Need Some Debt Help!! Bankruptcy, Iva Or Dmp??

kalfy1

Hi MS Experts

I would really appreciate some advice on my debt problems. Firstly I will tell you the story, not goin into too much detail and then you can make of it what you like. But from what I have seen on here, you have all be offering some fantastic advice.

I admit I am one of the worlds worst I am sure with money control....UNTIL NOW! It has taken me to be in nearly £100k of unsecured debt to realise this!

I only earn £7500 on a 16 hour week, with 2 young children and benefits of £1100 per month.

What I have been doing which is typical I suspect of most people in debt is borrowing from Peter to Pay off Paul.....Until I maxed out everything and nobody would lend me anymore. I am even stuck in a situation, where my car finance is up in September after 2 years of NO missed payments, but with a balloon payment to meet too......and they won't allow me to borrow anymore to hand it back and buy another from them!....GONNA HAVE TO FACE FACTS AND GET A BANGER!!!

Anyway...2 months ago, I realised that I couldn't carry on any longer with my £100k of debt and a company called Churchwood Financial was recommended to me for a DMP. They charge approx 15% to manage it, which I know seems a lot, but to have them do all direct dealings with my creditors seems an OK amount. But what do you all think?? Are you normally tied in to these companies, can you go elsewhere do you know? I don't have the time to sit and deal with all of my creditors myself, so it does seem the easy option.

I have been told that I don't have enough disposable income for an IVA, so DMP was my only option or Bankruptcy. However, I work for a large banking firm in a job where it is normally me dealing with people like myself..NOT THE OTHER WAY ROUND! so I suspect I will not have a job left if I were to go bankrupt. Even after 6 years loyal service I suspect!

I have had my debts passed to a few Pesky debt collection agencies...but I just won't deal with them, I tell them to go directly to my DM company and hang up. Then I choose to refuse their call. Which is an option I have taken out with BT to stop the harrassment. A few of them have called my work....even left their name and where they are from! WHAT A CHEEK.

Anway, I also recon I am paying a bit too much for what I can afford realistically on my DMP. So I was wondering whether I could reduce these, I don't know what a suitable amount would be. Would you all like me to list my debts? I could dig out the amounts for you to help me. I am not chuffed though about these at all and it really hurts me to even look at the figures.

At least one thing I am safe in the knowledge of though is that I have my husbands 100% support. He found out when it all came to a head as mentioned above approx 2 months ago. He has been fantastic, not gone off on one at all. which I was so suprised about. It was a huge relief to know he was there for me.

I know this is all my fault entirely with only me to blame. But as mentioned above I only earn £7500 per annum doing 16 hours a week.... one of my credit cards...HALIFAX PLATINUM....upped my limit from £3000 to £17,500 in only 2 years!!!! How can they justify that on my income. They don't even check anybodies changes in circumstances!!! Capital One Platinum started me off on £8k!!!

Please help anyone, any advice is better than no advice. And it makes things seem better when you talk to people who don't judge you.

I will try and dig out the amounts for you all.

bonnie_2

defianately post your statement of affairs, and i would be wary of dmps that charge 15% which could go to paying of your debts, you can get exactly the same service for free from ccss, payplan or cab.
welcome on board.

rchddap1

By going to a company that charges 15% you are throwing even more money away. Go to CCCS, or payplan to get good advice for free. They will be able to tell you if a DMP is the way to go, or if it would be better to go for bankruptcy.

Also, when getting credit you have to remember that it is your responsibility to make sure that you can pay for it all. Just because a company offers you more credit it doesn't mean that you have to use it. Many people will call the company up and ask them to reduce their limit back to what it was before.

kalfy1

OK HERE GOES WITH WHAT I OWE!

HSBC - 2K OVERDRAFT
HSBC - 15K LOAN
HSBC - 2K CARD
IF.COM - 3500 CARD
CAP 1 - 6600 CARD
HALIFAX - 18500 CARD
SAINSBURYS - 8700 CARD
SAINSBURYS - 6500 CARD NO2
AA - 14600 LOAN
EGG - 14000 LOAN
EGG - 500 CARD
BARCLAYCARD - 980 CARD
MBNA - 5000 CARD

TOTAL - £97,880
AT PRESENT PAYING £300 PCM THROUGH DMP - BUT REALISTICALLY CAN ONLY AFFORD £150 !!!

CAR FINANCE £75.19 PER MTH, NOT INCLUDED IN DMP
NEXT ACCOUNT £2800 NOT INC IN DMP - £250

INCOME - £625 PCM
BONUS - £148 PCM (GUARRANTEED)
BENEFITS - £1100 PCM
HUSBANDS SALARY - £400 (JUST STARTED OWN BUSINESS, NOT MAKING MUCH YET)

TOTAL INCOME- £2273 PCM

OUTGOINGS
RENT - £595
PHONE - £30
MOBILE - £30
FOOD - £200
CAR FINANCE - £75.19
NEXT- £250
DMP - £300
NURSERY FEES - £285
GAS - £25
ELEC - £32.14
Water - £25
COUNCIL TAX - £108
PETROL - £160
INSURANCE CAR - £25 (CHEAPEST I COULD FIND)

TOTAL - £2140.33
LEFT OVER - £132.67

AND THIS IS MEANT TO BE FOR ANYTHING ELSE THAT COULD ARISE, ESPECIALLY CLOTHING EXPENSES FOR KIDS PROBS WITH CAR ETC ETC. WE ALREADY GET FREE PRESCRIPTIONS, SO NO COST THERE. BUT I AM SURE I COULD GET MY DMP DOWN AND MOVED...THANK YOU, GONNA LOOK AT PAYPLAN. DO THEY DO NEGOTIATIONS WITH CREDITORS, OR WOULD I HAVE TO DO YOU KNOW??

madison's_mum

Hi,
When you set up your DMP did you not go through the budget? We are with CCCS (free service and recognised by all our creditors). They went through everything we owed then all our income then essential outgoings which included our car finance. They then took they remainder and contacted the creditors with the budget etc and they all accepted it. If you have agreed to the DMP at £300 and can only afford £150 then i think you def need to redo it. 15% seems quite alot of money to charge to people in our situation!!!
J

kalfy1

madison's_mum wrote:

Hi,
When you set up your DMP did you not go through the budget? We are with CCCS (free service and recognised by all our creditors). They went through everything we owed then all our income then essential outgoings which included our car finance. They then took they remainder and contacted the creditors with the budget etc and they all accepted it. If you have agreed to the DMP at £300 and can only afford £150 then i think you def need to redo it. 15% seems quite alot of money to charge to people in our situation!!!
J

Thanks MM

I went through a very quick budget with them over the phone, but they broke it down to actually £405, but I said no £300 was the best I could do, but now it has run for a couple of months, I am realising that it doesn't leave us enough breathing space. I am trying to dig out my things with the DM company to see where I stand with cancelling with them. 15% I agree is a lot, but I thought it was the norm and didn't know any better and at least the creditors would have to deal with them, which of course has proven incorrect as they still contact & harrass me, but after reading some other threads, I now know what to say to them. As it goes, only capital one have confirmed that they have received a payment from me, but still want me to pay £600 arrears straight away.....where do they think I am gonna get the money from???!!!

Thanks for your help
Kalfy1

in*the*red_6

Hi Kalfy1

I've no direct experience of DMPs but what strikes me is that at your current payment levels it will take you about 31 years to pay your debts off and if you reduce it to £150 per month I think it will take you approx 54 years. Realistically you're never going to pay it off at this rate unless you can see a significant change in fortunes coming. Maybe one of the other routes would be better for you, but discuss with Payplan and they will advise.

ITR

kalfy1

in*the*red wrote:

Hi Kalfy1

I've no direct experience of DMPs but what strikes me is that at your current payment levels it will take you about 31 years to pay your debts off and if you reduce it to £150 per month I think it will take you approx 54 years. Realistically you're never going to pay it off at this rate unless you can see a significant change in fortunes coming. Maybe one of the other routes would be better for you, but discuss with Payplan and they will advise.

ITR

Exactly what I was thinking, my other option would be baunkruptcy. But I am sure iwould lose my job, and I recon if I went elsewhere for work, I would be on half the money for the hours I do.
I called PAYPLAN just now, and they are gonna get an advisor to call me back next Thursday when the kids are at nursery together, so I can go thru things properly. Hopefully...but not holding my breath! gonna get my fees back from my previous DMP, whom I am gonna cancel asap!! Thank you

frugglewump

Definately talk to CCCS or Payplan.
The biggest thing I see is that your next catalogue is not included in the DMP - CCCS & Payplan insist on disclosure of all debts and if that £250 a month is removed it could give you that breathing room you need. Obviously the DMP might go up a bit, but these people do work out realistic amounts for you to live on.

Edited to add: I don't have personal experience so can't say what they would do about the car payments, but you would need to tell them if only so they can budget properly.

sparkle84

Firstly I would stop paying the DMP company straight away and speak to payplan or cccs.

I really think in your circumstances (and I don't say this lightly) you should strongly consider bankrupcy you cannot pay back £100,000 of debt on you income - I also work for a bank I think you should speak to your HR department and see what your position would be, often unless you are actually dealing with money it would be ok for you to become bankrupt - you could also try finding another job away from financial services. I would also make an appointment at your local CAB office to discuss bankrupcy.

We are all in the same boat here and you will get both emotional and practical support here but we are responsible for our debts and how you got this amount of credit on your income even taking into account reckless lending by the banks is beyond me

in*the*red_6

kalfy1 wrote:

Exactly what I was thinking, my other option would be baunkruptcy. But I am sure iwould lose my job, and I recon if I went elsewhere for work, I would be on half the money for the hours I do.
I called PAYPLAN just now, and they are gonna get an advisor to call me back next Thursday when the kids are at nursery together, so I can go thru things properly. Hopefully...but not holding my breath! gonna get my fees back from my previous DMP, whom I am gonna cancel asap!! Thank you

I think that's definitely a good idea.

As for the job, even if it pays well, is it worth keeping you in debt for the next 50 years?