Average/reasonable length of time for DMP?

tpl

Hi there, for those of you with experience of DMPs - can I ask what is the average (if there is one) or a reasonable length of time to complete paying a DMP? And do you still get creditors letters and CCJ threats etc during this time?

I'm just trying to find the best options for my situation at the moment - which I've detailed on other threads! Thanks. tpl.

katy_ann

It all depends on how much debt you have and how much you can afford to pay a month. I can only afford to pay £191 and have nearly £8k debt which will take me to 2016 at the moment, though I am hoping to up my monthly payment in the new year.

I still get letters from creditors and DCA's but I know that Stepchange handle it all for me x

eyeopener2

When I spoke to CCCS now stepchange, they said any DMP under 5 years was good and the average was 7 to 10 years.

However, if you set up your plan and expect say 4 years with frozen interest and then interest is started up again then this would increase the length of time.

Do creditors send letters? At first yes and they come by the truck load but then tend to die out.

Can you still get a CCJ? Most definitely and that has happened to some posters on here, including charging orders, but they are not that common.

Have you spoken to anybody yet? It's not easy, a dmp, but it is the best thing I ever did.

HappyMJ

I would say not much more than 6 years. All the defaults you would get would fall off your credit report by then and you should be able to borrow money again at decent rates such as remortgaging the house.

Mort

If I remember correctly Payplan suggested that 5 years would be the length of DMP to aim for, it does really depend upon the debt level and available income though.

We got numerous letters over the years and the last Halifax default notice was received in the last year of the DMP. No CCJ threats.

eyeopener2

Tremendous effort that Mort. £54k!

tpl

Thanks everyone. re: CCJs - if you get one of those - is it like having another default on your credit? - so having to wait another 6 years from the CCJ before it comes of your credit history?

Yes, I have spoken to stepchange - it looks like a DMP for me would be about 5 years - though a spanner in the works right now as I need to buy another reliable car for work, and the car repayments would mean no surplus for a DMP : ( so therefore i'd have to continue with token payments, so considering BR perhaps (wld rather not do that though).

Has anyone ever negotiated re: reducing the amount of debt you have with creditors, or is this only if you can offer a full and final settlement.

Thanks again.

HappyMJ

tpl wrote: »

Thanks everyone. re: CCJs - if you get one of those - is it like having another default on your credit? - so having to wait another 6 years from the CCJ before it comes of your credit history?

Yes, I have spoken to stepchange - it looks like a DMP for me would be about 5 years - though a spanner in the works right now as I need to buy another reliable car for work, and the car repayments would mean no surplus for a DMP : ( so therefore i'd have to continue with token payments, so considering BR perhaps (wld rather not do that though).

Has anyone ever negotiated re: reducing the amount of debt you have with creditors, or is this only if you can offer a full and final settlement.

Thanks again.

A CCJ is bad..try and avoid getting a CCJ. If you own nothing (i.e a house with equity) and are acknowledging your debts and making efforts to repay them then they will not take you to court to get a CCJ.

You can get a cheap car under £2,000 and not have too many worries about it being taken from you if you get into too much trouble. The debt would be part of any DMP agreement.

However, a car on hire purchase may be a better idea as you won't be owning the car and if you can't meet a payment they just take the car.

You need to be in default first and making payments and at the same saving some cash to make a full and final settlement to reduce the amount of the debt. You will still have the defaults on your credit record for 6 years.

tpl

This is my SOA if you had any comments? I have posted it elsewhere too, but I think its gotten a bit lost on the threads.

I won't be able to avoid a CCJ if I'm on DMP as I have a shared ownership mortgage with HA. Though its unlikely to have equity, but possibly. I bought it in 2006 near a peak housing market.

Why is the CCJ so bad?

I can't get a hire purchase car due to credit defaults. I can only get one now by my employers assisted vehicle purchasing scheme, where they give you the money and it gets taken out my salary monthly.

The only way I am considering getting out of this situation is using my secured overdraft attached to my mortgage (variable interest rate 1.09%) and writing to my creditors asking for a discounted settlement and using this to pay it. (I know people generally think this i unwise, and it probably is) - either that or BR, it seems to me.

Otherwise I either won't have a car for work (and won't be able to work!), or I stay on £1 token payments and never get anywhere!. I;d have to set up a DD to pay into O/D monthly afterwards (its not linked to my current account).

The surplus currently in this SoA has only been there since November since acquiring permanent job, after years of studying working part time, doing temporary jobs etc. And I need to get the car with it, hence I won't have any surplus for a DMP.



I feel like I'm a bit up the creek without a paddle to be honest with not many options, except the next one which is BR - I've also posted on BR forum to try and get some advice and have been in touch with a local debt charity and Stepchange.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1431
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 300 (from current lodger)
Total monthly income.................... 1731

Monthly Expense Details
Mortgage................................ 305
Secured/HP loan repayments.............. 53
Rent.................................... 320 (this will go back to 220 in 3 months time as I am in arrears by £300)
Management charge (leasehold property).. 11
Council tax............................. 105
Electricity............................. 45
Gas..................................... 40
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 15
Mobile phone............................ 24
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 25
Groceries etc. ......................... 200
Clothing................................ 30
Petrol/diesel........................... 60
Road tax................................ 12
Car Insurance........................... 40
Car maintenance (including MOT)......... 25
Car parking............................. 5
Other travel............................ 20
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 22
Pet insurance/vet bills................. 40
Buildings insurance..................... 10
Contents insurance...................... 20
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 15
Entertainment........................... 17
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1507


Assets
Cash.................................... 0
House value (Gross)..................... 72500
Shares and bonds........................ 0
Car(s).................................. 400
Other assets............................ 0
Total Assets............................ 72900


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 62034....(305)......1.09
Secured Debt.................. 1500.....(0)........1.09<
Student Loan...................4000.....(53).......5.3<
Student Loan...................3209.....(0)........5.3
Total secured & HP debts...... 70743.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
HSBC Overdraft.................1976......1.........0
HSBC Loan......................2240......1.........0
Barclays Loan..................7977......1.........0
Total unsecured debts..........12193.....3.........-

Monthly Budget Summary
Total monthly income.................... 1,731
Expenses (including HP & secured debts). 1,507
Available for debt repayments........... 224 (although I will soon need to get a reliable car for work with this via employer vehicle purchasing scheme)
Monthly UNsecured debt repayments....... 3
Amount left after debt repayments....... 221

Personal Balance Sheet Summary
Total assets (things you own)........... 72,900
Total HP & Secured debt................. -70,743
Total Unsecured debt.................... -12,193
Net Assets.............................. -10,036

HappyMJ

hmmm awkward one really. Is your share of the propety really worth as much as you say? If it is you have £10,000 of equity.

I'd consider putting the lodgers rent up by a little maybe up to £80 a week.

Who would own the car that the employer would finance? If they lend you the money and you buy the car then they become a creditor and your car becomes an asset which any creditor can claim for themselves whether you need it or not if it's worth more than £2,000 then you can say goodbye to the car. The employer then has equal standing with all your other creditors regarding the loan taken out to buy the car.

What is wrong with the current car?

tpl

Yes I know! Yes the property details are as I outlined in the SOA, so yes there is potentially £10,000 equity (if it is sold for the same price I bought it (which might not happen, as I bought it in near a peak housing market) and minus all the fees needed to sell.

I'm assuming I would own the car, but I'm not really sure - they give you a cheque for the car purchase (after you have found the car and they have valued it) and then take monthly payments out my salary with 4% interest (its like a low interest loan).

''if it's worth more than £2,000 then you can say goodbye to the car. The employer then has equal standing with all your other creditors regarding the loan taken out to buy the car''

......do you mean if I go bankrupt? As I don't plan to default on this payment if I get the car, and stick to a £1 monthly token payment on on the other creditors - as advised by the debt charity.

CCCS also suggested getting the car now, keeping on £1 token payments to other creditors, and then going on a DMP or BR when I've paid it off (12/24 months) depending on what repayments I can do.

They also said to call the Insolvency Service now and asked if i could keep the car if I went BR, as its required for my job. They said it would be a good argument.

My car: (windows don't work (only go down not up, so have to keep them up permanently!), heater doesn't work - windows don't demist, and its cold), and the technical stuff I'm afraid has gone out my head since my MOT/service in May - but engineers said it might not last until the next MOT/service, or I'd have to spend alot of money (more than its worth). on it next time to keep it together, if it was possible Id have to call them, to ask the exact details about what they were referring to. Its 12 years old and worth about £400 on the open market due to its condition, And...it definitely won't last 5 more years if I'm in DMP for 5 years!!!

Hmmm, this is difficult, I'm sorely tempted to use the low interest secured overdraft to pay off the creditors, if they will come to a reduced settlement figure.

Thank you for you time and thoughts. Anymore would be great!