DMP & Mutual Support Thread - Part 9

RAC0207

Hi everyone

Well we finally faced facts that we cannot go on any longer trying to pay debts we cannot afford and have set things in motion for a DMP with StepChange. We have sent off letters to creditors explaining our situation and have given all the requested information to StepChange. They have recommended that we pay £394 per month to 11 creditors which after paying out approximately £1100 a month for so long this seems to good to be true so I'm looking for some reassurance (if possible) that this is right. What I'm asking is, is this likely to be accepted by creditors and do most of them usually accept the situation eventually or are any of them particularly awkward? I'm in Scotland and probably could apply for a DAS which I believe gives more protection but I would prefer to try the DMP to see if that works before going down a more formal route.

Also I sent the documentation to StepChange via email last Thursday and received an email stating that they would look at it within 48 hours but I haven't heard anything yet and I am wondering how long it usually takes and how this process works. Like everyone on here I feel as though my life has been on hold for as long as I can remember due to debt and I'm keen to get this moving asap so that I can start living again!

This forum is a lifeline for those of us starting out on this horrible path and any advice is much appreciated.

Dandytf

Time_to_face_the_music wrote: »

Hi Dandytf and welcome :hello:


Your Co-op overdraft would need to be included as part of your DMP. Do you pay a monthly fee for the benefits of the account? Premium bank accounts which include benefits such as breakdown cover often work out more expensive than paying for the cover separately. I think I used to pay £15 a month for the account and my breakdown cover cost me around £50 this year.

Yes I pay a fee for the co op premium account -co op have already offered to open up a basic account -is it essential I get my salary re directed to a new basic account BEFORE I return the signed DMP agreement with SC?

fermi

Time_to_face_the_music wrote: »

The consensus of opinion from fermi, fatbelly and StepChange themselves is that Nationwide would have left themselves wide open to a complaint if you had gone self managed and they had tried to apply these charges.

I think we all know creditors who try it on and Nationwide were doing it with a vengeance

I'm also told that the NW Money Advice Liaison team would likely be interested to hear of any threats of that nature made by staff or in writing.

Julie67

RAC0207 wrote: »

Hi everyone

Well we finally faced facts that we cannot go on any longer trying to pay debts we cannot afford and have set things in motion for a DMP with StepChange. We have sent off letters to creditors explaining our situation and have given all the requested information to StepChange. They have recommended that we pay £394 per month to 11 creditors which after paying out approximately £1100 a month for so long this seems to good to be true so I'm looking for some reassurance (if possible) that this is right. What I'm asking is, is this likely to be accepted by creditors and do most of them usually accept the situation eventually or are any of them particularly awkward? I'm in Scotland and probably could apply for a DAS which I believe gives more protection but I would prefer to try the DMP to see if that works before going down a more formal route.

Also I sent the documentation to StepChange via email last Thursday and received an email stating that they would look at it within 48 hours but I haven't heard anything yet and I am wondering how long it usually takes and how this process works. Like everyone on here I feel as though my life has been on hold for as long as I can remember due to debt and I'm keen to get this moving asap so that I can start living again!

This forum is a lifeline for those of us starting out on this horrible path and any advice is much appreciated.

Hi RAC 0207, welcome to the forum. I absolutely agree it is a lifeline, I post most days just to keep us on track, and ask any questions, I always have lots.
It's early days for us and Mossop and quite a few others who started on 1st March.
I had exactly the same feelings as you, I just thought its too good to be true, how can we go from paying just around £800 to in our case under £200 a month. Everyone's has a different budget and providing its reasonable the creditors really have very little choice but to accept.
You are not running away from your debt, you are trying to pay and be sensible and move forward, out and under from that awful heavy feeling. I can't tell you the feelings of relief I felt once we had made the decision and signed the forms.
It sounds to me that the amount your paying back is very healthy to start and it may change either decrease or increase depending on your circumstances.
I'm not great on answering technical questions, I don't feel I'm qualified, both HH and Time to Face the Music are fab at answering those kind of questions. But if I could give you any advice from our experience so far it would be
Try not to feel guilty, they can't have what you haven't got!
Take each day as it comes, one step at a time
Most of our creditors have been pretty good and helpful or a bit uninterested once the realise you are with SC and not going to pay what you owe in full!!
When you write to them or if anyone rings you tell them to only contact you in writing, we have had hardly any phone calls and the few we have had have taken this on board and stopped the calls.
Get as much as you can in your emergency fund, remember no credit cards to fall back on, and there is always something you haven't planned for.
It's was really hard to stick to the budget initially, not because it wasn't realistic but because we where not used to budgeting and had very little idea where our money went. I now know to the penny what we spend on everything, and am actually enjoying knocking down the amount we spend on food whenever we can.
The biggest and best thing is that feeling you are actually doing something. It's a great feeling to know you are tackling your debt. It's given us chance to stand back and really take a long hard look at our finances and what is really important. It's taken the pressure off. It's not easy, our credit is shot for at least 6 yrs but for us it is so worth it.
Oh just to add, yes all our creditors have reduced vastly or completely stopped interest.:D
Good luck on your journey, Come and ask questions whenever you want and have a good read through the thread, loads of fantastic advice. Ooh lastly come and have a look on the Old Style thread, loads of great ideas and money saving tips.
Hope it all goes well Julie😀

Growurown

RAC0207 wrote: »

They have recommended that we pay £394 per month to 11 creditors which after paying out approximately £1100 a month for so long this seems to good to be true so I'm looking for some reassurance (if possible) that this is right. What I'm asking is, is this likely to be accepted by creditors and do most of them usually accept the situation eventually or are any of them particularly awkward?.

I'm assuming you have completed the debt remedy tool on the website where you fill in your outgoings and income and that the £394 is what SC believe you have left in your budget for your debts. All my creditors accepted the payments offered when we started our DMP apart from NatWest. We had a large loan with them and they said that the payment we offered didn't meet their requirements. So we upped it a bit and then they were fine. I don't think you will have much difficulty getting creditors to accept the new payments especially as you are going through SC.

Growurown

Dandytf wrote: »

I've today been offered a secured loan 51.% apr(

If there is one thing I have learned from my debt experience is that you don't get out of debt by taking on more debt. It just buries you deeper. In your position I would take the DMP route.

RAC0207

Thanks Growurown and Julie67 for the replies. Yes I went through the Step Change debt remedy and that's where the £394 came from. When filling out the details I added an amount to everything we would possibly use i.e. house maintenance, school trips etc even if we had no immediate plans for these but I figured that the idea is that if you budget for these then you'll have the money if they do occur since we can no longer rely on credit for unexpected bills. Have I done it right? I've spent so long, literally years, worrying about debt that it feels too easy if you know what I mean? If it's as easy as it seems I wish I had faced it long before now! Still no word from Step Change yet, do you think it will be set up before 1st April and if not do I just send token payments again?

Thanks for all the help, it really is appreciated x

Growurown

RAC0207 wrote: »

Thanks Growurown and Julie67 for the replies. Yes I went through the Step Change debt remedy and that's where the £394 came from. When filling out the details I added an amount to everything we would possibly use i.e. house maintenance, school trips etc even if we had no immediate plans for these but I figured that the idea is that if you budget for these then you'll have the money if they do occur since we can no longer rely on credit for unexpected bills. Have I done it right? I've spent so long, literally years, worrying about debt that it feels too easy if you know what I mean? If it's as easy as it seems I wish I had faced it long before now! Still no word from Step Change yet, do you think it will be set up before 1st April and if not do I just send token payments again?

Thanks for all the help, it really is appreciated x

Yes in my opinion you have it correct. Some DMP'ers cut everything to the bone in order to pay off their debt quicker, but I did the same as you and even put some money into the smoking fund even though we don't smoke! I knew we wouldn't cope on a really tight budget and as most of my creditors have stopped interest it doesn't really matter if it takes a bit longer to pay everything back as the cost is still the same whether it takes me one year or three. The only disadvantage is that my one creditor who hasn't stopped interest will cost me more in the long run, but I consider this a small price to pay in order to have some semblance of a normal life.

I wish I had done this a lot earlier too. It would have been so much easier now if I had.

If you are concerned about getting your plan set up then call SC and ask, they are usually very helpful. If it can't be done by the 1st then yes make another token payment and put the money saved into your emergency fund. Some people do this anyway just to have a bit behind them when they start as a life without access to credit is pretty scary until you get used to it.

Hunnies

Some good news to report! After reading again last week about you all saying to challenge if creditor's were still charging interest I decided to send Lloyds another letter asking for them to review their decision. I posted it on Thursday and made sure it had a line in it about making a complaint and speaking with FOS if unsatisfactory outcome etc and they have just called to say they received the letter and will now acknowldege that we are in financial difficulty and have therefore frozen interest for the life of the balance and will be refunding £266 of interest to the account!! Brilliant result, especially as they told me where to go when I wrote a couple of months ago. So pleased, at last a bit of good news. That's now 12 out of our 13 creditors that have frozen interest. The last one that hasn't is again Lloyds but this is for a loan so I'm not sure how that works? They haven't sent any statements and I can't view the loan on my internet banking but according to Noodle it's increasing. What can I do about that?

Mossop01

Hunnies wrote: »

Some good news to report! After reading again last week about you all saying to challenge if creditor's were still charging interest I decided to send Lloyds another letter asking for them to review their decision. I posted it on Thursday and made sure it had a line in it about making a complaint and speaking with FOS if unsatisfactory outcome etc and they have just called to say they received the letter and will now acknowldege that we are in financial difficulty and have therefore frozen interest for the life of the balance and will be refunding £266 of interest to the account!! Brilliant result, especially as they told me where to go when I wrote a couple of months ago. So pleased, at last a bit of good news. That's now 12 out of our 13 creditors that have frozen interest. The last one that hasn't is again Lloyds but this is for a loan so I'm not sure how that works? They haven't sent any statements and I can't view the loan on my internet banking but according to Noodle it's increasing. What can I do about that?

Hi hunnies, well done on gettin interest frozen and a refund thats great!
My bank loan with hsbc had the interest applied at beginning of loan so they wouldnt budge with interest but they stopped charges on the account, dont understand why ur balance would be increasing, worth looking into
Good luck