Looking for DMP advice

talisker78

Hello,

Its been a while since I've been on here. I have always received excellent advice from you all so I am hoping you can all help me again. Circumstances have changed in my life, I now have two young children (under two) and a lot of debt. I was making good headway on the debt. I recently managed to pay off a £1000 loan with car boot sales, ebay etc. I've still got approx. £32,000 of unsecured debt across various loans, cards etc. I've squeezed my budget as tight as I can get (having already done an SOA on this site several times) and I still have nothing to show for my income every month. This has been going on since 2007. I am paying off my debts at the minimum, which is all I'm capable of, and it will take the majority of my life to repay at that rate and it is not fair on my children.

I'm now seriously looking at a DMP with CCCS or payplan. I should have enough money every month to offer a decent amount to creditors but I was wondering - those of you who have/have had DMPs - about several things:

1. I understand that there is a good chance that if I go on a DMP, I will be marked as default on my credit report. I currently have no defaults. I also understand that a default will show for six years on my credit report. Is that from the date I first defaulted, or from the point I finally pay off the loan/credit card?

2. I have a mortgage with HSBC. I know the DMP won't affect that directly, but what are my chances, if any, of getting another mortgage? (difficult one, I know)

3. I have a car that has a loan secured on it. I am 18 months into the loan with 18 months to go (£1,500 balance remaining). Is it more likely that the company will simply repossess the car than agree to reduce payments? (this is my biggest worry)

4. I have a £400 overdraft with HSBC, which is my main bank. If I go DMP, will I have to switch to a basic bank account with another bank? Can i stay with HSBC (not that I am loyal to them at all!) ?

Basically, i owe it to my children not to be saddled with debt for most of their childhood. I need to do something and new credit cards and loans (secured or unsecured) are out. Basically, i am at the end of the line.....:(

Any advice people have would be gratefully received. Thank you in advance.

yorkshire-lad

Hiya,
The only two I feel as though I can answer is 2 and 4.

2. As far am I'm aware your mortgage will not go on the DMP, you will continue to pay that as normal, however if you go on DMP. You will probably more than likely default, which will go against you applying for another mortgage deal. So you would be stuck on your current one for 6 years.

4. You would be advised to change to a basic bank account, as a company may offset the money in your account to service the OD.

I'm sure someone will clarify what I said and hopefully answer 1 and 3 for you:).

Good luck
YL

Whataflippinmess

I'm in a similar situation to you at the mo, so not an expect, but I do believe:

Your credit rating will be affected for 6 six years after you may your final payment.

Not sure on the mortgage question, sorry (but somebody else will be able to)

Your car should be safe if it is on HP

I would switch bank accounts before you enter a DMP (I did mine yesterday) to one which you have no debts with. That way you will still have a debit card and cheque book. I have also applied for a prepay credit card, as I don't want to miss out on any on-line bargins.

Hope this helps, but I'm sure somebody with more expert advice will be along to advise both me and you shortly.

NorthernLas

I am speaker is a reader/lurker rather than a person on a DMP.
1. If you cannot meet minimum payments on your debts companies may issue defaults (they will certainly send you letters saying this since legally they have to explain this to you)
2. If you have defaults, they will affect your credit rating, so this will make a mortgage more difficult
3. No advice to give on a secured loan, not even sure that you can put secured debt into a DMP - you need proper advice from CCCS or National Debtline
4. If your pay goes into the account with the overdraft, the bank can recall the overdraft at any time (and leave you high and dry). It makes sense to reduce your risk and get a couple of basic accounts. One that you pay all bills from (mortgage, gas, elec, council tax etc) and the other that you keep 'spare' money in. Whether you choose to stick with HSBC is up to you, but you know the risk.

The obvious questions are
1. Are you maximising input and minimising output?
2. Are you sticking to your budget
3. Can you get additional work (well done on ebay/car boot)
4. Can you reduce costs (OS board for cooking etc)

Good luck!

DizzyDizzy

talisker78 wrote: »

Hello,


1. I understand that there is a good chance that if I go on a DMP, I will be marked as default on my credit report. I currently have no defaults. I also understand that a default will show for six years on my credit report. Is that from the date I first defaulted, or from the point I finally pay off the loan/credit card? Going onto a DMP won't automatically give you a default, but your creditors are likely you to issue a default sooner or later. It is entirely up to them when they are issued, it will depends on their own policy regarding these things. The defaults will stay on credit file for 6 years from the date they are issued. TBH, it is better if it is sooner, as they will fall off again sooner

2. I have a mortgage with HSBC. I know the DMP won't affect that directly, but what are my chances, if any, of getting another mortgage? (difficult one, I know) Anyones guess these days I'm afraid, each bank has their own lending policy, sorry

3. I have a car that has a loan secured on it. I am 18 months into the loan with 18 months to go (£1,500 balance remaining). Is it more likely that the company will simply repossess the car than agree to reduce payments? (this is my biggest worry) I think that if you go on a DMP you have to put all your debts on it, you can't hold any back as that would be seen to favour some creditors over others, and if other creditors find out they may refuse to go along with the DMP. My own opinion would be to sell the car privately, use the money to pay off soe debt, and then add the car loan in to the DMP. We are running around in a £450 estate, it's perfectly fine for our needs.

4. I have a £400 overdraft with HSBC, which is my main bank. If I go DMP, will I have to switch to a basic bank account with another bank? Can i stay with HSBC (not that I am loyal to them at all!) ? You really don't want to stay with any bank that it on your DMP. Your best best is to find a basic bank account to run with in the future and switch everything over before you notify everyone of the DMP. Add the overdraft into the DMP - I did

Basically, i owe it to my children not to be saddled with debt for most of their childhood. I need to do something and new credit cards and loans (secured or unsecured) are out. Basically, i am at the end of the line.....:(


Any advice people have would be gratefully received. Thank you in advance.

I've added a few thoughts above in red

Don't despire yet, you haven't actually fallen behind yet which means you have options. Talk to one of the debt charities, from personal experience I can recommend the CCCS but there are also the national debt helpline, and the CAB too.

Hope this helps a bit x

talisker78

Thank you everyone for your replies so far.

I do need some professional advise and I will speak to CCCS on Monday. I haven't got creditors banging on my door yet so I know I'm hanging in there, but it really is by the skin of my teeth and I do not wish to be here in ten years time still saddled with unbeleivable debt.

I will consider my options. Thanks again.