At what point....

Newyorkdreams

do you decide to give up on taking full responsibility for your debts and opt for alternative options?

Looking into this and would appreciate other points of view.

I'm trying extremely hard to pay off my debts leaving me and OH with very little disposable income but have heard personal stories from others with the same income (not sure about expenditure) who have agreed to a DMP and/or bankruptcy with a vast reduction in the actual debt owed. Just feels I'm being a bit of a mug trying to pay the whole lot off at 100% (plus interest) when others in a similar sitaution are paying much less.

Any views welcome.

NYD

gizmo111

At the point where you are making minimum payments and then using the little bit of credit to buy food and get to work.

OR

At the point whee you have no hope of decreasing the debt and each month the balances have gone up through further borrowing, or missing essential payments to keep the juggle going.

Sure theres many others

wannabee_in_credit

My point came when I was spending over £850 a month just to service minimum payments on my debts, and nothing was going down balance wise. I was on maternity leave and my OH was on ssp at the time. I just finally admitted I couldn't cope any more.
It took a few months into my dmp for me to realise that I'd made the right decision and start to feel better. My initial feelings were shame and embarrassment, but now I'm quite proud that I don't want to be keeping up with everyone else, and that I don't have to rely on credit to get me through.

Hopelessly_Hopeful

do you decide to give up on taking full responsibility for your debts and opt for alternative options?

With respect; I know many people on DMPs and none of them have given up full responsibility for their debt! The intention is to pay back 100% of the debt owed, they are just asking to be allowed access to reasonable interest rates in exchange for giving up credit facility and having their credit rating trashed.

My lightbulb moment came when I had spent 2 years trying to pay down my card in the face of rate jacking and not making any progress. I then used the minimum payment credit card calculator on MSE and saw it was going to be nigh on impossible to ever pay it off. I sought advice from debt charities and was made aware of DMPs.

Good luck with your decision.

HHx

rizla_king

When circumstances mean that paying off 100% is no longer a realistic proposition, or will occur over an unreasonable period of time? Paying debts is good, but being miserable for decades or the rest of you life is not.

When creditors will not cooperate in a reasonable fashion so that you can actually reduce the debts, rather then them increasing due to interest and charges?

When harassment from creditors and DCAs just becomes too much? Not everyone can cope with it.

When debts have been sold on to DCAs for 5p in the £? No point paying them the whole amount. However much you pay a DCA, the original creditor that you borrowed from has got all they will ever get. You could pay the DCA the debt 10 times over and the company you actually borrowed from will not be paid any more.

harrys_dad

From your signature it appears you are paying your debts off in 2013 at the rate of nearly £1000 per month, with a DFD of August 2015. Just keep going and in a little over two years you will have nearly a £1000 a month SPARE CASH to do with what you want. Just continue as you are and keep knocking the months off, it will be worth it.

KT2802

Really helpful thread NYD. I am in a similar situation to a certain degree and am currently trying to decide whether to go on a DMP.

What gizmo said really struck a chord with me

gizmo111 wrote: »

At the point where you are making minimum payments and then using the little bit of credit to buy food and get to work.

OR

At the point whee you have no hope of decreasing the debt and each month the balances have gone up through further borrowing, or missing essential payments to keep the juggle going.

Sure theres many others

I am at the point of making minimum payments on everything and then using last bit of credit to get by towards the end of the month

Hopelessly_Hopeful

harrys_dad wrote: »

From your signature it appears you are paying your debts off in 2013 at the rate of nearly £1000 per month, with a DFD of August 2015. Just keep going and in a little over two years you will have nearly a £1000 a month SPARE CASH to do with what you want. Just continue as you are and keep knocking the months off, it will be worth it.

But to clear in 27 months there would need to be a monthly payment of £1898 and that makes an assumption interest rate is zero.

HHx

Suseka

Hopelessly_Hopeful wrote: »

With respect; I know many people on DMPs and none of them have given up full responsibility for their debt! The intention is to pay back 100% of the debt owed, they are just asking to be allowed access to reasonable interest rates in exchange for giving up credit facility and having their credit rating trashed

HHx

I'm with HH on this - I've not given up responsibility for my debts, far from it - I'm taking responsibility and dealing with the situation. I have no choice but to go the DMP route, because my OH's debts have substantially increased due to loss of earnings and we are no longer able to meet minimum payments. I don't feel guilty about that - but proud to have raised my head out of the sand (or moreso my OH's head) and aim to have cleared my debts (if I'm successful in getting interest frozen) in just over 4 years.

To achieve that our living costs will be minimal and all luxuries gone, am unlikely to have any holidays (bar staycations) and will have to find creative ways to give gifts for friends and family for birthdays and christmas etc. All these things I find acceptable, because I created my debts - and I'll pay for them.

If you feel you can manage with your current payments, pay all your debts and still have a reasonable standard of living - then continue. But if, as others have said, you are struggling to meet minimum payments or using credit cards for basic household expenses - then perhaps you should speak to one of the free debt charities and see what your options are.

Good luck with whatever you do.

Time_to_face_the_music

Another one with HH and Suseka on this.

I don't know where the idea comes from that a DMP is about not taking full responsibility for your debts. Or a DMP meaning that you can provide a vast reduction in the debt owed.

People may want to call me a mug but we have spent every penny we owe and we will pay every penny back. Paying the interest is another matter .....

Newyorkdreams

Thanks for the replies folks - really interesting perspectives here which I appreciate.

Sorry if I have offended, that was not the intention and probably not well phrased regarding taking responsibility.

NYD