Debt Management Plans - couple of questions

Kmr5025_2

Hi there, have found this forum and been glued to it for the last couple of days as its so reassuring to know that I'm not alone with this.

I will post full details and SOA later but in a nutshell I owe a total of £24237 to 3 creditors (2 credit cards, 1 loan and an overdraft). I was made redundant from my job in Dec 2005 and didn't find my new job until June this year and new job pays £6000 a year less than my old one so what I could afford this time last year, I can't afford now. I haven't defaulted on my payments to my creditors yet but it's only a matter of time! I've been in touch with CCCS and they're recommending a debt management plan however I currently only have £107 left over to put into it. My questions about this are:

1) I'm due a payrise in January - should I wait until after this to start the plan, although if I did this I'm not sure how I'd make the payments in the meantime. This payrise would increase the money available for the DMP.

2) I've got a second job now (starting in a month or so) but this is on a casual basis so hours aren't guaranteed. There will be some months where there is no work and others where I could work an additional 80 hours. How will this affect the DMP - can I alter what I put in the 'pot' on a month to month basis or do I have to have a set amount every month and plan ahead to cover the months when I haven't got any work? Should I wait until I'm established in this role before I take out the plan.

3) If I went down the DMP route would my employers be informed by either CCCS or my creditors (as they may start court proceedings against me). My main job involves dealing with the public and selling goods although it is not a retail job. My casual job is working as a steward at an entertainment venue so is registered and licensed. I'm not sure whether I would be obliged to disclose all of this to both of my employers because of the nature of my jobs or whether it isn't necessary and they won't be contacted by anyone else about it.

I did have another idea about converting my mortgage to and Interest only option for a few years if possible and using the money saved here to pay off my debts. Has anybody else used this option or could tell me what the potential pitfalls would be (apart from not having paid anything off my mortgage debt for those few years!). My other option is a secured loan on the property but I think I might find that difficult as I have quite a large mortgage anyway and the cost of the debt would probably put it up to a 100% mortgage. I know all the horror stories about secured loans but has anyone used this option and its worked for them?

I apologise for waffling on so much but there's just so much to think of - all of the options have pros and cons and I'm just scared of making the wrong decision!

Any help you can give me would be very much appreciated!

Thanks

CLAPTON

welcome but post the SoA as its not possible to advise without seeing the full financial situation.

Kmr5025_2

Thanks for the reply - I will put SOA up asap but in the meantime would really appreciate it if anyone can answer the question about whether my employers will need to know I'm on a DMP (or have defaulted on my payments, being pursued by a debt collection agency or gone to court about it if it goes that far and creditors don't accept my offers.)

This is one of the things which concerns me most as I don't want work knowing my business if not strictly necessary. This is more a question about how DMPs and debt problems work in general rather than specifically about my situation so if anyone can answer that it would be great.

Thanks

CLAPTON

in general your employer will not know about your being on a DMP or whether you have defaulted on your debts or gone to court or got a CCJ.

however, if you gave your creditors (CC etc ) your work phone number when you signed up with them, they may well phone you at work.
they are not of course allowed to discuss your affairs with anyone other than you (data protection act). Of course if (and its not common) the court makes an attachment of earnings order, your payroll would be informed.

Kmr5025_2

Thanks - that's put my mind at ease a bit that my employers won't be involved in any of it. I haven't given my new work number out to my creditors either so fortunately they can't contact me that way!

Thanks for getting back to me so quickly - will put together my SOA now!

madduck

On the question of when to start the DMP - there is no reason why you can't start it now - thereby avoiding any problems in how you make payments over the next few months. To be honest it can take a month anyway to sort everything out (not too sure how far along the process with CCCS you are just now).

You can start the DMP with your current level of earnings and there are regular reviews anyway, so any salary increase will be factored in later on.

I've read other posts re people who have variable levels of income - just like you with your second job. I'm sure that the advice that was given was to budget for the 'guaranteed' income that you have. Any excess should be saved up and when you have enough to pay off one of your debts in total, use it then. CCCS will advise though - are they aware of your second job?