Worried about starting a DMP

geb0205

Hi there, first off I should say I'm new to the site (for those who don't read people's stats!) I'm currently self employed and working in the private health industry, but have alot of debt run up from studying between 2002 and 2006.

For almost 3 years now I've struggled on paying the original full monthly repayments, and with the current economic climate, its becoming a huge struggle. Just about all of my current income is going straight back out again to pay repayments and nominal bills like my mobile phone bill (£20 a month).

I was advised by a friend to contact the National Debt Line, who put me in touch with Business Debtline because I am self employed, running my own business.

Now, I've got all the info for a DMP, they've worked through my budget with me an tweaked it to I end up paying £211 a month instead of £800 a month. Thats a HUGE difference (and makes my debts last 5 years longer than the 5 years I have left of them).

There is still a part of me that is reluctant to send back that info pack with all my details in it. I'm worried what it will be like to try and get credit in the future (after the DMP!!) should I need it, and things like will it affect me opening a bank account etc.

I suppose really I'm after a bit of support that this is the right thing to do, I'm terrified of losing my car (on hire purchase) as then I can't get to work... I'm terrified of what happens if (Natwest probably!) say no to the DMP, what happens then? What if they take me to court... Do creditors constantly hassle you to pay more money?

Of course, I'd put as much in the DMP as possible, but at the moment, just to be able to have fish and chips one night would be lovely, not just having to scrape every penny from anywhere to get petrol for the car.

Help!

Tixy

Hi Geb and welcome

You will find there are lots of people on here doing DMPs and for most it has been life altertering - the stress and hassle of wondering when it will all end and if you will be able to make the payments does disappear, although not overnight. I'll try and answer some of your worries....

In truth it will be difficult to get credit for a while after your DMP, but surprisingly maybe not for as long as you may imagine -although defaults and other items appear on your credit record for 6years, you are likely to get the majority of these around 6months after you start your DMP so by the time its finished many will no longer show on your report - instead you will be left with markers for arrangement to pay, or possibly partially satisfied debts (if you decide to make reduced settlement payments sometime down the line).

There are tips on how to improve your credit rating on the site which can be implemented towards the end of your DMP. And you may find that, with the exception of a mortgage, many people end their DMP with a decision not to use credit in future.

If you need to open a bank account you will be able to open a basic bank account, which have most of the features of regular accounts but don't have overdrafts. Basic accounts don't require credit checks and all the main banks offer them (but don't advertise them).

In all honesty I'm not sure about the car, my understanding is that as a secured debt it doesn't form part of the DMP and so providing you make payments on time then it should not be at risk.

Most creditors do eventually agree to the DMP, especially as you are using one of the recognised free providers of DMPs. What you will probably find is that for the first month or 2 you will get phone calls and letters from your creditors hassling you trying to get extra money before the DMP officially starts. All you need do is quote your Business Debtline reference and hang up or if you get letters just send them on to BDL. After a month or 2 it settles down and then they tend to contact you every 6months or year.

It is possible you could get CCJs but suprisingly this isn't as catestrophic as you might think - if you get court papers through during your DMP these are the only papers not to send on to your DMP provider - instead come here for advice. Essentially you need to provide the court with proof of your financial details and what you can afford to pay (which will be the same as what you are paying via your DMP), and this is usually taken into account by the judge.

Once you are settled into your DMP you will be able to work at cutting your spending without noticing it greatly (using the many tips here on MSE) and you will definatley be able to afford the odd takeaway or fish & chips - honestly.

Sorry this wasn't meant to be such a marathon post but hope it helps you a bit.

Tixy

geb0205

Thanks Tixy, I've sat and filled in all the bumph and done all my letters to creditors this evening. Trying to convince myself its the right thing to do. Its strange how depressed the whole debt issue can make you feel..

Nargleblast

You will find that once a structured repayment plan is in place you will feel as if a big weight has gone from your shoulders, so be brave - the sooner you start it off the sooner the debts will be gone!