DMP & Mutual Support Thread - Part 9

Pink-Angel

inbetweener wrote: »

Hi Guys,

Has anyone had a solicitors letter arrive through the post?
I can see they are part of the lloyds group who i owe the debt to on a credit card..

I've had some strongly worded (and quite frankly scary sounding) letters due my Lloyds debts while I've been on my DMP. Be guided by Stepchange on these types of things. While you're paying they're extremely unlikely to follow through with threats, so as unsettling as it try not to worry.

Bev45

Time_to_face_the_music wrote: »

The problem is that you won't have the spare money available to save as it will be tied up in unsecured debt payments unless you earmark it for your mortgage now.

Not sure if this has been properly explained by StepChange yet if you have only used Debt Remedy or had a preliminary call but all of your income will be balanced against your essential expenditure, then what is left over will be used to pay your debts. Have you already spoken to StepChange and provided all your I&E details?

After your normal essential bills, they have a list of target amounts for things like food, clothing, haircuts, leisure, emergency fund etc. You need to fit within these targets and while it's possible to apply a small "fiddle factor" to each, e.g if you don't have pets, invent some; if you don't smoke, you do now etc. The question is would this add up to enough to save the interest on your mortgage?

Do you know how much the difference is between your interest only payment and a normal repayment mortgage? If so, let us know here and we can probably easily see if it's do-able in your figures. If you have already given all of your details to StepChange, it may be a bit more difficult but it still could be possible.

Having said all of that, I still think it would be better for you to change back to a repayment mortgage now and get that money protected in your DMP. How long have you been on interest only, it is long enough to increase your repayment or extend the life of your mortgage? Did your mortgage company know you were in financial difficulty when you asked to change to interest only?

Sorry there are so many questions but it's essential to get the full picture before giving advice on this. Please don't worry too much, I am sure there is a way around this.

Hi thanks for the reply, it's so helpful to speak to others who are actually going through this. I have spoken to a step change debt Advisor and given all our details, and they have worked out what we can pay back and what our essential expenditure will be. Our mortgage is 140000, and we pay 293 interest only payment at the moment, for a repayment it would be 800, so a 500 difference. We just changed our mortgage when we had our first child and I've just had our second a few months ago:) I'm going to speak to the mortgage company again on Monday to see if there is an option of extending it, it's over 20 years at the moment. I was running my own business, but I'm not working at the moment, so we just relying on my husbands wage, but am hoping to go back to work soon so hopefully our circumstances will be changing

antonic

I would also add that if you are using Noddle to monitor your credit rating, as it only updates monthly, the figures shown as outstanding can be months behind.

For instance my four credit accounts show the amount outstanding as higher than what Payplan do.

loveka

Bev45 wrote: »

Hi thanks for the reply, it's so helpful to speak to others who are actually going through this. I have spoken to a step change debt Advisor and given all our details, and they have worked out what we can pay back and what our essential expenditure will be. Our mortgage is 140000, and we pay 293 interest only payment at the moment, for a repayment it would be 800, so a 500 difference. We just changed our mortgage when we had our first child and I've just had our second a few months ago:) I'm going to speak to the mortgage company again on Monday to see if there is an option of extending it, it's over 20 years at the moment. I was running my own business, but I'm not working at the moment, so we just relying on my husbands wage, but am hoping to go back to work soon so hopefully our circumstances will be changing

Hello. Really want to advise you to go onto a repayment mortgage before the Dmp starts. Are you on a fixed rate at the momet that you can't get out of? If not it may be worth going to see a mortgage broker. Having been through it, you need to prioritise sorting out your mortgage rate before a bad credit rating prevents it. Pay more on your motgage and less on the debts essentially.
Also do extend the term if you can. Good luck

jenster78

Hello all, could I please ask some advice.

We've had all our step change info now and will send tonight our forms, together with all the other information. I am also doing my letters for creditors which il send once our account is set up with nationwide.

What I wanted to ask was in respect of direct debits for creditors' who shall be on the plan. Can I cancel now for July or should I wait till my my new account is set up or till everything is set up? Thanks Jenny

jenster78

Bev, we've extended our mortgage to 30 years and on interest only! I wanted to go on repayment but as our unsecured loan (part of mortgage with NRAM) will be on dmp I thought that if they see me moving from interest to repayment they'll think I can afford extra money on this so reject the dmp! But I'm on a funny mortgage and I am really no expert with all this xx

zenshi

This is a hard road to walk!!!!

I feel like I'm not making any head way but at least my debts not rising!

Last month my car was sick and I'm not quite finished paying the bill. Although work has picked up, it's still not where I want it to be which means its very hard to budget!

There are so many jobs that need finishing off around the house ( 16 year renovation project so far :T ) and with work being quiet I have the time to do them but no money to fund the stuff


Oh well, onwards and upwards as they say!

Time_to_face_the_music

jenster78 wrote: »

Hello all, could I please ask some advice.

We've had all our step change info now and will send tonight our forms, together with all the other information. I am also doing my letters for creditors which il send once our account is set up with nationwide.

What I wanted to ask was in respect of direct debits for creditors' who shall be on the plan. Can I cancel now for July or should I wait till my my new account is set up or till everything is set up? Thanks Jenny

Cancel all of your DDs for creditors now. If it's more than 28 days between your last payment and the first payment that will come from StepChange, send a token payment to each creditor. £1 each will do, it's just about showing willing to keep up payments. You can send this at the same time as your letters or do it online.

For other bills, I waited until my new account was open, then set up each DD on new account and cancelled it in old one so I didn't miss anything.

Julie67

Morning all,

Just thought I would pop in. We are four months into our DMP. We are paying a minimum amount just now as we had a relatively small amount of mortgage arrears being paid off at £100 a month which will be paid in July so an extra £100 a month towards the DMP. I will be glad when this kicks in as the debt is coming down extremely slowly at the moment.
At least it's coming down though and not going up. Our debt free date will come down then as well.
I'm still job hunting and doing everything possible to save money.
I'm wondering whether to take the smallest debt and try and pay it
off and then the next one etc. otherwise I don't see us ever being shot of it.
With regards to the mortgage I was also worried about ours being interest only but to be honest we have no intention of staying here so it doesn't really matter and the lower payments are a godsend just now, although our mortgage company have said they would consider changing us over to a repayment if we could prove we can afford it. So I don't think it's definitely a no if your credit history is shot, particularly with your current lender.
Good luck to all those just starting out. It's really not easy, but at least I can sleep at night these days

catandy

Julie67 wrote: »

Morning all,
I'm wondering whether to take the smallest debt and try and pay it off and then the next one etc. otherwise I don't see us ever being shot of it.

that's exactly the stance I have taken as well I needed to see a dent in my figures for me just to feel I was getting somewhere