Questions about ramifications of a DMP with CCCS..

overdraftoverdrive

Hi, i'm looking for some impartial advice about CCCS and i hope i've come to the right place!

I'm 25 and recently took the step of calling them and admitting i was in trouble as I lost my job in december and have to pay £100 repayments a month on lots of small debts. This is only just feasible for me and involves a lot of robbing peter to pay paul. However its a big stress. I have lots of small debts in about 7 places, totalling 3k. They are mainly long standing debts too.

I called CCCS and they were brilliant, i must say. The people on the phone were really on my side and totally supported me, and were really trying to be realistic and also hypothetical about the money i needed to live on. They made me realise that my situation was not suddenly going to get better and that it was pretty bad if i couldnt even afford haircuts or clothing or any socialising. The advisor told me i could not carry on like this, and I would benefit from a DMP where i make one monthly payment each month. I'm not in arrears but i do have a bad credit rating. i however do have a clean bank account, with a £1000 overdraft and no history of going overdrawn or whatever. I was told i would need to include my bank account and overdraft and one of my credit cards that i have no issues with in with my DMP for it to work. Furthermore, all of my banks and creditors would be informed. I'm a bit reticent about this as i have been trying to rebuild my credit. I'm also a bit frightened of the form i need to sign saying i will not apply for any more credit, as i'm going back to university this year and it's scary stuff, as i haven't lived without credit since i was 18!

i understand why they are saying all of this, and my counsellor said he can get my payments down to £30 per month, which is brilliant. but it seems a big step to take, and i'm worried about the ramifications of being on a DMP. can anybody tell me any more about this, somebody who has been on one and how it affects your future credit. I'm just worried that after i graduate i won't be able to get a mortgage if i'm effectively declaring myself insolvent and I'm worried about how a DMP will impact me in the future. As much as i am happy about the arangement, i can't help feeling a bit nervous about taking these steps. Thanks!

jtr2803

Hi there!!

I am on a DMP, not with CCCS but with PayPlan. I can sympathise with being scared of living with credit but it sounds like that is exactly what you need to in order not to make your situation worse. I have had no credit card/overdraft/loans for almost three years now, it isn't 'hard' - you just need to adjust to it.

When I went onto my DMP I did end up defaulting on a few debts as I wasn't offering what I had contracturally agreed to pay. I don't think there are any guarantee's that you will not be defaulted by your creditors although some may mark you as having an 'arrangement to pay'.

As you have said - to go on the DMP and reduce your payments you would have a much better standard of life and know that you're debt is being managed, it is surely worth it for you to have a clean slate?

Best of luck in whatever you decide, just stick to it :beer:

DevonGirl

Hi ODOD and welcome! :beer:
Have you thought about posting a statement of affairs (SOA) on this thread so that people can get a full picture of your finances before providing help? There is a template on one of the Stickys at the start of this forum. It's surprising how many things people point out that you may not have noticed yourself.

Just to point out that going on a DMP is not declaring yourself insolvent, but yes, will affect your credit rating (defaulting on a credit agreement may be listed on your credit score) and ability to get the cheapest mortgage rates. But speaking personally as a DMP-er, credit is the last thing I want because that's how I got in the mess I'm in!

There may be other ways of solving your debt problems which are less 'restrictive' than DMPs, IVAs, BR etc, such as snowballing your debts, just doing a major overhaul of your expenses etc etc. I'm a Newbie myself but I'm sure someone experienced will come along soon esp once you post a SOA.

Best of luck whatever you decide to do!
DG

insideinfo

Hi ODOD, I can understand your issues with the DMP/Credit File ramifications, but seriously, don't worry about your future credit rating just now. Think as the OP said, about your standard of living. The Bank's are screwed and will only lend to "perfect" candidates for some time to come. An IVA is not an option as you dont have enough debt, and you are only 25 so going BR at your age is possible but the judge wouldn't want such a yound person to go that route if you could go the DMP route. Perhaps you should enter the DMP and take time to think things through. Credit hasn't done you any favours so far. You can live without it.