put sky payment as £21 instead of the £57 it's costing me now, I panicked. I also have a mobile at £35/m, insurance £7/m, Internet £18/m and DVD rental £14/m. I currently pay my parents £150/m and this covers a small share of utilities, council tax, tv licence and phone line rental, food, etc. My parents (who are pensioners) have already told me that I will need to pay them more as bills are going up

I'm sorry if this too longwinded but I am desperate for any help or advice that
anyone can give me

Thank you

poorandindenial

Hi Scoutkvm

You have quite a complicated situation so I would recommend that you get in touch with one of the free to use debt charities ASAP. The company you are dealing with should have come clean with your creditors when you came clean with them and they are pushing you towards getting into more debt by setting payments at a level you won't be able to sustain.

This link:

http://www.moneysavingexpert.com/loans/debt-help-plan#help

Has a list of all the not for profit orgs that can help you. They can take over your DMP for you, if you have problems with getting accepted by the first one you contact (because of your breach of terms of a prior DMP by getting more credit) then don't lose heart and contact another one. Even if they can't run it for you they should still give you advice for you to run your own which will still save you a fortune compared to the company you are currently with

All the best in getting this sorted out.

scoutkvm

Thanks poorandindenial for your advice

I am going to ring CCCS first thing tomorrow to see if they can help if not will try the others as suggested

scaredy_cat

i don't know if someone else can advise - but as scoutkvm is with a fee paying DMP, can he cancell this and start a new DMP with CCCS or Payplan so that at least all the money he is paying goes to the creditors?

poorandindenial

scaredy_cat wrote: »

i don't know if someone else can advise - but as scoutkvm is with a fee paying DMP, can he cancell this and start a new DMP with CCCS or Payplan so that at least all the money he is paying goes to the creditors?

Yup - should be fine - lots of people on here have done it, CCCS etc can advise scoutkvm on how to do this as timing could be a pain

sarriep

You do pay out some very high costs though! I really don't think you can afford £57 for sky, £35 for mobiles, and DVD rental £14!!
You could post a revised SOA for some advice on here too. I would definately contact CCCS for some advice but be careful, they will NOT allow you to take out more credit and I think would cancel your DMP if you did! But they are very helpful and definitely worth talking to!
Best of luck
Sx

scoutkvm

Thanks everyone for your advice

I am going to reduce the sky down to £47 and get rid of the multiroom option. I am also going to cancel the DVD rental now online

If CCCS did accept me, would the new repayment cost be the same as i've been offiered (£620) or is likely to be more or less

poorandindenial

Me again

They would work out what you can AFFORD to pay and then offer that pro rata to your creditors. the £620 sounds like it is unaffordable for you in which case it would probably be lower but it is hard to say without all the info.

As far as sky goes ditch as much as you can and bundle your internet up with it if poss (if you can get out of that contract) you could save a bit. Worth checking with them.

Edit: I just saw that you were worried that the company had tried to reduce your allowance for sky to £21, you may find that this is an amount set down in guidelines and that all have to stick to it (if you look at it from the perspective of the people that you owe money to it looks unfair if you are spending £60pcm on Sky and they are only getting half of what you owe them per month if you see what I mean)

scaredy_cat

from what i've seen from other people's posts, CCCS allow you enough to cover all your expenditures and a bit to cover emergencies and birthdays, adn then what's left they take to pay the creditors. You might not be able to have a takeaway every week, or go out for a meal every week but if you scrimp a little bit you can save for extras.

Have a look on the Money Saving the Old Fashioned Way boards.

I've joined quidico and got £30ish in cashback in a few weeks.

anniecave

agree with your parents a higher amount to pay to them each month (utitlity bills have gone up anyway so this is only reasonable) and get your lunches whilst at work included in this. Then take sandwiches with you to work each day - that'll save you loads!

scaredy_cat

i think you should leave your courrent DMP and get a DMP with CCCs whatever happens, as they don't take a fee so you would be paying more off your debt and be clear of it sooner.