Debt Management Programme - Should I... Advice

dancingfairy

Hi - a couple of thoughts from me:
1) have you cut down everything possible - ie checked you are on a good deal for gas/electric, not gone shopping at the most expensive supermarket buying their most expensive luxury ranges but sticking to good old basics, shopped around for phone bills etc, dropped sky and don't have a 60 a month package, magazine subscriptions that you don't read etc etc - this might free up enough to avoid a dmp.
2) the other thing is that if you have debts with the bank you have a current account with - ie loans etc they can take payments for the loans or credit cards etc and leave you stuffed with not enough money to pay your morgtage, gas bill and buy food etc - as soon as they get a whiff of trouble they could potentially take their money so you need to get a new bank account set up and set up payments for just your essential bills - ie rent/mortgage, council tax etc.
Good Luck
df

churchrat

Hi
just wanted to pop in and say hello. Believe me, the begining of this dmp journey is the worst part, once you have started it will all get easier. I understand your worries about ccjs etc, but, for us, once we started we did not recieve any "real" threats at all. Lots of the companies will huff and puff, but if you are honest and just pay what you can afford, then most of them will shut up eventually.

We found the debt collection agencies much easier to deal with than the original creditors, and we ran our own dmp. All stopped interest eventually, but some took much longer than others.

Good luck with it all, dont forget that you still have to live when this all starts, so dont say that you can pay 90% of all your available "spare" cash and leave yourself without wriggle room. I think that was probably our biggest mistake.

keep in touch
churchrat

stuartbrookes

For those interested, and the one who asked, I've put my incomings/outgoings on...

---

INCOME

My Salary £3,120.00
Partner Salary £1,782.00
Child Benefit £80.00 (This will be axed shortly with govt changes)
Total £4,982

---

OUTGOINGS (This list is hugeeeeeeeeeeeee)

Orange - Me £50.00 - Mobile phone bill, contract, also used for work.
Account Fee £17.50 - Will be removed as part of DMP
Barclays Interest £45.00 - Part of DMP
HSBC £23.00 - Part of DMP
Egg Loan £196.00 - Part of DMP
Car Loan £190.00 - This is an interest free loan from my partners employer for her vehicle which is needed for work
Tesco £480.00 - Part of DMP
MBNA £100.00 - Part of DMP
Family Debt Repayments - £259 - money borrowed from family due to a divorce, I've tried to work on this but part is my ex-mother in law who refuses to budge.
Mortgage £1,350.00
Council Tax £187.00
First Utility £103.00 - Gas & Leccy, recently switched so this is the most competitive we can get
Orange £67.00 - Partners mobile contract, again used for work
HomeCover £62.71 - Appliance, Drain, Flood Insurance (I would get rid of it, but we've had a shower flood our upstairs room and a water leak in the house in the last 3 months, so I'm wary of getting rid of it)
Sky £61.00 - The only thing I would class as a 'luxury'
Water £78.00
Contents & Bldg £32.00
Car Insurance £29.00
Virgin Internet £45.00 - Just about to change this for a cheaper one at £25 that does broadband & phone, needed for work.
Medicash £21.00 - medical insurance
Additions + £17.50 - partners account fee, will go as part of dmp
Cat Insurance £25.00
O/Draft Interest £8.00 - part of dmp
Cancer Research £5.00 - charity
Drain Cover £2.19 - drain cover insurance
Gt Ormond £5.00 - charity
TV License £13.00
Interest £2.00 - part of dmp
WeightWatchers £20.00 - partners, could get rid of I guess
Sofa £44.00 - part of dmp
LoveFilm £13.00 - luxury, could also get rid of
Next £150.00 - part of dmp
Daughters Dinner Money £50.00 - packed lunch wouldn't be much cheaper
Shopping & Clothes £500.00 - Groceries for the house (2 adults, 1 child plus clothes as the 6 year old grows annoyingly quick)
my Petrol £250.00 - I travel circa 650 miles/week for work from home, not place of work, so needed.
partner Petrol £100.00 -
TOTAL £4600

---

Disposable Income - £380 for 2 adults and 1 child to cover anything not above...

We could potentially remove Sky, Weightwatchers & Lovefilm, saving about £90/month, but thats hardly going to make a huge difference and in all fairness, we don't want to 'not live' at the same time.

The proposal is to drop the debt, currently totalling £1,046/month. Pay back £750, giving us some 'breathing space' through an extra £290/month disposable income.

I don't think that is unreasonable, and living on £380 for 2 adults & 1 child, that has to clothe us as parents, entertainment, birthday/xmas, living money (partner smokes), if we do anything as a 'family' and any unforseen costs, of which we've had a lot lately with structural issues in the house.

Ifyoucantbeatem

Stuart,

From what I can gather in your posts so far we're in pretty much the same situation - roughly the same age, same amount of income and debt and also at the same stage in considering, but not quite yet committing to a DMP.

I've done my Statement of Affairs - Realistically, it says I have £461 a month I can spare, which will only get better in time, so the 9 years 7 months it will initially look like my DMP will last for will, I hope, not be anywhere near that. if it is, so be it... Some things in life are more important, and while I openly admit I got myself in this mess, I refuse to let it take over my life any longer. Not fair on my kids or my wife, and while I blame myself, I'm not a bad bloke and I'm not going to punish myself or take out my bad moods on my family, who don;t deserve it. I can relate to everything you've said, about silly stuff like breaking light fittings and wondering where the money will come from to replace them - I remember being irrationally furious when another driver took off my wife's door mirror a couple of months back, because the £30 I needed to get a used one out of the breaker's yard was what we'd put aside for a rare evening out...

Once we've stopped paying out as much in childcare, my salary goes up (which will hopefully happen with either a promotion, or change of job), the housing market perhaps picks up and rewards us with equity and I get used to living every month with a few pounds left in my pocket, rather than added to the credit card (for therein lies the trap, it's the little bits here and there that get you!) I'll hopefully reduce it more quickly.

I'm an intelligent bloke, with a well-paid job and lots of potential. Still can't believe how stupid I've been, but I'm proud to be taking responsibility for it at last, and so, so relieved that my wife knows everything and is supporting me. I now know I (and we) can get through it, and soon enough for me to be comfortable and solvent by the time my kids reach the age where they'll be wanting to go on expensive school trips, or off to university (at present, they're 3 and six months).

I've been living on the breadline, watching my debt increase monthly for the past three years just by servicing other debts, and it's now time to screw 'em all and draw a line under it. The amount I'll have left every month after my DMP might not sound much, but it's a darned sight better than the big fat nothing I've had for the past however long, and it'll be great just to have the odd couple of quid here and there to treat my boys, or have a day out etc...

I've looked at CCCS and Payplan. Will probably go with CCCS, and will probably do so in December, as I want all my November statements to come in first so I know the exact and final amounts I'm dealing with, before I fire off the token payments. But my mind's made up.

Nervous? As hell. Confident? Not really. Comfortable? oh no. Stressed? Yes. But certain I'm doing the right thing? Absolutely, and after a good few weeks dwelling on it, brooding, fearing the worst but knowing the time had come to finally bl**dy well sort it out once and for all, I'm finally feeling positive and optimistic. Cacking myself, too.

If I can do it, you can. So let's keep each other posted. Best of luck fella.

Craig

PS - to eveyone on this forum, long haulers, DMP supporters et al, I've been lurking and learning for quite a while. It's good to know you're not alone...Thanks for helping me arrive at this turning point. :-)

katu

Hi Stuart,


I was embarrassed about the whole DMP thing and my pride for ages said that I could manage. Then I realised that I couldn't manage and the refief when I pressed the proceed button was amazing. I still need to get a few things in order first - namely salary paid into the correct account but you get to a stage which it seems that you have reached when you just cannot manage anymore and need money to live on.


The beauty with a DMP is that you can pay a bit extra if you come into some money (we can all dream of 4 numbers on the lotto!) to pay it off a little quicker Plus when you think of what you have paid in interest, probably paid off the balance borrowed ten times over!


You have to cut your outgoings and as you say need to have some family fun too. With Christmas coming children want all the latest mod cons, they may find it boring but perhaps people can get them some clothes this year to ease your budget a bit?


Good luck with it all, I am just beginning the DMP journey too.

Craig you are also doing the right thing, I wouldn't worry about waiting for the next statements, I just sent the most recent ones I had - can you print them from online?

stuartbrookes

I've just got off the phone with CCCS, basically, they said forget it.

He said my creditors will dispute a lot of the figures and they'll use British Banking Association Guidelines. Like £77/month for all phone costs, ours are £150... £23/month for cable as opposed to £60 (which I'd have done), but then other ones. My g/f spends about £60/month on hair, they said guidelines are £26 for the entire household every month. He said guidelines would say only £34 for sports, hobby & leisure, we're close to 8x that if I include my season ticket (which I can't go back on), girlfriends nails, days out for the little one etc.

We went through it and he said there really would be very little point for us. He said as we're well paid, creditors would allow accept our SOA if its in line with the British Banking Association guidelines, and if we reduced our lifestyle to that, they'd point out we could pay £1800/month, where as now we're only paying £1k.

They basically told me not to bother unless something drastic happens to my financial situation. Guess thats the end of my road.

rugbymum

Hi Suart
I'm really sorry to come across as harsh in my comments, but trust me, you need to trim a lot more than you have so far!
By getting rid of the bits I've highlighted, i've found £164.19 a month.
By reducing your shopping bill you will also save. I know it's a pest but try charity shops & ebay for clothes, rather than shop for new. I have three rapidly growing offspring & that's what I HAVE to do to keep up. I only buy new shoes.
I have a sneaking suspicion that you haven't quite got your head around the changes in lifestyle you and your family need to make. The fact that you have left Sky & charity donations on your list show this. Unfortunately your Creditors will see these as unecessary luxuries.
You are considering a DMP and your partner still wants to spend £60 on hair and extra for nails?????? Is your season ticket paid for? If not cancel it!
Unfortunately you sound as though you want to have your cake and eat it too. It ain't gonna work. Serious lifestyle choices need to be made and if you want to clear your debts then you need to be realistic about what you are currently spending.
Sorry again to sound mean, I sincerely hope you stick around and we can all help with practical advice, trust me most peeps are not meanies like me !:D
RM

stuartbrookes wrote: »

For those interested, and the one who asked, I've put my incomings/outgoings on...

---

INCOME

My Salary £3,120.00
Partner Salary £1,782.00
Child Benefit £80.00 (This will be axed shortly with govt changes)
Total £4,982

---

OUTGOINGS (This list is hugeeeeeeeeeeeee)

Orange - Me £50.00 - Mobile phone bill, contract, also used for work. try and get a cheaper on, are claiming on expenses?
Account Fee £17.50 - Will be removed as part of DMP
Barclays Interest £45.00 - Part of DMP
HSBC £23.00 - Part of DMP
Egg Loan £196.00 - Part of DMP
Car Loan £190.00 - This is an interest free loan from my partners employer for her vehicle which is needed for work
Tesco £480.00 - Part of DMP
MBNA £100.00 - Part of DMP
Family Debt Repayments - £259 - money borrowed from family due to a divorce, I've tried to work on this but part is my ex-mother in law who refuses to budge.
Mortgage £1,350.00
Council Tax £187.00 have you checked you're in right band + are you paying over 10 or 12 months?
First Utility £103.00 - Gas & Leccy, recently switched so this is the most competitive we can get
Orange £67.00 - Partners mobile contract, again used for work GOT to get cheaper contract
HomeCover £62.71 - Appliance, Drain, Flood Insurance (I would get rid of it, but we've had a shower flood our upstairs room and a water leak in the house in the last 3 months, so I'm wary of getting rid of it) get rid CCCS allow for emergencies
Sky £61.00 - The only thing I would class as a 'luxury' Gotta go, get Freeveiw
Water £78.00 HOW MUCH? are you on a meter?
Contents & Bldg £32.00
Car Insurance £29.00
Virgin Internet £45.00 - Just about to change this for a cheaper one at £25 that does broadband & phone, needed for work.
Medicash £21.00 - medical insurance gota go
Additions + £17.50 - partners account fee, will go as part of dmp
Cat Insurance £25.00 try for cheaper
O/Draft Interest £8.00 - part of dmp
Cancer Research £5.00 - charity sorry gotta go
Drain Cover £2.19 - drain cover insurance gotta go
Gt Ormond £5.00 - charity gotta go
TV License £13.00
Interest £2.00 - part of dmp
WeightWatchers £20.00 - partners, could get rid of I guess WW here on forums for free
Sofa £44.00 - part of dmp
LoveFilm £13.00 - luxury, could also get rid of gotta go
Next £150.00 - part of dmp
Daughters Dinner Money £50.00 - packed lunch wouldn't be much cheaper try Old style Thrift board for ideas
Shopping & Clothes £500.00 - Groceries for the house (2 adults, 1 child plus clothes as the 6 year old grows annoyingly quickly) you seriously need to reduce this - see above
my Petrol £250.00 - I travel circa 650 miles/week for work from home, not place of work, so needed.
partner Petrol £100.00 - can she take public transport for a while?
TOTAL £4600

---

Disposable Income - £380 for 2 adults and 1 child to cover anything not above...

We could potentially remove Sky, Weightwatchers & Lovefilm, saving about £90/month, but thats hardly going to make a huge difference and in all fairness, we don't want to 'not live' at the same time.

The proposal is to drop the debt, currently totalling £1,046/month. Pay back £750, giving us some 'breathing space' through an extra £290/month disposable income.

I don't think that is unreasonable, and living on £380 for 2 adults & 1 child, that has to clothe us as parents, entertainment, birthday/xmas, living money (partner smokes), if we do anything as a 'family' and any unforseen costs, of which we've had a lot lately with structural issues in the house.

Tixy

Hi Stuart

I can see that no reputable organisation would suggest a DMP to you (I'm not counting GP as reputable). CCCS are right in that creditors won't freeze interest if you are spending in some of those areas. You would also have an issue with the family loans which are not generally accepted as part of a DMP, and things like the sofa are probably secured so also could not be included.

But you still need a solution and I think by cutting back a bit you should be able to manage your debts much better and pay them off sooner. I would redo you incomings & outgoings using this calculator http://www.makesenseofcards.com/soacalc.html as it shows your outgoings before debt repayments, your debt repayments and you shortfall/surplus. It also reminds you to include costs you have forgotten such as car tax, car maintenance & servicing, presents, haircuts etc.
This also links to another calculator 'the snowball' which allows you to calculate how long it will take to pay your debts off and how much quicker it would be and less interest you would pay if you free up an extra £100 or whatever each month.

Just picking up on a few costs
Account Fee £17.50 - What benefits does this give you and do you use them? switch to a regular account
Water £78.00 This is high for 3 people - are you on a meter? if not investigate if one would be cheaper
Shopping & Clothes £500.00 - Groceries for the house (2 adults, 1 child plus clothes as the 6 year old grows annoyingly quickly) Groceries including cleaning & toiletries & pet food & packed lunches should be easily doable for £250 (some manage on £200 for a family of 5) Clothes keep to a minimum for adults and buy cheaper clothes for a child who is growing - should easily be able to manage on say £50, which alone could save you £200 per month.
Orange - Me £50.00 - Mobile phone bill, contract, also used for work.
Orange £67.00 - Partners mobile contract, again used for work Look for better deals for you both, or even a combined tariff for 2handsets. Tariffs are coming down all the time, I know pay £36 for almost unlimited everything and I used to pay £100 per month and certainly don't use the phone any less.

Please don't give up trying to change things you just need a different solution so you don't end up in the drastic financial situation CCCS mentioned.

saltnvinegar

stuartbrookes wrote: »

I've just got off the phone with CCCS, basically, they said forget it.

He said my creditors will dispute a lot of the figures and they'll use British Banking Association Guidelines. Like £77/month for all phone costs, ours are £150... £23/month for cable as opposed to £60 (which I'd have done), but then other ones. My g/f spends about £60/month on hair, they said guidelines are £26 for the entire household every month. He said guidelines would say only £34 for sports, hobby & leisure, we're close to 8x that if I include my season ticket (which I can't go back on), girlfriends nails, days out for the little one etc.

We went through it and he said there really would be very little point for us. He said as we're well paid, creditors would allow accept our SOA if its in line with the British Banking Association guidelines, and if we reduced our lifestyle to that, they'd point out we could pay £1800/month, where as now we're only paying £1k.

They basically told me not to bother unless something drastic happens to my financial situation. Guess thats the end of my road.

Hi Stuart

This is actually good news and the reason for suggesting CCCS in the first place as they are impartial advisors and will tell you what the best route is for you, not what earns them a commission.

If you decide to go with GP then you will pay them a massive chunk of money only to discover your creditors questioning what the CCCS have pointed out, refusing your DMP, and consequently completely trash your credit file.

Ultimately it is of course your choice but as far as I can see its not the end of the road, it looks like you just need to look at your income/expenditure and change your lifestyle.

Rugbymums comments are completely on the ball (excuse the pun!).

£500 for groceries is OTT for 2 adults on a 6 year old child. To help you put this into context our budget for 2 adults and 4 children is £320! This includes toiletries and nappies too!

So with Rugbymums savings and getting your groceries down to a realistic figure you're already saving £340 a month.

I think in your journey to your Light Bulb Moment (referred to as LBM on the forum) you're in a position many of us have faced. Its perfectly normal. You know you need to tackle your debt, but you're not quite ready to face the lifestyle changes you need to make.

But if you are serious about paying your debts, sooner or later you will have to make this lifestyle change. Its better to do it now, on your own terms, while you are not in arrears etc then have have it forced on you in 18 months time when you are so overextended that you are unable to pay the mortgage........

From the figures you've provided it does look like you could clear your debts in less time than the 7.5 years GP have told you and without the risks associated with a DMP.

Use the SOA calculator Tixy has posted, and you can then post this directly to the forum here. There are loads of great people on the forum who can then guide you and give you advice on where you can make savings and be debt free.

Best

SnV

katu

Hi Stuart,

Your girlfriend is going to have to find a cheaper hairdresser and stop getting her nails done!

As thoughtful as it is to give to charity, these will also have to be stopped for a while until you are in a position to donate - charity begins at home for now.