DMP & Mutual Support Thread - Part 9

Puzzcat

Flutterby83 wrote: »

Hi all, on the advice of Growurown, I thought I'd stop by and say hi......I will be ringing Step Change on Monday to put the wheels in motion to set up a DMP and to be honest, I'm terrified! I have around £13,960 worth of debt owed to Barclays (loan and overdraft), Sygma (Asda Money credit card), Vanquis (credit card), Next and Littlewoods. I also owe money to a local solicitor for my divorce a few years ago but I'm not sure if that will be able to be put into the DMP. I definitely need to move my bank account - any recommendations? Has anyone dealt with any of these creditors previously and if so, what should I expect? I'm hoping that they're all going to play nicely, freeze the interest and accept the DMP, or am I hoping for a bit too much?? Also (last question, I promise!) how long from the initial phone call was it to the start of the DMP? My other half thinks that I'm completely insane for destroying my credit rating like this but I don't see that I have much of a choice, and I'm sure he'll see the benefits once we have extra money during the month

Hi and welcome flutterby,
I took my time setting up my dmp as I had bank accounts to sort out and car repairs to be done so paid token payments for 3 months. If you have no debts with your current bank I imagine it could be set up within a month but realistically most people have to open a new bank account. A basic account no overdraft and with a bank you owe no money too! Co-op and natwest appear to be favourite, I use nationwide.
We all enter a dmp hoping the creditors will freeze interest and everybody has different experiences but in the main I think most creditors freeze or at least reduce interest. I have 9 accounts with 6 different creditors, 8 froze interest and 1 creation (linked to sygma) didn't. I complained to them as my £36 payment was hit with £32 interest, they upheld there decision. I then complained to the FOS and this week creation have agreed to reduce the interest and repay what I paid.
These are your debt and it is very important when on a dmp to ensure you check statements from creditors and update your sc account. It will ultimately be down to you to fight any interest and charges.
Also worth bearing in mind that your total debt is likely to increase prior to starting a dmp, mine went up about 1%.

Time_to_face_the_music

Kate_fixing_it wrote: »

New DMP-er joining the party!

I had been doing okay on my own (I thought) but a spanner in the works involving no more tax credits coming in, car repair and no money for the rest of March broke me. I was totally upfront with DH and I could feel the explosion brewing. I just can't do it on my own any more.

I called step change at 4pm today. I can't find the words to express my relief as I got off the phone. I know I have some tough weeks ahead as the accounts go into default but this feels like a fresh start but it's a little pain now for a big gain later.

Since my LBM I've paid over £4k. My debt balance has dropped by around £3k. Going the right way but with the income dropping so much it's just not possible any more.

Tomorrow I'm off to open a basic bank account. Tomorrow is the first day of the rest of my life.

Kate x

Flutterby83 wrote: »

Hi all, on the advice of Growurown, I thought I'd stop by and say hi......I will be ringing Step Change on Monday to put the wheels in motion to set up a DMP and to be honest, I'm terrified! I have around £13,960 worth of debt owed to Barclays (loan and overdraft), Sygma (Asda Money credit card), Vanquis (credit card), Next and Littlewoods. I also owe money to a local solicitor for my divorce a few years ago but I'm not sure if that will be able to be put into the DMP. I definitely need to move my bank account - any recommendations? Has anyone dealt with any of these creditors previously and if so, what should I expect? I'm hoping that they're all going to play nicely, freeze the interest and accept the DMP, or am I hoping for a bit too much?? Also (last question, I promise!) how long from the initial phone call was it to the start of the DMP? My other half thinks that I'm completely insane for destroying my credit rating like this but I don't see that I have much of a choice, and I'm sure he'll see the benefits once we have extra money during the month

Hi and welcome to Kate and Flutterby :hello:

Few bits of advice from me:

We used Cooperative bank and found them extremely good but the important thing is that it must be a bank that has no association with any of your creditors.

If you haven't already set up the DMP, give some thought to making token payments for a couple of months then starting.
1) It allows you to save an emergency fund
2) It gives you a chance to practice your budget
3) It helps with early defaults

Never forget that while someone is distributing the money for you, that the debt is still yours. You are the only person who must know exactly how much you owe; who is still charging interest and how to fight it; what to do when the creditors don't play nice.

This thread and the ones before it are a treasure trove of experience, help and advice. Everyone here is in the same position as you or has been in the past, so you will never be judged and someone will always offer advice if you come with a question. The support here is second to none so please stick around and ask for any help you need.

TTFTM x

Amyboo

Coming out of lukerdom. I just wanted to say to those that are starting the debt management plan that you won't regret it. The relief I felt when we started ours was immense. I actually started sleeping at night and I stopped feeling so down about it all. We're 5 years in to our plan and still have a long way to go, but I still don't regret starting the debt management plan. The last five years have flown by, but we've still managed to live a life and have little holidays (not expensive ones) away. We would never have been able to do that if we were still Upto our eyes in debt. We really budget and I try and save on the food/petrol money by menu among and walking.

I've picked up loads of tips on here and the support is fantastic. Well done you guys, I don't feel like I'm walking down a road on my own.

Kate_fixing_it

Thank you for the advice. Last night I slept so well for the for the first time me in ages. I'm still a little nervous about starting it but it has to be done. I'm going to take a couple of hours of on Monday to visit the co-op and open an account.

Step change were amazing, I've cut my budget to the bone already and they said I've done well but with the huge reduction of income it's simply not possible anymore to service the debts. The s/c budget is actually more generous than my own calculations.

They've said 6 years and 8 months to be debt free but as with so many people here it's possible to reduce that. Despite the nerves I'm looking forward to the "fresh start" and being in control of my life. I've lived each day for debt repayments, it's constantly in my thoughts and hopefully this will relieve that a little. Please don't take that as me thinking it will be easy - I'm under no illusions - but the relief of having someone to take on some of the stress is overwhelming.

I have 5 credit cards, a loan and an overdraft to dispose of. Not the worst in the world but still outstanding debts that are 50% of my annual salary. I'm married but DH and I keep our finances separate and each pay different bills - literally no financial links at all!

Thanks for the advice regarding deferring the start date, I have car repairs due too and surgery next month. Ideally I'd like it all in place before the surgery but 5 weeks doesn't seem very long to get everything in place, I guess it depends on the creditors playing ball, if they're going to be difficult they'll just be waiting longer to get a payment.

I just want the first difficult part over, I'm dreading all the calls and letters

Kate x

Sazzie23

Kate_fixing_it wrote: »

Thank you for the advice. Last night I slept so well for the for the first time me in ages. I'm still a little nervous about starting it but it has to be done. I'm going to take a couple of hours of on Monday to visit the co-op and open an account.

Step change were amazing, I've cut my budget to the bone already and they said I've done well but with the huge reduction of income it's simply not possible anymore to service the debts. The s/c budget is actually more generous than my own calculations.

They've said 6 years and 8 months to be debt free but as with so many people here it's possible to reduce that. Despite the nerves I'm looking forward to the "fresh start" and being in control of my life. I've lived each day for debt repayments, it's constantly in my thoughts and hopefully this will relieve that a little. Please don't take that as me thinking it will be easy - I'm under no illusions - but the relief of having someone to take on some of the stress is overwhelming.

I have 5 credit cards, a loan and an overdraft to dispose of. Not the worst in the world but still outstanding debts that are 50% of my annual salary. I'm married but DH and I keep our finances separate and each pay different bills - literally no financial links at all!

Thanks for the advice regarding deferring the start date, I have car repairs due too and surgery next month. Ideally I'd like it all in place before the surgery but 5 weeks doesn't seem very long to get everything in place, I guess it depends on the creditors playing ball, if they're going to be difficult they'll just be waiting longer to get a payment.

I just want the first difficult part over, I'm dreading all the calls and letters

Kate x

Hi Kate

Welcome to the thread, good luck with your impending DMP, and don't worry about the letters and phone calls, mostly I found them understanding although I did shirk the phone calls for a long time:o. The letters tend to be automated 'you are overdue' letters so don't take it personally. From previous posts on here I'd probably try to avoid talking to catalogues from the very group as they appear to be downright aggressive.

Once you get started it'll all settle down, I can understand why you'd want it started before your surgery but it if it doesn't happen, hopefully you'll have time to work through it as you recuperate.

Welcome to other newbies Flutterby and Jambuttie, & I quite liked the idea of calling it sparechange:T

Flutterby83

Thank you for all your advice, I will be opening a new account on Monday too! I'm not looking forward to all the calls and letters either but as I've kept my accounts up to date, I'm hoping that they accept the DMP before it gets to them sending out any nasty letters and the like (I know, I can dream!) I have a rough idea of what we can afford to pay and means our DMP will last around 5 years. I'm going to send out token payments of around half of what my normal minimum payment would be, is that about right? Or do I just be ruthless and send ridiculously small payments so they accept the DMP quicker? I've not done this before so I don't know what to do in the interim between setting it up and them getting the first payment from SC. Thank you all for your advice x

Time_to_face_the_music

Flutterby83 wrote: »

Thank you for all your advice, I will be opening a new account on Monday too! I'm not looking forward to all the calls and letters either but as I've kept my accounts up to date, I'm hoping that they accept the DMP before it gets to them sending out any nasty letters and the like (I know, I can dream!) I have a rough idea of what we can afford to pay and means our DMP will last around 5 years. I'm going to send out token payments of around half of what my normal minimum payment would be, is that about right? Or do I just be ruthless and send ridiculously small payments so they accept the DMP quicker? I've not done this before so I don't know what to do in the interim between setting it up and them getting the first payment from SC. Thank you all for your advice x

Keep the token payments low, it will help your emergency fund and help encourage the defaults. £1 to each creditor is enough but increase it to £5 if you really think you need to.

Re calls, keep your Stepchange reference number close to the phone. If anyone calls, tell them you are setting up a DMP with Stepchange and you reference number is XXXXXXXX. Tell the creditor that they need to contact Stepchange as you have authorised them to act on your behalf.

Flutterby83

Thank you, TTFTM, I have to admit I'm feeling better about this already thanks to the amazing support on here I have debts that go out on different days eg, some on the 1st, some on the 14th, some on the 28th, so do I just stop all payments to everyone as from Monday and send out the token payments then? And how often would I need to send them? I think I've already got a way to squirrel away quite a good emergency fund, especially if I only pay £5 to all my creditors for a month! I'm concerned about having a Littlewoods account as apparently the shop direct group are hard to deal with so I'm thinking about just paying the balance (£169) with my overdraft as it is going into the DMP anyway but it means one less creditor to deal with. I can't believe I've worried for so long and now I can finally see a way out! I'm also paying a visit to my GP as there's no way I want to end up in this mess again!!

Time_to_face_the_music

Flutterby83 wrote: »

Thank you, TTFTM, I have to admit I'm feeling better about this already thanks to the amazing support on here I have debts that go out on different days eg, some on the 1st, some on the 14th, some on the 28th, so do I just stop all payments to everyone as from Monday and send out the token payments then? And how often would I need to send them? I think I've already got a way to squirrel away quite a good emergency fund, especially if I only pay £5 to all my creditors for a month! I'm concerned about having a Littlewoods account as apparently the shop direct group are hard to deal with so I'm thinking about just paying the balance (£169) with my overdraft as it is going into the DMP anyway but it means one less creditor to deal with. I can't believe I've worried for so long and now I can finally see a way out! I'm also paying a visit to my GP as there's no way I want to end up in this mess again!!

Whatever month you start the DMP, if you pay Stepchange on the 1st, they will distribute your payments to your creditors on the 25th. You need to calculate your token payments so you make a payment each month between your last normal payment and the first one Stepchange will send.

For £169, I think I would be tempted to do what you suggest and keep Littlewoods out of the DMP. Make sure your current bank is not aware of the DMP arrangements until you have a new bank account elsewhere and your wages, direct debits etc are set up for that. Otherwise they can withdraw your OD and/or offset any money in any account immediately.

Anything you think of, just ask, someone here will always try and help you

Puzzcat

:rotfl:

Flutterby83 wrote: »

Thank you, TTFTM, I have to admit I'm feeling better about this already thanks to the amazing support on here I have debts that go out on different days eg, some on the 1st, some on the 14th, some on the 28th, so do I just stop all payments to everyone as from Monday and send out the token payments then? And how often would I need to send them? I think I've already got a way to squirrel away quite a good emergency fund, especially if I only pay £5 to all my creditors for a month! I'm concerned about having a Littlewoods account as apparently the shop direct group are hard to deal with so I'm thinking about just paying the balance (£169) with my overdraft as it is going into the DMP anyway but it means one less creditor to deal with. I can't believe I've worried for so long and now I can finally see a way out! I'm also paying a visit to my GP as there's no way I want to end up in this mess again!!

I just sent £1 with a covering letter for each creditor every 28 days or so depending when payment was due until the dmp started.