Debt Management Plan

stupidskintbint

Morning everyone

I last posted towards the end of last year as was contemplating taking voluntary redundancy as a way of clearing my huge credit card debts. I did put in for it but was turned down. Probably for the best and I realise I'm lucky to have kept my job.

I tried not thinking about my situation again but realise I've got to get it under control as it's starting to cause me sleepless nights. I'm in a position where I can just about afford to meet my minimum payments on credit cards but it's going to take 40+ years - in fact I'll never pay them off because I'm then short at the end of the month and end up putting back on what I had paid off. Worse, I'm getting near to my limits on all cards and I've been turned down about 4 times for a 0% balance transfer.

It probably sounds stupid (hence my nickname), but I'm really scared about having no credit cards and about ruining my credit rating. Why????

I've just completed the debt remedy on the CCCS website. It recommends a DMP (I was considering IVA - so glad I didn't!) and says if my creditors stop interest I'll be debt free in 5 years. This seems way too good to be true? Can that be right?

I just have one question really about bank accounts (as I have an overdraft) - can I open a bank account now with a debit card, will they let me keep the debit card if I then enter into a DMP?

Many thanks.

Welshdebtor

Yes you can keep using a debit card, I would reccommend moving (unless you have already) to a bank not connected to your overdraft.

gonzo127

yes the CCCS are a excellent way forward for you and i would believe what they say (so long as you have been 100% honest and accurate with your details) the big problem is the 'if the creditor agree' now you will normally find most do eventually, some will play 'hard ball' but if you take out a plan with the debt charities you always have their back up anyway so that helps a lot

now you can get a bank account with a debit card so long as it doesnt have a overdraft, mainly because you will not need a credit check as they will only let you take out what you have in so are not adding to your debt with an overdraft quite a few places do these 'basic' bank accounts and this would probably be the way forward for you just try to make sure you get a bank which isnt linked to any of your creditor as there is a practice called offsetting in which a bank can 'dip' into your account for money you owe them

lozzam

They always say if something sounds too good to be true then it usually isn't true. In this case it is true, but it will involve sacrifice - you will need to cut back and stop all those bad habits that led to getting into debt in the first place.

The other thing to bear in mind is that creditors will start adding interest again once the debt levels have decreased, but hopefully they will stay quite low. And by then you will be used to being frugal and/or had pay rises so you can increase the amount you pay and keep close to the five year timeline.

stupidskintbint

Hi

Thanks for that - especially the bit about linked accounts as I was thinking about Alliance & Leicester but I think they may be linked to Abbey??

I'm really glad you think the DMP is the way forward - I already feel as though a massive black cloud has been lifted and that's without actually taking any action, it's just knowing that I could actually be debt free is such a short space of time.

So first step is opening the bank account with no overdraft facility and then applying to the CCCS?

Welshdebtor

Yes they are all now Santander.
Yes check out basic accounts, then get a DMP underway. Good luck.

stupidskintbint

Thanks lozzam - in September I won't have to pay massive childcare fees and will be over £600pm better off - this is extra money that I want to use to pay off the debts quicker.

The budget planner covers things that I never ever budget for - like a monthly amount for car tax and car insurance, haircuts etc. It calculated what seemed a generous amount for shopping each month. It's thngs like that that I've never budgeted for that I end up putting on the cards.

I'm aware that I have awful spending habits, and that's probably why I'm scared - but the truth is that because I'm so near my limits on my cards it's all going to crash round my ears. Hopefully I can now do this the right way as I haven't yet missed any payments.

Feeling slightly hopeful and slightly scared. Have got to bite the bullet. Don't understand why I'm feeling scared about a no-brainer

VicB

stupidskintbint wrote: »

Morning everyone

I last posted towards the end of last year as was contemplating taking voluntary redundancy as a way of clearing my huge credit card debts. I did put in for it but was turned down. Probably for the best and I realise I'm lucky to have kept my job.

I tried not thinking about my situation again but realise I've got to get it under control as it's starting to cause me sleepless nights. I'm in a position where I can just about afford to meet my minimum payments on credit cards but it's going to take 40+ years - in fact I'll never pay them off because I'm then short at the end of the month and end up putting back on what I had paid off. Worse, I'm getting near to my limits on all cards and I've been turned down about 4 times for a 0% balance transfer.

It probably sounds stupid (hence my nickname), but I'm really scared about having no credit cards and about ruining my credit rating. Why????

I've just completed the debt remedy on the CCCS website. It recommends a DMP (I was considering IVA - so glad I didn't!) and says if my creditors stop interest I'll be debt free in 5 years. This seems way too good to be true? Can that be right?

I just have one question really about bank accounts (as I have an overdraft) - can I open a bank account now with a debit card, will they let me keep the debit card if I then enter into a DMP?

Many thanks.

Well done on your 'lightbulb moment', you've made great steps towards being a fully fledged debt-free wannabe!

Sounds like you've done exactly what I did, the CCCS is a great source for help and support.

RE Debit Cards - CCCS recommend that you open a new current account for your wages to go into, having a debit card is fine, but you shouldn't have an overdraft attached to it. I also wouldn't open a new a/c with any of your current creditors or any that are linked with each other (wikipedia will tell you which credit cards / banks are linked).

I've just opened up a new current a/c with NatWest no problem

Unfortunately you'll need to prepare yourself for the fact that your credit rating will fall massively once you start a DMP, but in my opinion it was this vs being in debt that I couldn't see myself getting out of...ever! I don't want to scare you :eek: but it is something you should consider.

Good luck with everything, being without your CCs is a scary prospect but you really are doing the right thing :T

gonzo127

stupidskintbint wrote: »

Thanks lozzam - in September I won't have to pay massive childcare fees and will be over £600pm better off - this is extra money that I want to use to pay off the debts quicker.

The budget planner covers things that I never ever budget for - like a monthly amount for car tax and car insurance, haircuts etc. It calculated what seemed a generous amount for shopping each month. It's thngs like that that I've never budgeted for that I end up putting on the cards.

I'm aware that I have awful spending habits, and that's probably why I'm scared - but the truth is that because I'm so near my limits on my cards it's all going to crash round my ears. Hopefully I can now do this the right way as I haven't yet missed any payments.

Feeling slightly hopeful and slightly scared. Have got to bite the bullet. Don't understand why I'm feeling scared about a no-brainer

thats why the SOA is such a powerful tool makes you think about the extra's which are a part of life but which never feature in a normal home made budget, however if you want to post your SOA here everyone will be more than happy to go through it for you and try and spot places which seem high or things you might have not thought about + ideas on how to change things

i think you are scared because you are looking at commiting to a life changing deal, just the same as people get scared before they get married! its not a bad thing, you know its what you want, but its natural to double guess yourself, but it will probably be one of the best things you will ever do!

Aguilk

I have been in a DMP for 3 years, We are claiming back PPI at the moment and slowly suceeding. But also with regards to your credit rating it doesn't stay trashed forever... lol.... mine is getting to a reasonable score now but i certinally dont intend to apply for any credit anywhere!

If you are looking for an account a good place to try is Thinkbanking.co.uk (account provided by RBS)
They are tailored for people in a DMP, you have a salaries account which all you DD go out of and all you wages go into.

Once your wages go in they keep the amount for the DD and transfer the remaining amount into a card account which does have a credit card but it means you never over spend, even if you have no money go in and you DD fail there is no charge!!! I love this about the account as i was recently made redundant so all my DD were failing but i never got charged by the bank once!!!

May be worth looking into!

stupidskintbint

Thanks VicB

I really appreciate your comments about bank accounts, I've never used Wikepedia before - do you just put in the name of your credit accounts and it tells you which bank they're linked to?

I'll do that this afternoon then apply. Should I arrange for the salaries to be paid into the new account before I apply to CCCS or at the same time?

My excellent credit rating isn't helping me anyway - I must be at the top of my borrowing limits which is why I can't get another 0% deal?