Do I implement a Debt Management Plan?

Helmsman

Hi all, first time I've posted so be gentle.....

From what I could see from browsing the site, I think I have a slightly unusual situation.

I am self employed and have run up about £62K of unsecured debt as a result of a failed business. This is on top of a £181K mortgage. As you can imagine my repayments on the unsecured debts are about £1200 per month. I earn reasonably well but some months I have a shortfall of several hundred pounds.

I have had a long talk with CCCS and agreed the outline of a debt management plan, but have not implemented it yet as my income varies from month to month and my income has been OK to cover everything for the last couple of months. Also a key dilemma has emerged.

I am lucky enough to have bought a house with plenty of land and the local council's planning rules have changed to allow me to build an extra house in the garden that once sold the profits should cover my unsecured debts and a decent chunk of my mortgage. The main challenge will be to raise enough money to build.

My dilemma is if I am on a Debt Management Plan will I be able to raise money (secured against the properties) to build? There is quite a lot of equity in the current house thanks to buying it in 1994 to secure against but will the fact of a DMP stop lenders considering lending even more?

Also should I consider cashing in my two endowments to pay down some of my unsecured debt? (and hence move to an interest only mortgage for a short period).

I have heard of some people who have negotiated a partial debt write off from some of their unsecured lenders in return for immediate payment. How might I go about this given that I have got equity in the house?

Any help much appreciated. Thanks in advance

rayday2

If you go into a DMP your credit history will be damaged as default notices are almost standard.

In this day and age you will always get finance but you will pay for it at a higher interest rate.

To be honest that is all I can help you with like you said you are very unusual - I am sure in a nice way!

There are plenty more on this site with far more knowledge!