DMP Mutual Support Thread - Part 7

CommitedToChange

Hi to all the newbies - hang in there it does get easier. I made one months token payments to my creditors before starting my DMP - but now wish I'd done a few months token payments and cleared a smaller payday loan first. Oh well, live and learn. I'm sending out F&F to two creditors tomorrow so that should be interesting.

I was wondering what people did about pensions when on a DMP. I've just started a new job after 4 years freelancing and have been invited to join the pension scheme (they match my contributions etc). Should I join as I'm 32 and I have no pension plan and no savings (apart from emergency) or is it better to clear the debt faster and then save for a pension later on. The new job means I can pay more off my debt each month which is nice but I'm stuck as to pension or debt and could use some advice please.

Standingtall

CommitedToChange wrote: »

Hi to all the newbies - hang in there it does get easier. I made one months token payments to my creditors before starting my DMP - but now wish I'd done a few months token payments and cleared a smaller payday loan first. Oh well, live and learn. I'm sending out F&F to two creditors tomorrow so that should be interesting.

I was wondering what people did about pensions when on a DMP. I've just started a new job after 4 years freelancing and have been invited to join the pension scheme (they match my contributions etc). Should I join as I'm 32 and I have no pension plan and no savings (apart from emergency) or is it better to clear the debt faster and then save for a pension later on. The new job means I can pay more off my debt each month which is nice but I'm stuck as to pension or debt and could use some advice please.

Hi:). I think it depends on how long it is going to take you to clear your DMP. If it's 15 years plus like mine then I would start paying something into a pensions as it is the early years that will build the biggest returns. If concentrating on your debts means you are clear in 2 years instead of 5 then it's probably worth simply ploughing everything in them. I hope this makes some sense?

CommitedToChange

Thanks ST that does make sense - I'm gonna be here for a while I think - even with the increased payments I can make with my new job - so pension seems sensible. When I call CCCS to increase my DMP I'll get their advice as well.

Hmm having done some sums and guessing the pension amount. If I took the pension it would add one year onto my DMP taking it from 4 1/2 to 5 1/2 years. This assumes I don't have to pay my old style student loans - if I do all bets are off as I'm going to be on a much lower wage

Edit: Amazed my DMP time will drop from 30 odd years to 6!!!!! SO glad I took the job now

ianmak

BlushingRose wrote: »

See, now I'm all stressed that we're doing the wrong thing. Mr BR has said, when I mentioned it in the past, that he'd feel really uncomfortable doing just tokens and he wants to DMP to start properly asap.

The main reason to pay tokens is to show that you're struggling and can't afford the minimum payments, but still acknowledging your debts. If you were to go from minimums straight onto a DMP, they're wonder why you can't afford the payments now, when you could before, if that makes sense.

Building up a slushfund is a positive side effect of paying tokens!

ianmak

Hi all, please could anyone requiring a DMP Support number please PM me. There's a few I need to add, but can't look all the way back to find them!

Cheers,

Ian

BlushingRose

sickasachip13 wrote: »

We definitely made one token payment to most, but because of where the different payments fell, to a small number of creditors we made two token payments. I know we were given the option of having another month before the first DMP payment but we opted to get it moving quicker.

We started making enquiries in the middle of December, and made token payments to everyone then with a DMP letter, but the CCCS suggested we started in Jan, and cos we wanted to start asap, the thought of making token payments for long made Mr BR uncomfortable, and didn't really occur to me properly until now, when it's too late really.

BlushingRose

ianmak wrote: »

Hi all, please could anyone requiring a DMP Support number please PM me. There's a few I need to add, but can't look all the way back to find them!

Cheers,

Ian

Already have done chuck x

BlushingRose

ianmak wrote: »

The main reason to pay tokens is to show that you're struggling and can't afford the minimum payments, but still acknowledging your debts. If you were to go from minimums straight onto a DMP, they're wonder why you can't afford the payments now, when you could before, if that makes sense.

Building up a slushfund is a positive side effect of paying tokens!

I see...
Well, we were making the minimum payments, but only managing to eat cos we had a credit card, so, really, we couldn't afford them.

Standingtall

Hi Ianmark and Blushing Rose. I was meeting minimum payments when I entered my DMP but then my reason was that my ex husband lost his job so I consequently lost maintenance. The creditors were clearly happy with this explanation. Having said that, as I have stated many times, I very much wish I had made token payments and built up an emergency fund.

CommitedToChange

Sigh, I think I'm going to have to start paying my student loans back in May, I'm above the deferment threshold by a stupid £300 meaning I'll be £2500 worse off a year - that's a huge chunk of my new wages so the decision is now pension and DMP for 9 odd years (assuming after loans are paid the extra money goes DMP) or no pension and pay off the debts in 6 years.

Sorry just needed to get this down so hopefully I can stop thinking about it and get some sleep.