Been in contact with CCCS not sure what to do now??

prince_percy

Hi everyone, newbie here

I have spoken to the CCCS this week as i have finally woken up to the fact that my level of debt has got out of control. I went through the budget with the advisor and i think i can make more savings if need be.

They were unable to offer me a DMP as i owe money to my dad and i'm not willing to offer to pay him less each month as he needs the money for his retirement. However they advised me to write to all my creditors and offer pro-rata payments which i am happy to do. Does any one else had any success with this??

I am also due to pay all my bills at the beginning of next month, do i just sent a cheque with the offer payments? What happens after that, if they agree do i set up a DD to cover the agreed amount?

I have only missed one payment in the last 2 months and been late on 3. I am only just short of being able to meet my monthly obligations but it is unsustainable so i want to get back on track and then clear the debt as quickly as possible.

One last question how will this affect future mortgage applications? i'm on a fixed until end of 2011.

Thank you in advance/

getinmyselfoutadebt

hi percy

how long will it take you to pay your dad back?

Hopefully somebodyy will be along soon who can help with your questions

Tixy

Hi and welcome

Will try to answer everything

Yes a lot of people do self-manage their dmp, for reasons like you have managed. Did CCCS give you some letter templates or help on working out pro-rata payments - the key thing is to pro-rata based on the balance you owe not the monthly payments.
National debtline website has templates etc if you need.

There is a DMP mutual support thread where people will offer you help and guidance as you go along.

First I would write to your creditors, explain the position and your budget and enclose the first token payment. Then also ask for standing order details.

Cancel your dds and set up standing order details when you can (co you then control the payment amount).

As soon as you start paying less than the minimum you will almost certainly get defaults (usually after 3months or so) it is inevitable on any DMP. These will stay on your credit file for 6years. You should bea able to remortgage on a DMP but you will not get the best rates.

You could post up your budget here for more suggestions on extra savings/money saving to be made to make sure you can repay as quick as you can.

Good lcuk.

InDeepDebt

Have you done a statement of affairs?

How much are your minimum payments now, how much do you pay your dad and how much have you got available.

From my experience, some creditors will accept 1% of the balance, some want more - but they may accept less than their minimum payment amount.

If you self administer your DMP, you may be surprised how flexible some of your creditors are.

Any chance of posting up a statement of affairs. Some posters may then be able to advise what luck they have had.

Jim

prince_percy

Thanks for the advice.

CCCS gave me the templates for the letter so i am able to use them. I'm still working on my SOS as the one i completed with the CCCS is a bit out. I'm hopping to get it typed up today and will post up here.

I pay my dad £150 a month. I still owe him £9000 but i kind of count it as part of my mortgage because he lent us the money for a deposit.

I can make most of my min payments at the moment but it does leave any left for emergencies which is how the debt has snowballed in the last 18 months.

prince_percy

Income.................................£2340
Child benefit..............................80
Child Tax...................................40
Total.....................................£2460

mortgage.............................£704
TV........................................£ 12
Water....................................£ 12
Council Tax..........................£ 97.52
Gas/Electric..........................£ 37
Phone....................................£24
Mobile..................................£20
Home insurance....................£16
Petrol....................................£160
Car Tax.................................£ 27.50
Servicing/MOT......................£50
Insuranc2e...............................£47
Food......................................£280
Xmas/holiday/sundries...........£41
Clothes...................................£25
Dog food................................£40
Entertainment/leisure.............£30
Loan to dad............................£150

Total........................................£1726.02
Assets

Ford Mondeo..........................£2000
Renault Megane......................£ 500
House......................................£140000 (Aprox)

Creditor
Balance
Min payment
apr
Hsbc Loan 11500 324 10.9%
HSBC Credit Card 1990 60 20.1
Virgin Credit Card 1854 60 19.9
Barclay Card 2300 51.35 6.9 fixed
Halifax 1010 10 4.1 fixed
Egg 1840 40 6.1 fixed
Asda 490 10 19.9
Tesco 2200 44 0% end may 05
Homebase 170 10 29.9
HSBC Credit card (wife)4480 120 19.9
Mbna Credit Card (Wife)4788 130 19.9
Tesco Credit Card (Wife)2280 44 19.9
HSBC OD 400 10 19
HSBC OD 250 10
First Direct OD 500
Barclays OD 750 10
Barclays OD (Wife) 1600 40 19

Total to service debt £914.35

I'm getting all my bills through for next month so will send out the letters with offer. Just need to set up some new bank accounts now.

WASHER

Welcome to MSE.

A couple of things stand out to me, is your water correct? It seems far too low, as does your gas and electricity.

Do not open the bank account with anyone you have any debt with and that includes overdrafts etc, watch out as alot of banks are associated with other banks, i.e. Lloyds are tied with the Halifax and Bank of Scotland.

prince_percy

My water bill is only £160 a year, i don't know why it is so cheap but i'm not complaining!!

I changed gas/electric in September and have not had the bill yet but i'm not a high user, don't put heating on much, have a combi boiler that is very efficient.

I am going to open a bank account with Nationwide for all house hold bills and the open a couple of savings account for things like cars, holidays and emergencies.

I am working our pro rata payments now and had a thought. What happens if i can't make the payment i request? can i offer less? or should i make sure my budget is as accurate as possible before i make the offers??

Thanks

WASHER

make sure the budget is accurate as possible before you make any offers, creditors will not take kindly to you not paying what you said you could afford in the first place.

Remember too, the same applies to savings accounts as well as current accounts, be careful who you open one with.

Tixy

Hi

That budget doesn't look too bad - I assume it is for 2 adults and 1 child?
Just a small point, your child benefit should be included as the monthly figure not a 4 week figure so its actually £86.6 (not that it makes much difference but your creditors could notice) - same with tax credit is that a 4week figure?

I agree with Washer to make sure you have enough in your budget for utilities and water as it does seem low - you could up them a little in the budget you send to your creditors to give you some leeway if prices go up (my water is about that price for 1 person so do double check).

Is broadband in with the phone cost? Is all petrol/diesel used on essential journeys?

Your groceries could probably be reduced a little (not necessarily on the budget the creditors see, but in practice you should be able to get this down a bit).
Have you had next years council tax bill through? and have you based your figure on the new rate?

So your minimums are around £914, compared to the £734 you have available.

Total debts are £38402
Available to service debts £734 (subject to any changes)

So each creditor will be getting around £1.91 each month for every £100 you owe as at today.

I should imagine that creditors will be fairly okay with that level. In any DMP you do tend to get a bit of hassle for the first month or 2, but then most creditors do settle down.

In the budget you send to creditors either don't include the value of the house or if you do, make sure you put in the value of your mortgage as well. If you have equity I would omit both out.

Are you going to send the pro-rata payments this month? Did you pay token payments for 1month. As an option you could send your creditors a 'holding letter' for one month and just pay each creditor a token payment of say £5 and say you are seeking advice.
That one month of token payments could allow you to build up small emergency fund of a few hundred, you could possibly also pay off the homebase card as its such a small amount.
Then next month you could write again this time enclosing the income & expenditure and setting out the repayment offer to each creditor and set up the new standing orders to each one.
You may or may not want to do this - obviously it means that it will take you a tiny bit longer to pay off the debts, and possibly could mean extra charges but some people do use it.
If you did want to this is the 'holding letter' - http://forums.moneysavingexpert.com/showpost.html?p=21937969&postcount=52

CCCS have explained that going to prorata payments will mean you get defaults haven't they?

(Sorry you have answered a couple of these whilst I was typing this mammoth reply!)

InDeepDebt

As I see it, you are down by about £200 a month. Or, put another way, you have £733 available for your unsecured creditors (and they are after £914).

Now before taking my advice, see what others think but, because in theory the loan to your dad should also be pro rata, this should also be knocked down to about £124.

Calculation:

£150 divided by (£914 + £150), multiply result by (£733 + £150)

Your food bill seems low - can you not up this by £26 and use this money for paying your dad instead?

As mentioned though, see what others think first - I'm new to this game.


Jim

EDIT

Agree with the above post about the Homebase Card. We have similar with an American Express card with a balance of £260. We've told our creditors that we're paying a pro-rata payment but are actually paying the minimum payment. Once we get a bit spare, we'll pay it off (should be this month - bonus time). When I contacted them they were going to whack charges on if I didn't pay the minimum - seems daft to get £12 charges for a £6 minimum payment.