Didnt think I wanted a DMP, but think I might now

monday_blues

Hi there please help me. I have just come off the phone to the CCCS in tears....it is so embarrassing to have come to the point when I need to openly admit I've made a mess of finances and can't cope anymore. The lady was so nice, which in a way made it worse! She said I will go through an interview process on Monday next week which will take half an hour and they will make a recommendation based on that conversation.

We have struggled for the last few years, I've posted a few times in the past, but just muddled by trying to make ends meet and make minimum payments....which we have UP UNTIL NOW. Last month missed card payments, and Barclaycard are phoning thhe house every 2 minutes with a recorded message, when I hear its them I just hang up ( is that ok to do). Cards are pretty much at their limits now, and we have no cash savings left. Credit Card interest rates have all went up in the last year from around 19% to 25% making it harder and harder to make min payments. Coupled with cost of living, other bills, groceries etc, just not enough money to pay everyone. On a positive, there is a chance I may get some extra work and hubby might get a payrise in next month or two, but that's not helping right now, this month.

If we were to pay all our household bills, loans and credit cards this month, we would have money for petrol and groceries but nothing else...might even be a negative number.... CCCS say in meantime to send a quick letter or phone cards to say "having a bit of trouble, getting help, but here is a small payment in meantime - I will be back in touch soon". I am really stuck, dont know what to do for the best. I have a few questions, if you dont mind helping me out:

1. In Oct 11 I changed my current account to Santander to benefit from the £200 switcher payment which they paid me the other day. I cannot remember if i'm tied to keep my current account with them for a certain time???? If so, that might be a problem as they are one of my creditors - loan???? What would happen here?

2. My mortgage is with Santander also. I told the lady on the phone the repayment is £655 which it is, interest only, but we should really be on repayment as term of mortgage 31 years and I am 40 - therefore way past retirement. Would they take into consideration a repayment mortgage payment, even at 31 years, to get back to what we should be doing - repaying mortgage?

3. Also, our mortgage is broken up into 4 different parts, a couple of fixed rates ending at different times up to 2018, however, one or 2 parts is on variable rate. If I entered into a DMP, should I try to fix the variable parts onto a fix rate in case rates increase dramatically and we end up defaulting on mortgage - because presumably we wont have megabucks on a DMP and things will be tight???? Or, would we be able to fix at a later date with the same lender, should the rates increase, if we are still on the DMP, or would they refuse, therefore opening us up to defaulting on mortgage. This is the last thing I want as we love our house and dont want to do anything to jeopardise it.

4. What if we had a baby whilst on DMP, what would happen then?

So sorry for rambling, so many questions, so confused, but one way or another its crunch time and need to make a decision now, as its the end of the road.

Your expert advice I am hoping for. Cant believe it has come to this.
Thanks in advance,

dancingfairy

I can answer a couple of questions -1) with regard to the mortgage I don't think it's reasonable for creditors to dictate whether you are on interest only or not - presumably you just tell CCCS (who in turn tell the creditors) what the figure is. How long do you think a dmp will last? Will you be able to up the mortgage at a later point in time and still get the mortgage paid off? 2) in terms of things being tight I would slightly overestimsate everything - that's because 1) things are almost certainly going to go up over time -food, electric , council tax etc and if you can save a few quid in an emergency savings accounts thats obviously better than having to borrow off family to make your dmp repayments (or anyone else for that matter) or having to go back to your creditors and redo your agreement or not paying your dmp. Make sure you have allowance for everything - christmas, birthdays, entertainment, car tax, insurance -everything! - you can always readjust if after 6 months you have heaps of spare money (unlikely though!). There is obviously a fine balance to be struck between having a budget that's as tight as a tight thing and going mad and not being able to pay the debts off as fast.
3) In terms of having a baby etc - again that's not really something your creditors have any say over - if you have a baby you tell CCCS your circumstances have changed and you now have x,y,z expenses and they will adjust your budget and let your creditors know accordingly. Indeed if anything changes tell CCCS and they will try and help or pass on the message to creditors. CCCS should check in with you every year anyway just to check you are managing on the budget o.k anyway.
Best of Luck
df

eyeopener2

Glad I re-read the thread because DF has written what I was going to!

Look, you've made he brave decision and you can now look forward to being Debt Free. You need to get the ball rolling first and address he mortgages, babies, etc when/if they become due:p

So, where are we now? Santander may be a problem but obviously that depends on the minimum term you you have to serve for that £200 and if you have to make minimum deposits. Do you know the details? You need to find out before your CCCS chat.

I would certainly change your mortgage back to repayment and base your DMP on that and everything else you will budget for. If the mortagage rate rises or you struggle getting a good rate then you adjust the DMP payment accordingly. Get the repayment sorted first, worry aboutt the other stuff in 2018 or whenever it is.

Good luck, you've done the right thing. Just get all your info together and budget for every little thing you can think of.

E2

eyeopener2

Oh and CCCS will check you after 6 months and then every year to re jig your budget if necessary. It's part of the deal.

monday_blues

Thank you so much DF and E2, your posts were really helpful. I have stopped crying now - cant believe how it just gushed out and once started, couldn't stop. I will phone mortgage company and find out what rate they would give me to fix the remaining part just now, and (b) what my repayment will be on a repayment basis and not interest only.

The Santander deal I know I had to (a) deposit at least £1,000 in account pm (b) have at least 2 direct debits set up - both of which I've complied with, but not sure how long you need to keep the account. The £200 was only paid to me the other day, but has already almost disappeared in overdraft !!!!!

I see a lot of people on here who go with DMP, IVA, DAS, and some who continue to shave off budget in order to make payments - presumably the latter dont have their interest frozen or interest rates reduced???? Am I right in thinking that? My deficit on paper isnt huge, but monthly ffor example this month after xmas, we have CH not working properly but cant afford to get it fixed, phone bill overdue which I hadnt budgeted for - although I knew it was coming, didnt put any money away and now if I pay that, something else cannot be paid, I have a celebration to attend which need to go to, and a 70th birthday in Feb to buy for - and really cant afford any of this stuff.

Before I plucked up the courage to phone CCCS today, my intention was to
1. write to creditors asking to give me a reduced interest rate and/or payment
2. phone santander and ask for a contra-loan to extend my current loan from 2 years remaining to ? years to reduce the monthly repayment
3. or, ask santander about a secured loan (as dont want to ask dodgy companies like welcome finance etc)

Do any of these suggestions sound an option, I have tried 0% cards but think we over-committed and dont think anyone will lend. Tried new loan through santander a few months ago, at the suggestion of the employee - wish I hadnt, as rejected - as I knew I would as "over committed", so other than the above suggestions, I cant think what else to do to make life liveable for me and my family. What do you's think?

What if our car needs replaced, like badly - conks out on us - and we need a car for work - how do you deal with things like that on a dmp.

Also, my creditors are
Santander - loan and mortgage
Intelligent Finance - credit card
Nationwide - credit card
Barclaycard - credit card
What bank should I approach for a new card that would safeguard our funds?
Intelligent finance card is in my name, but husband's wages go into his own Bank of Scotland account - can they dip into his account to take money?

Anything else, please feel free xxx

monday_blues

Oh, and sorry about this - but all unsecured loans and things, can anything happen to our house? if we pay the dmp amount every month. anything mega nasty happen?

monday_blues

Anyone any advice on basic bank accounts for if i went down dmp route? Would co-op cashminder be best based on who I have cards with already?
Would they give me and my husband an account? or a joint account?

Just browsed but it appears you need to phone them to apply/arrange?

Help please?

monday_blues

Help.... is a DMP the way to go? Is it a positive or negative thing ?

wannabee_in_credit

I'm on a dmp and my only regret is not doing it sooner. If your debt is unsecured then as far as
I'm aware they can't do anything regarding taking your house (I think a charging order would be worst case scenario).
I bank with Yorkshire but I'm not sure regarding your creditors.
It's a really good thing that you've done to face up to your situation. I really would not recommend more credit even if you could get it. Most people rack up more debt.

monday_blues

wannabee_in_credit wrote: »

I'm on a dmp and my only regret is not doing it sooner. If your debt is unsecured then as far as
I'm aware they can't do anything regarding taking your house (I think a charging order would be worst case scenario).
I bank with Yorkshire but I'm not sure regarding your creditors.
It's a really good thing that you've done to face up to your situation. I really would not recommend more credit even if you could get it. Most people rack up more debt.

Thanks Wannabee in Credit, is Yorkshire independant of other banks or are they linked to anyone? How long have you been on DMP? and did it go smoothly for you? Have you been able to cope with any eventualities i.e. things breaking down/needing replaced, if on a tight budget. I suppose the thought of living without credit is just a new concept :rotfl:and a really scary one!

wannabee_in_credit

I'm coming up to 2 years on the plan and another 5 to go (which I'm hoping to reduce once my littlest starts school).
I lived on credit in the old days and resisted a dmp for months before I finally admitted defeat... how silly of me. It was having the credit available that got me into the mess. I didn't have the discipline to just use it for emergencies. Dealing with debt requires a completely new way of thinking and resisting the idea of having credit for emergencies etc. When you do your budget then allow yourself a small emergency fund. I think mine is 12 a month. But what I also do is put any spare money to a savings pot. For example, my weekly shopping budget is £75, but if I only spend £60 then I put the spare £15 in savings.
I'm getting married this year and although OH is paying for most of it, I really want to pay for my own dress, hair and makeup and I'm determined to save for it. Had to use the savings 2 days before Christmas for a £400 repair on my car (plus more from my current account). Thanks to this site, and following tips on the OS board, I've managed to absorb the extra cost this month and I get paid next week, and still have enough money left to grocery shop this weekend. I've never needed to, but I know if you have a big emergency then CCCS will allow you to reduce payments temporarily to pay for it.
As I say, my biggest regret apart from getting into the mess was not sorting it sooner. I love being on this site, and all the help and tips I get. And I love the feeling of finally getting in control of my finances.
Oh, I think Yorkshire bank is part of Clydesdale but they're not linked with many. My mum banks there and recommended them. I like them too (much better than Natwest who I used to bank with).
Good luck, and keep posting here for advice and motivation.