Is a DMP really the right thing for us?

Livvipivvi

Trajal wrote: »

Just spotted this.

If you do decide to go onto a DMP you need to move your current account elsewhere quickly. See the important thread about setting off here - Newbie not allowed links yet

Frankly, I didn't get into any debt at all with my main bank, I moved accounts specifically to avoid this, even when I wasn't in a difficult financial position (and likewise now, I'm in a good place, but I would never borrow anything from my main bank).

I'm just in the middle of switching . It was a bit of a job to get someone to give us an account to be honest, we weren't applying for any od's either. I think it's the second bank marking our credit score because it's not like we are behind on anything or upsetting anyone else, and the catalogues are upping my limit not reducing it. HSBC or Santander wouldn't touch us. Natwest and Barclays are the ones we owe money to so they were out, but Halifax gave us a reward account so that was a relief

I agree with the whole not putting your eggs in one basket thing, so whether we get a DMP or not, I think we will continue with our plans to switch.

Trajal

You'll find that it's less about your current issues and more to do with having more than one current account. I wanted another current account from lloyds and they wouldn't give it to me because I have an open natwest and santander account on my credit file - despite not having used the natwest account in years and years - they don't seem to like you having more than 2 it would appear.

Livvipivvi

Trajal wrote: »

You're actually not in that bad shape to be honest. A DMP will certainly help you with the administration of everything, which looks a little chaotic to me but to my eyes everything could be accomplished here by talking to a few of those to whom you owe money and a combination of snowballing debt/cutting spending in some key areas.

The old bank OD people can go jump, in my view. It is completely unacceptable of them to expect you to pay £100 a month to repay this.

I would begin by getting in touch with someone in their senior complaints escalation service (they all have something like this) and asking for a breakdown of what is fees, interest, etc.

Explain that they can't get blood out of a stone, ask them to freeze the interest and your payments will then chip away at the capital. I assume that this facility is no longer available to you anyway, so it shouldn't have any effect on your day to day spending.

There are some areas where I think you should cut your spending while you deal with the debts. Groceries are one, clothing another. Estimated savings to be made: £200

I appreciate that you have kids but packed lunches, home cooking and batch cooking can be done for considerably cheaper than you are listing. You would be amazed at how much you can potentially save here if you start dropping brands and planning ahead with your meals (and the costs attached thereto).

TV Landline and Broadband seems unusually high - I pay about that at the moment and I have the XL virgin tv pack with high bandwidth broadband etc. If that's what you are on then you need to cut it back - get freeview for a bit, there are plenty of cheapo broadband and phone deals out there too which should be able to save you. Estimated savings to be made - £35

Join the MSE Energy club thing (one of the options at the top) and fill in details to be absolutely sure that you are on the cheapest deal possible for your gas and electricity.

Now you mention that you have BNPL on your catalogues. I've done this and it sure stung, mainly because the interest became payable which caused the monthly fee to rise so high. It was a while ago but I got in touch with Shop Direct and they kindly agreed to freeze interest and have me pay at a steady rate. It stopped me from being able to use the catalogue until it was clear, but it proved to be the best thing I could have done. I managed to negotiate a relatively painless six months of low payments with them which bought me time to be able to throw all available money at the other debts. Once those were done I had much more available to me for Shop Direct and overpaid the catalogue to nothing within a year. I strongly recommend getting in touch with your catalogue company and talking them through the situation. Offer them say £100 a month for six months and ask to have it reviewed after that.

This will let you use your other available money to pay down some of the other stuff, including your current account overdraft and get rid of Next Catalogue completely.

Yes, you could go into a DMP but I honestly don't think you need to - a quick chat with a couple of these companies and some sensible offers of repayment should see you right.

But you'll need to cut some of your services down and start being a bit better with how you spend your money.

Haha! I just spent ages replying to your post, but because it took me so long I got logged out and lost it all :eek:

Never mind, thank you for taking the time to post, your advice has been really helpful.

My reply in a smaller response before I get logged out again :rotfl:....

we don't really spend that much on shopping, I overshot it for the purpose of the SC DMP arrangement so that we would have some money left every month to save in a rainy day fund. At the moment we don't have any backup funds at all, which is why whenever something has packed in or the kids have needed something we have resorted to buying off the catalogues. By having a bit left to put by at the end of the month, I was hoping to be able to break the cycle .

I would say realistically you could take £130 a month of the food and clothes budget off .

It sounds as though we are on a simular package to you with virgin. We cant leave them at the mo because we are still on a contract. It wont be long before it ends though, so I rang them. I asked about downgrading the TV and broadband (only basic landline anyway) and they said that if i were to reduce the package, it would cost more :eek:. They said its because of discounts that I'm getting now and I wont be entitled to them if i reduce the package. As I'm coming off the contract soon though and I've been a customer for so long, they have given me another discount of £5 a month. I'm already on paperless billing, but I could save another £5 by paying by DD, but I'm torn on what to do as I like the control of being able to pay when I want, which helps with my budgeting and paying by DD would take that away from me. Any whoo, this service is now £55 or £50 if I start paying by DD. Not as good as a £35 saving, but suppose its a start .

I rang the collections team at barclays(second bank). They were not very helpful. They said that they wanted to set up the 6 month payment plan and if I couldn't do that, then they will have to send the debt to the next team and they would sell it to a debt collections agency that will add fees. I said that i obviously don't want this to happen as i am trying to lower the debt not increase it. They said that they can see that I've paid £80 off the debt since the end of jan, but that it's not good enough as I'm not paying the debt as fast as they want me to. At the moment there are no other charges going onto the account other than the interest, which is about £13 a month. I asked about getting this frozen as I don't want the account to be active anyway (it never has been really as I was sort of pushed into getting the bank account by barclays, another story). They said a big NO and would not budge.

Do you think that I will have to let them escalate it to the next department before they will freeze the interest?

I'm definitely going to give the catalogue a ring though, cant see that theres any harm in it, other than the worry that if something should pack in at home, I'll have no back up as they will stop me buying from them. Even though ordering is the last thing i want to do, it's always comforting to know you've got a plan B when you are so skint. But then I'll have to take the risk if I want to sort this problem and if you dont ask, you dont get .

I will also join the MSE fuel thingy. I'm on a pretty good tariff with the usual bells and whistles these days..Dual fuel, online management, paperless etc, but its worth a look

Thanks again for all your help

Livvipivvi

Livvipivvi wrote: »

we don't really spend that much on shopping, I overshot it for the purpose of the SC DMP arrangement so that we would have some money left every month to save in a rainy day fund. At the moment we don't have any backup funds at all, which is why whenever something has packed in or the kids have needed something we have resorted to buying off the catalogues. By having a bit left to put by at the end of the month, I was hoping to be able to break the cycle .

I would say realistically you could take £130 a month of the food and clothes budget off .

Although this does still leave £70 a month to cut back on. Did your £200 savings estimate include the school dinners Trajal?

Trajal

I think that you should make more of a fuss with Barclays. Try calling head office and asking to speak with the chief executives office - if they query why, explain that you need to talk to the most senior complaints team.

They will have more powers than the normal guys and discretion to help you out, particularly if it looks like you're going to cause a lot of fuss (like me haha).

Virgin are talking nonsense when they make those claims, again try to get through to a more senior team which will have more discretion than the normal phone people. I managed to get a lot of leeway from them when I called. Have you really been with them less than a year? Seems unlikely, surely you can give a month's notice and demand a cessation of service? I'd ask them how you go about doing that as well.

They aren't comparing apples with apples. What they have said is that the cost of your current large (and discounted) package is more expensive than the cost of a potential future smaller (and undiscounted) package. Which may be true, but what is stopping them from applying discounts to the smaller packages?

In my view you really do want to drop that food and clothing budget a bit more - I know it's very hard but forward planning, batch cooking etc should be able to save you more money. Better to cut deeper than you need - try some of the money saving recipes on the old boards here.

Trajal

Livvipivvi wrote: »

Although this does still leave £70 a month to cut back on. Did your £200 savings estimate include the school dinners Trajal?

Yes it did, apologies for not making that more clear.

Livvipivvi

Trajal wrote: »

Yes it did, apologies for not making that more clear.

Thats fab, thanks. Look out Aldi

I'll def google the number for head office and ring barclays tomorrow. I just added it up and I've paid a total of £95 between feb and now. Giving the size of the debt I don't think thats unreasonable at all, but they still wont help me.

I've been with virgin for about 11 years in all, but I took out a new contract (18 mnts) when I had a new Tivo box. Its got a few months left .

Livvipivvi

Another thought, or 3 lol

1. If I move our main banking to Halifax, will Natwest start demanding all of their od back within 6 months like barclays?

2. Does anyone know what kind of interest I'll be paying if the od is always maxed at about £2950 and so how much I would have to pay to them each month to keep chipping away at the balance? Nominal EAR 1st £100 0.00%, Over £100 is 18.28%, or annual rate is 19.90% after the first £100. Currently the balance increases as the month goes on as hubby is paid weekly and we save for the end of month bills, then is usually maxed out when everything is paid. Interest is usually between £37 and £40 a month at the moment.

3. Can they increase the APR on the loan if we don't bank with them anymore?

Trajal

1. Possibly, but again hit their head office etc.

2. Looks like 19.90% but I would certainly try to negotiate (see 1) with them to get it frozen given the exceptional financial circumstances.

3. Depends on the loan - check the small print, they might very well have a fixed rate or it could be variable. My understanding is that the majority of loans the banks have in very small writing the ability to change it at will for whatever reason they like including no reason at all as long as they jump through various regulatory hoops in terms of letting you know when etc. Same as (1) applies here though, if you are meeting payments as requested by them at the outset of the agreement it's unlikely that they will do something which could potentially jeapordise the loan being repaid.