Do I really need a DMP???

MissBrokeandnotfixingit

Hi,

I finished my second degree last year, and have found that I have got myself into further debt this year - mainly due to overspending thinking I could now that I have a job and all that!! Anyway, the problem I am finding is that I can make all my repayments, but then I have so little money left at the end of the month that my only option is to get further into debt to pay for essentials like food etc.

I have contacted CCCS and been sent a DMP - but it looks so restrictive given that none of my creditors are unhappy or chasing me for money. The DMP includes my overdraft which I am not having to pay back at this moment in time due to graduate allowances.

I want to get myself into a position of managing my debt but leaving myself enough money to not have to get into further debt throughout the month. I don't have a mortgage or any large debt like that - do I really need to go down the DMP route?

My SOA is as follows:

HSBC overdraft - £1750 - £1000 int free/ £750 9.9%
Barclays overdraft - £1900 int free (pay £5 month for privilige so not really!)
Tesco credit card - £3800.19 16.9%
Egg Credit Card - £4621.98 - 2661.85 at 5.9%/ 1960.13 at 17.9%
Egg Loan - £10,862.94 - 9.9%
Barclaycard - £1627 - 6.9%

I have messed up with the Egg credit card - was offered 0% on the latter balance for 6 months and now have ended up paying a high interest on that balance transfer.

In addition to this I have a student loan but I do not need to pay this off at the moment due to my wage (earning around £21000).

Is there any way to do this without a DMP? Any advice would be gratefully received.

Cheers in advance!

GeorgeUK

If you are meeting all your minimum payments, a DMP is not necessary.
You could try filling in the SOA calculator (no need to post it up if you don't want to) http://www.makesenseofcards.com/soacalc.html
This should give you an idea of whether you are spending more each month than you actually have available and we may be able to offer some suggestions on where you can make savings if you are.

If you are managing to meet you minimum payments, you can either pay the minimum to all debts and overpay whatever you have left at the end of the month to the debt with the highest APR. This will mean you are paying less in interest in the long run. Try entering the details into the snowball calculator to see the best otder to pay them off in.
http://www.whatsthecost.com/snowball.aspx

It may be possible for you to get a new creditcard and take advantage of the longer term 0% promotions. You can usually have about 3 credit checks in a 6 month period before you credit score is affected, so it may be worth checking your credit file (free at experian if you cancel within 30 days) to see how it looks. You can also get oferred promotions as an existing customer which usually does not require a credit check - this is probably what you were offerred with egg.

Miss_Piggy_2

You do need to post your full SOA. It may be that you CAN afford to manage your debt yourself but without knowing your full outgoings its difficult to say.

Look forward to seeing it

Miss P
xx

MissBrokeandnotfixingit

Heres my SOA

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1340
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1340
Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 383.5
Management charge (leasehold property).. 0
Council tax............................. 47.6
Electricity............................. 20
Gas..................................... 20
Oil..................................... 0
Water rates............................. 15.2
Telephone (land line)................... 17
Mobile phone............................ 25
TV Licence.............................. 4
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 46.49
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 743.79

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured Debt
Unsecured Debts
Description....................Debt......Monthly...APR
Egg Loan.......................10862.....267.......9.9
Egg Credit card................1930......32........17.9
Egg Credit Card................2661......60........5.9
Tesco..........................3867......103.......16.9
HSBC overdraft.................1750......5.........9.9
Barclays overdraft.............1900......5.........9.9
Barclaycard....................1627......40........6.9
Total unsecured debts..........24597.....512.......-

Monthly Budget Summary
Total monthly income.................... 1,340
Expenses (including secured debts)...... 743.79
Available for debt repayments........... 596.21
Monthly UNsecured debt repayments....... 512
Surplus(deficit if negative)............ 84.21
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -24,597
Net Assets.............................. -24,597
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

Its worth noting that neither overdrafts are putting any pressure on me to pay them back. Also my payment to Egg is one lump sum of £93, so I've just hazarded a guess of how much goes on each debt (5.9% and 17.9%). I've been in touch with Egg and they said that if I paid a lump sum it would go off my preferential rate debt first (ie 5.9%), so not sure what to do with that one.

I've applied for a £10,000 graduate loan tonight with the aim of using it against the Tesco debt and £5000 of the Egg Loan - do you think thats wise? I've also applied to take the loan out for 7 years, as its the lowest repayment, with the aim of being able to secure more credit, so I don't end up having to get into more debt. Any thoughts on this?

Sorry for the long speel! Also if anyone has any tips on how to get back to my message thread easily I would be grateful.

Thanks everyone!

GeorgeUK

When you go to the main forum page, your name will always be first on the list.
Click that and you will be taken to your profile page.
Click find all threads started by you and you should see a shortlist of threads that you started.
Click on Do i really need a DMP.

What interest rate is the graduate loan? Not too sure how they work.

With most loans, there is a penalty for early settlement, so you should check that before paying towards the egg loan. If you do manage to get the 10k, i would pay off Tesco, then the egg card and probably the barclaycard.

How did you get cards with such low APR's? Are they on a promotional offer?

If you don't have about £80 spare at the end of each month, it may be worth keeping a spending diary so you know where you money is going. This should help you to cut any unnecessary spending and possibly find a cheaper alternative for whatever the money is being spent on.

MissBrokeandnotfixingit

The graduate loan is 8.9% - still waiting on finding out at the moment.

I managed to get offered low APRs for the cards for life, so just took the offers as they came up - just been scuppered by the Egg one now, and the interest just keeps going up on it. They've told me that next month's interest will be £39! Think I'm going to have to try and get rid of the whole credit - as they pay off the promotional rates first - as the interest rate will keep rising on that last bit which is annoying, but a lesson learnt I guess!

The Egg Loan works like a credit card, so you can pay extra off if you are able and the loan time readjusts - very handy for the current circumstance.

One other question - I have a number of loans at 9.9% - is it worth consolidating them into one so you're just paying off one lump sum - rather than having to pay little bits to different areas!

Think a spending diary is a great idea. Thanks for all your help, it really is useful at a time when I was beginning to feel a bit lost

tyllwyd

MissBrokeandnotfixingit wrote: »

One other question - I have a number of loans at 9.9% - is it worth consolidating them into one so you're just paying off one lump sum - rather than having to pay little bits to different areas!

I don't think there is a one-size-fits-all answer to that - if you got a loan at 9.9% to cover all the separate ones, if you carried on paying the same amount back in total each month that you are currently, then it would be no different. But if you cut down the amount you pay back, obviously it would take longer to pay off and you would pay more in interest over the lifetime of the loan. Then again, you might think that was worthwhile if it made your day to day life easier in the meantime.

I think you need to find the settlement figures for all the loans if you paid them off today, then you can look and see what loan you might apply for, and do the figures to compare the new loan against your current situation. Of course, that throws up whether you would be accepted for the new loan, and what interest they would actually offer you.

misspoppy

Hi

I know it seems obvious but the only way to get out of debt is to spend less or earn more, you are borrowing more which isn't the solution as so many people get into to trouble because they take out a loan and either don't pay all there debts off or keep spending so they end up in further debt then they borrow again but even more and so on.

If you've just been studying you are probably used to putting in more hours than you are working so why not look for a bar job and increase your earnings to pay off the credit cards, more debt really isn't the answer

RAS

hi

Please do not take out any more loans as they are less flexible that credit cards.

And given you have been applying for more loans and cards recently, your credit ratig will be plummeting. if you apply for more than 3 loans/cards in three months is ruins your credit rating.

I am very confused by your APrs and payments as these do not seeem consistant.

Can you list your maximum allowance on these CCs?