New here and advice please

Wannabefree1

First I apologise if I should have tagged on another thread rather than starting a new post. Am new here and not sure of all the ground rules so to speak.

Second I apologise if any funny words appear - my laptop blew up months ago so I now rely on my mobile.

Finally bit the bullet (and hit DH around the head a few time) and contacted Payplan to help with a DMP. Childcare following 2nd child screwed us (the child we were told we'd never conceive.) We struggled borrowing more to make minimum payments and eventually when DH's usual overtime got stopped two months ago it all fell apart.

We have £45k of debt between us split mainly between barclays and lloyds. (have read lloyds can be a pain in the but which worries me a bit).

After our budget we'll have around £800 to pay to these guys. And if his overtime reappears even more. I've given Payplan the go ahead to act for us and just await their pack to sign authority letters.

They suggested I clear my overdraft and the money owed to family this month which totals around £600 this month and make a token payment to the others. But not to tell Lloyds until after I've got my new bank details through for the co-op bank account I opened on Friday. This to stop them clearing my account.

I currently have payments that are either up to date or 1 month late. No ccj's or defaults.

I've read difference of opinions on what the token payment should be. Do I split my spare £180 between them pro-rata. Start paying into the DMP from 1st January. Or - make £1 payments and squirrel the £180 and £800 away in case of an emergency like car blowing up (husband also needs a new front tyre for his bike) and start paying the DMP from 1st Feb????

Also do I issue a holding letter now (in a few days to lloyds) telling them Payplan are dealing with this and give them the reference number? If so has anyone got a template they could share with me.

I'm scared by the thought of defaults, ccj's , bailiffs!!!!! But am hoping facing up to stuff today will see a way out of the debt nightmare for us.

Thank you.

BEAT_THE_DEBT

Hi if you stick to payplan there will be no fear of baliffs. I made £10 token payments at the start to allow me to get my head above water.x

Wannabefree1

Did you make a token payment for just the first month whilst it was being set up or for the first couple?

Thank you for replying

Bettingmad

Make as many token payments as you feel you need to make to get you on an even keel. Three mopnths would be no problem if thats what it takes.
I wouldn't make any more than £5 and it makes little difference if you even only make £1 token payments.
Good luck on your debt free journey.
To me there are benefits for being on the front foot with your creditors if you feel you are able to and ring them up to tell them you are entering a dmp quoting the Payplan reference number. Are you able to update your contact numbers with them? might be worth buying a payg sim and giving them that number to contact you on and deleting the others especially if you have online accounts.

Heres a letter if it helps, there are more letters here

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6

[FONT=&quot]Dear Sir/Madam[/FONT]

[FONT=&quot]Re:- Account/Reference Number **************
[/FONT]

[FONT=&quot]We are writing to inform you that we are seeking advice and assistance from Payplan regarding our current financial difficulties where we are currently unable to make the minimum payment to our account. As per your advice on your monthly statement I have informed yourselves on the telephone and contacted Payplan. Payplan Ref. No. ************
[/FONT]

[FONT=&quot]To this end, we would appreciate if you could hold any action on the above account for a period of at least 30 days to allow for a solution to be sought from Payplan.[/FONT]

[FONT=&quot]Also, during this period, could you please freeze interest and/or any other charges accruing on the above account?[/FONT]

[FONT=&quot]In view of our circumstances, would you please accept a token offer of £5 towards this month’s payment.[/FONT]

[FONT=&quot]The above request is asked as per guidance issued by the Lending Code 2011, the relevant extracts are listed below.[/FONT]

Breathing space for personal customers
201. a customer can demonstrate to a subscriber that they are making a genuine effort to develop a repayment plan, using either a debt advice agency or a self-help tool the subscriber should suspend collections activity related to the customer’s current account, credit card and/or unsecured personal loan while discussions continue, for a period of 30 days.
202.The subscriber should confirm with the customer and/or their adviser that collections calls and letters will be suspended during the ‘breathing space’ period (except where required under Consumer Credit legislation) and should discuss with the customer and/or their adviser how the account will continue to operate during the 30 day period.

203.Where the customer and/or their adviser provides clear evidence of demonstrable progress being made in developing a genuine repayment plan, but work has not yet concluded, subscribers should extend the breathing space for up to an additional 30 days.

Interest and charges concessions

224.Subscribers should consider reducing or stopping interest and charges when a customer evidences that they are in financial difficulties. Such reduction/suspension decision should be based upon an income and expenditure statement indicating that they are unable to make repayments sufficient to meet contractual terms. Where a customer is able to make only token payments, their debt should not increase as a result of interest and charges levied. The assessment should reflect the customer’s lack of ability to pay rather than the stage an account has reached in the arrears cycle or whether they are using free sources of debt advice. Where a firm declines to allow concessions, they should be prepared to explain why to the customer or their adviser if requested to do so.


[FONT=&quot]We hope you will act in a sympathetic way due to our financial difficulties and again ask that you will consider taking no further action on the account for 30 days and suspend interest and charges in line with the lending code.[/FONT]

[FONT=&quot]We further ask that the enclosed postal order is only cashed by yourselves if you are in agreement with our current proposals[/FONT]

[FONT=&quot]We look forward to hearing from you as soon as possible.[/FONT]


[FONT=&quot]Yours faithfully

Send letters recorded delivery and keep a copy of everthing.
[/FONT]

Wannabefree1

Thank you so much for that .

A bit of breathing space is just what we need to set us up for the long haul. My biggest fear is if DH had to loose time from work for sickness etc. as he wouldn't get paid and then we'd be stuffed without a little to fall back on.

I'm scared but at the same time feel strangely liberated. Am hoping the pack from Payplan comes through quickly so we can get the show on the road so to speak.

Bettingmad

Wannabefree1 wrote: »

Thank you so much for that .

A bit of breathing space is just what we need to set us up for the long haul. My biggest fear is if DH had to loose time from work for sickness etc. as he wouldn't get paid and then we'd be stuffed without a little to fall back on.

I'm scared but at the same time feel strangely liberated. Am hoping the pack from Payplan comes through quickly so we can get the show on the road so to speak.

You have made the hardest step by contacting Payplan, don't feel pressurised into making full dmp payments until you are ready. Payplan will suggest a date however insist that you make a minimum of 2-3 token payments to catch up with your difficulties and allow you a small emergency fund.
There are guidance figures as to how much you can allow for expenditure. The advice I would give is be realistic with the figures to allow yourself some manouvering space. Put your figures too low and it can make things really difficult. I would prefer to allow greater expenditure and the plan taking slightly longer than to pare your figures to the bone. You still need to have a life whilst your on your long journey.

Bettingmad

When making token payments postal orders are the way to go.

Wannabefree1

Thans again.

Can I just ask why postal orders??? I was planning on automated bank transfers for the first token payment as it will still be my existing current account.

Also. Once the new bank account and sort code are through do I need to draw out the money from my current account rather than bank transfer it across to prevent Lloyds knowing where I've gone ??

I have a Mortgage payment on the 19th and need to make sure it's paid. Just hoping my new details come through today or tomorrow so I can get the dd switched over in time.