DMP question

Hootie19

It's looking increasingly unlikely that we are going to be able to avoid doing this (gutted. absolutely gutted)

Do you have to include ALL your outstanding debts on a DMP? I have a Tesco credit card which is 0% interest until September of this year. Is it necessary/worth it to put this in with all the other debts? I've not had the card very long.

Also, my husband uses a credit card with a smallish limit (£500) for his work expenses, which generally makes it easier to claim back as it's not all lumped in with our general household expenditure.

I have seen on the CCCS website that we would not be "allowed" to take out any further cards or loans without speaking to them first, but nothing about keeping existing cards.

I don't want to use a credit card on an ongoing basis any more, but would like to have access to one for major purchases, due to the protection that using a card gives you.

antonic

Is it a joint DMP you are considering with you & your husband ?.

If it is ALL debts should be included including the Credit Card your husband uses for work.

Once the DMP is established you will find that the companies you currently have CC`s with will ask you to return them or cut them up (they did with me), and once on a DMP you will find that your credit history is trashed and no mainstream lender will lend to you.

Hope this helps.

Growurown

Hootie19 wrote: »

Do you have to include ALL your outstanding debts on a DMP?

Also, my husband uses a credit card with a smallish limit (£500) for his work expenses

I don't want to use a credit card on an ongoing basis any more, but would like to have access to one for major purchases, due to the protection that using a card gives you.

My understanding is that you put everything into your DMP. If your husbands card is used only for business expenses that you claim back in full they might let that one go. I would phone and ask them about it. Part of the agreement is that you don't take on any new credit which you would be doing if you keep a card for 'major purchases' and why would you make major purchases anyway? How are you going to pay the card back?

If you need to replace an essential item in the house or get a new car or pay for car repairs etc. just reduce your monthly payment to CCCS to cover the cost. Another idea is that when you start your DMP do token payments for a couple of months to build up a little bit of savings for just such occasions. Also put some little extras into your DMP so you can put that money away each month too. For example if you don't smoke say you do and put that money away each month preferably into a separate account so you can't spend it. I know it is cheating a bit but it makes things easier.

Good luck and don't forget the DMP Mutual support thread. Lots of good advice on there about setting up your DMP.

Hootie19

Thank you. Yes it would be a joint DMP, even though the only unmanageable debt we have is his. I didn't think that only one of us could do it. I thought it had to be joint. Is this not the case? I only have the Tesco card (which is at its limit) and an overdraft.

I didn't make myself clear about making major purchases using a credit card. I meant that we would save up for whatever we needed (the cooker is looking a bit dodgy at the moment, for example!) and then make the purchase on a credit card, which would be paid off with the savings.

Actually, if I got someone else to use their credit card to buy something on my behalf, would the protection still apply, or is it only avaiable to the person whose name is on the card?

antonic

Hootie19 wrote: »

Thank you. Yes it would be a joint DMP, even though the only unmanageable debt we have is his. I didn't think that only one of us could do it. I thought it had to be joint. Is this not the case? I only have the Tesco card (which is at its limit) and an overdraft.

Are all the debts joint debts OR are they in his name only ? - If joint you may consider a joint DMP, if solely his let him do the DMP. If this was me, I would do a DMP on my own as why would you want to trash your own credit history unnecessarily ?

I didn't make myself clear about making major purchases using a credit card. I meant that we would save up for whatever we needed (the cooker is looking a bit dodgy at the moment, for example!) and then make the purchase on a credit card, which would be paid off with the savings.

Actually, if I got someone else to use their credit card to buy something on my behalf, would the protection still apply, or is it only avaiable to the person whose name is on the card?

Yes the protection will go to who bought the goods NOT who has them.

Hootie19

Thank you again.

He has:
Personal loan from his bank, which is in his sole name (although the money was spent jointly). The original sum was £20,000. The balance is in the region of £11,000. Has about three and a half years left.

Three credit cards, again in his sole name (and again, the majority of the money was spent jointly on two of them - the third one is the one he uses for his work expenses). Balances are £5,000 (Barclaycard), £2,775 (Sainsbury Mastercard) and Smile, currently standing at a little over £300 (although he is supposed to use it just for work expenses - not a work issued credit card, but his own personal card - I am fairly sure that he has bought stuff on it himself). Barclaycard (which he is supposed to pay himself) is in arrears. Mastercard (which I pay) is up to date. Smile, as far as I can make out, is up to date.

Overdraft on his bank account, again in his sole name. Limit is £500.


Our joint debts are:
Mortgage - balance about £98,000. Monthly repayment £1,205. Just under 10 years to run.
Repayment of overpayment of tax credits. Original balance £9,000 ish. Being repaid at £60 a month. No idea of current balance.


My personal debts are:
Credit card (0% interest) - balance £2,800
Overdraft of £600
Repaying some purchases on my son's credit card (although this obviously isn't in my name). I have been paying this back at £30 per month. (But as this isn't in my name, it wouldn't be included in the list of debts accepted on a DMP)

antonic

Hi Hootie

Fill this in :

http://www.makesenseofcards.com/soacalc.html

and we can give tips on making his money go further.

The important decision though is if he goes down the DMP route can he stick to it ?

(FYI I started a DMP with £22k debt in Dec 2005 and will clear it in Dec 2012)

I wont lie and say I found it easy (I havent) but when I have really needed money my dad has lent me the odd £30, BUT at the end I will be debt free and be better off financially.

Hootie19

I have posted the SOA recently on another thread (https://forums.moneysavingexpert.com/discussion/3892059), but here it is again (slightly updated):

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 4
Number of children in household.........
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 1070
Partners monthly income after tax....... 2000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 3039

Monthly Expense Details
Mortgage................................ 1205
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 170
Electricity............................. 39
Gas..................................... 39
Oil..................................... 0
Water rates............................. 55
Telephone (land line)................... 15
Mobile phone............................ 74
TV Licence.............................. 12
Satellite/Cable TV...................... 65
Internet Services....................... 27
Groceries etc. ......................... 500
Clothing................................ 10
Petrol/diesel........................... 150
Road tax................................ 44
Car Insurance........................... 63
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.4
Pet insurance/vet bills................. 0
Buildings insurance..................... 23.92
Contents insurance...................... 0
Life assurance ......................... 31.51
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 0
Tax credits repayment .................. 60
Total monthly expenses.................. 2660.83


Assets
Cash.................................... 0
House value (Gross)..................... 180000
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 182500


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 111000...(1205).....3.19
Total secured & HP debts...... 111000....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
Sainsbury mastercard...........2775......90........29.9
Barclaycard....................5030......60....... .20.9
Tesco Mastercard...............3000......25........0
Personal Loan..................11000.....407.1.....0
Smile..........................500.......100...... .
Total unsecured debts..........22500.....646.1.....-


Monthly Budget Summary
Total monthly income.................... 3,039
Expenses (including HP & secured debts). 2,660.83
Available for debt repayments........... 378.17
Monthly UNsecured debt repayments....... 646.1
Amount short for making debt repayments. -267.93

Personal Balance Sheet Summary
Total assets (things you own)........... 182,500
Total HP & Secured debt................. -111,000
Total Unsecured debt.................... -22,500
Net Assets.............................. 49,000

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

Additional information from the other thread:
eta - just realised that I've not included the dreaded bank charges. I got clobbered with £70 this month. Ouch. On average, I reckon we accumulate £30-40 between us.

eta again - the mobile phone amount sound horrendous, but it is for three contracts (mine, my husbands and my youngest son's). They have well over 12 months to run so not able to be cancelled and changed to PAYG for while.

eta (again! sorry) - also didn't include my £600 overdraft (used fully) and my husband's £500 overdraft (also fully used).

At the moment, he is being treated for stress/depression and is not coping at all well, so all this is on my shoulders. He will just go along with whatever I tell him.

And (donning flameproof suit) I will be taking over control of all the money. He will not be having access to anything, other than "pocket money" which I will give him each week (if we can afford it).

I told him after he got paid last week that I didn't want him spending any money at all on his debit card, nor taking any cash out, without talking to me first.

On Friday, he went and did some (unnecessary) shopping in Tesco, and I notice from checking his bank account today, that he has loaded £20 onto his online poker account. So clearly he isn't taking on board anything I say, hence me denying him access to money. At least for the time being.



If he went down the DMP route on his own - how would that impact on me? I think my own credit record is good, so would that be tarnished at all by my husband having a DMP? What about when our mortgage fixed term comes to an end and we have change? Would that likely impact on the new interest rate?

antonic

Thanks for the SOA, now for the difficult questions !

1) Are all the bills split 50:50 and the amounts shown his half share ?.
2) Pay off the highest % Credit Card NOT the one with the highest balance
3) £500/month on food for 3 people is a lot ( I spend approx £120/mth and I`m single - try the Old School Board for tips on saving money)
4) Him going onto as DMP should NOT affect you, as they are his debts and not yours.

If you need help/advice give us a shout

Hootie19

Thank you antonic. No - that's the household income and expenditure.

This is what worries me the most "Amount short for making debt repayments. -267.93".

I just can't see, if we carry on without the DMP, how we can exist for much longer.

And yes, the food shopping bill is high, but it's actually four adults (and a dog). Both our sons are still living at home with us.

antonic

Hootie19 wrote: »

Thank you antonic. No - that's the household income and expenditure.

This is what worries me the most "Amount short for making debt repayments. -267.93".

I just can't see, if we carry on without the DMP, how we can exist for much longer.

And yes, the food shopping bill is high, but it's actually four adults (and a dog). Both our sons are still living at home with us.

I can see now why you are considering a joint DMP.

The shortfall could be covered when you start your DMP because your monthly payments will be reduced to an amount LESS than the £646/month your paying now - if it goes down to less than £400 your at a break even point

(For example before I started mine I was paying approx £600/month in debt repayments, I am now paying *about* £270.month a saving of approx £330/month).

If you go down the DMP route use a FREE company like CCCS or Payplan (Who run mine) DO NOT use one you pay a fee to.

Once a DMP has been set up, you can then adjust your budget to cope.

Any more questions please post them as we are here to help.