Dmp newbie with a question

meterman6065

Hi, I'm in the process of setting up a Dmp with CCCS. Debts in the order of £35000 of which 17000 loan & the rest on cards. I have agreed to pay £337 per month but don't yet know if creditors will accept this.

Debt was mainly because of a self-build that wen't a bit over budget & over time, probarbly not a good idea to try & build a 4 bed 4 bath house with £ 70k to start with, but that's hindsight for you, always there laughing at the mistakes you make! Talk about a steep learning curve, it was so B*%"*Y steep I kept falling off! House is finished now but the original idea was to have no mortgage ( I know you wan't to laugh) but we have come to this.

I have alot of equity in house, mortgage £121 K value around £350-400K. Don't want to sell house. Will this affect how the creditors will look at my Dmp. I have been heavily in debt for a number of years but have only late payment penalties applied until I have started dmp.

I also have a HP car £4000 for 48 months, 18 months in @ £106 per month. To settle now would cost around £2800 ish.

My Question is what to do with some investments I am going to cash in. 1st one is a small endowment with profits which matures Nov 2014, It has a cash in value now of £4517. I also have a share plan with the company I work for. I could sell shares to a value of £1300 but would have to pay tax (basic) & nat ins. Do you think its best to pay car off or get cccs to share the money between creditors.

Any advice would be greatly appreciated.

happycamel_2

Frankly I think your ego is writing cheques your bank balance can't cash. How do you plan to pay back £35000 at £300 a month? That would take 10 years without any interest at all.

You need to look at the APRs of the debts. If any of your debts have a higher interest than the investment (likely), then you would be better off paying off the debt.

meterman6065

Thanks for your comments. That is the figure that cccs came up with when I filled in all the forms. I did think it was a bit small & will up it when things are up & running.

I take it you have no experience with a dmp.

Cheers

HenryJ_2

If you can do it, I would have thought that by far your best value option would be to extract the £35k from the quity in your home. Longer term, yes but the lower interest would mean that the increase in repayment would be lower than the £337 pm you're offering and then you could overpay on your mortgage and reduce it quicker. Someone with more experience than me can probably say if that sounds like a good plan.

nottoolate

honestly i cant see creditors being happy with a dmp while you have a whopping amount of equity and assets

if you default the accounts via the dmp then they could well go to court looking to get a charge on the property

chanz4

I was thinking the same, why accept dmp when they can take you to court and get a charging order.

notgotenough£

We have a DMP and pay 450pm on a debt of about 26k through the CCCS. If I had over 200k equity in my house there would be no DMP. Without doubt I would pay off the debt be it selling the house or remortgaging. Unfortunately we only have about 14k equity in our house so are stuck being skint every month. Like others have said cant see how your creditors will be happy to agree to that, in fact I would have thought the CCCS wouldnt have accpeted you on to a DMP.

Limana68

I would try and remortgage and pay off your debts then start afresh

meterman6065

Thanks for all comments. I don't think that now is the time to sell. There are 3 houses for sale on my street & they havent moved even when prices have been cut by 10%. I would like to sell but honestly I dont think it wll happen any time soon. I have tried to remortgage but due to tighter lending, no joy.

I must admit the court charge thing is a bit worrying, I was planning to use all available assets to reduce debt. Wouldnt it be better to try & start paying back money now than wait till a possible house sale who knows when, I would have thought that the money men would be happier having some money now.

I dont know why a dmp was advised, I just filled in all the forms & that was what they suggested. A charge cannot be made on the property becuase it's jointly owned with my wife & all the un-secured debt is in my name.

Cheers.