Advice on proposed DMP needed

JQK_Ace

My wife and I decided to actually face up to our debts nearing the end of last year. We had initially visited a debt management counsellor through a credit union who provided advice around the various scenarios to point us in the right direction.

Since then we have had 2 meetings since with CAB who had suggested a DMP (this was also the advice given by CCCS when I input my details online although i never went further with them)

My issue is that i need more advice on my mortgage, we are currently on a 90/10 split interest only/capital and interest, and i think the negative equity will be about £5-10k, should we keep this payment the same or try and change the spilt before entering the DMP??

I also have concerns as I know of further reductions to my take home pay from April due to a Tax bill from HMRC (approx £40 pm reduction). I will also need to start paying back a Student Loan as of September (currently paying £20 which will increase to £40).

I feel as though the CAB are not able to answer all my questions and this is making me hesitant about going through this with them.

Also CAB suggested using Payplan to manage the payments to save us from setting them up ourselves. This again make me unsure of going through the CAB as I’m not sure on how much day to day management they would take on?

I have an SOA available if this would help anyone with the above queries. We are not currently behind with payments, but are treading water and finding it very difficult to live each month
Total debt is £53K, looking to pay around £1k a month to the DMP

Tixy

Hi and welcome

I understand that at most CAB offices they can now only advise you on a DMP but either you have to actually make payments yourself, or they have an agreement with payplan where payplan will run the DMP.
CAB will advise you from the off but would not take on day to day management, though if you did go for the option of paying your creditors yourself would be available to help deal with queries you have / help with template letters etc if creditors won't accept payments / sell your debts on etc.

With regards to the mortgage - do you have any plans / expectation of moving in the next few years? Obviously keeping the majority on interest only should keep the cost down and help you clear your unsecured debts quicker. What are your long term plans for paying off the interest only portion of the mortgage?

When there are changes to your circumstances (such as reducing income due to your tax code changing) you inform your DMP provider and will have to change your budget and therefore your repayments. A review is done anyway every 6months or a year to redo your budget but can be done more frequently when required.

That said if you don't feel confident you could always exploer CCCS again?

ladysparklexx

Hi e are going through one with the CCCS and they are being great have a chat directly on the phone with them.

I do not know about your mortgage payment but someone else will.

With reguards to your tax, in april phone them up and they will change your budgets to allow for this. With your student loan they will do the same and put your income into your budget as a change. I have an 8k student debt due to start when i work enough and they have said that the student loan doesnt matter to them how much is owing or coming out of my wages, they are only concerned with what actually goes into my bank account as incoming.

JQK_Ace

There are no current plans to move and doubt we ever will, the interest only was while my wife was PT, but now the kids are at school, she's back FT but we can't change it due to the other debts. Might just need to deal with that when the DMP is over.

Thanks for the advice on CAB, might need to look towards Payplan or CCCS as I don't fancy dealing with the creditors all the time....

Still not fully convinced by the DMP as have concerns about them adding interest or not stopping it all, but i suppose it's a start

Standingtall

Hi JQA-Ace. My DMP is with Payplan. I started it around September 2011 and have had no real problems. They helped me with my SOA and tweaked it to make it acceptable to my creditors; skimmed a little off my grocery bill, added a little on my haircuts, etc. I pay the via standing order on a monthly basis and the pay my creditors. :T

I have a named caseworker, plus a back up one. Also they have Payplan Plus - an Internet portal through which I can download template letters, check my budget, etc.

If you do take on a DMP you should try and make just token payments for a couple of months, this will enable you to build up and emergency pot for the future. When your income falls in the future, you can ring them and they will readjust your SOA accordingly.

The only issue I have had is when Santander continued to charge on my overdraft. I downloaded template letter asking them to stop this and not only did they they do so but they also refunded two month of charges.

It's not ideal, being in a DMP, but compared to the alternative such as an ever increasing spiral of debt, or bankruptcy, it is eutopia:A

Standingtall

JQK_Ace wrote: »

There are no current plans to move and doubt we ever will, the interest only was while my wife was PT, but now the kids are at school, she's back FT but we can't change it due to the other debts. Might just need to deal with that when the DMP is over.

Thanks for the advice on CAB, might need to look towards Payplan or CCCS as I don't fancy dealing with the creditors all the time....

Still not fully convinced by the DMP as have concerns about them adding interest or not stopping it all, but i suppose it's a start

Our posts crossed! To add therefore, all my creditors have now stopped charges and interest; Egg CC (now Barclaycard), Egg loan (Moorcroft), santander loan and overdraft, Virgin CC, Kay's Catalogue, Littlewoods Catalogue.

This is never guaranteed and maybe I have just been lucky, but hey ho, I hope that this luck continues:j

JQK_Ace

Thanks for the advice so far.... I'm planning on setting up new bank accounts tomorrow , would i need to go for the likes of Cashminder from Co-OP?

Standingtall

As long as the bank you choose does not have links with any of your creditors and does not have an overdraft attached. I opened and account by ringing Natwest. It took around 20 minutes on the phone (whilst hiding in the loos at work:eek:). It is a ful current account but I clearly stipulated I did not want an overdraft, this meant they did not credit check me too! All Payplan asked was whether it was linked to a creditor and they also double checked this for me.