Going for a DMP (I think), advice appreciated

lilypie

Hi, am pretty sure due to forum etiquette that DMP providers can't be recommended, so that isn't what I'm asking for! However, just thinking out loud really and appreciate any useful advice. I have contacted two charities, Stepchange and Payplan. I am currently separating from my husband and have £48k of debt (HATE PUTTING THAT IN WRITING!!) all in my name. I feel we're both responsible but hey, I need to crack on with my life and sort the mess by whatever means possible. We have sold our house and used the equity and now rent, but it just wasn't anywhere near enough to get us out of this mess.

Stepchange have recommended bankruptcy but I just don't feel this is an option due to my job. Difficult to explain without making myself recognised but I could be in line for a windfall of around £20k in a couple of years time (not an inheritance, not hoping someone will die!). Payplan have recommended an IVA but due to potential windfall and messy financial arrangements for the next couple of months whilst husband and I separate and find places to rent each, I just don't think I'm in the right place physically, emotionally or am organised enough right now with everything going on to go through the IVA process.

I think therefore till my head is straight and my living/financial arrangements with husband are clearer a DMP seems like the right thing to do? I know I could contact creditors myself but I am now working full time and have young children to look after, I just don't think I could cope with it all. Do you think this seems like a sensible plan? Should I contact a few more providers? Or go with Payplan as they have all my info now? They did say they would attempt one for me and that it could be an option, but were quick to point out the negatives compared to an IVA. I just think things are too messy and unclear at the moment for an IVA. My bank statements for the next couple of months won't reflect my longer term financial arrangements. I am thinking is this less of a problem for a DMP than an IVA?

Sorry if this is unclear, bit like my head at the mo but I am getting there and determined not to be permanently stressed by having no money each month due to the huge of amounts of interest I am paying with no debt reduction! I need a plan of some sort!! Thanks for reading and any advice gratefully received.

lilypie

Sorry, another question... If I try and get a DMP, should I go get myself a new bank account ready? Or is that only the case with an IVA? I am overdrawn constantly with my current account. Does anybody know who Natwest or Nationwide are affiliated to? I don't think any of my debts are linked to them but I'm not knowledgeable to be sure. Thank you.

cc4rhu

Hi and welcome,

I can only talk from my experience but this is what I did /would do.
Contact payplan or stepchange and say you want to go on a DMP and be firm. My plan started at £45 PCM on a debt of £50k lasting over 80 years. I was advised IVA etc but wasn't interested. I knew I could improve my situation on the DMP.
Get a new bank account. For a basic one I love Natwest because the bank card can be used online and in other shops / cash machines etc. Lloyds is poor because the card will only work on their ATMs.
Make sure your wages and DDs etc go into your new bank account.
Write to all of your creditors explaining you're going on a DMP and give them each £1 as a token payment. Explain that you're busy working out your finances and you're going to make a pro rota offer asap.
The carnage will begin, letters, phone calls etc. do not speak to them on the phone. Politely ask them to write to you and to stop ringing. If it continues explain you will report them for harassment.
Don't worry too much about the threatening letters. Once Stepchange or Payplan get set up they recognise you're doing your best and are trying to pay your debts.
Any further problems the. Post here.
In my case things settled down very quickly (6 weeks ish) other than the odd phone call.

cc4rhu

Oh and do NOT go with a fee paying DMP company. Use payplan or stepchange only.

matttye

cc4rhu wrote: »

Oh and do NOT go with a fee paying DMP company. Use payplan or stepchange only.

Or Christians against Poverty or CAB (they do self-managed DMP assistance).

Chrisblue1962

Hi Lilypie

Firstly, Well Done on summing up the courage to face up to your financial dilemma. It's not nice having to but it is a very important first step.

It may be helpful if you could post a SoA - Statement of Affairs - which is basically a breakdown of all income and all expenditure, showing how much you can realistically pay towards your debts each month.

Also, you need to determine if the debts owed are solely yours or was some of the debt incurred joint with your husband as he would then be jointly liable for paying this debt.

Good Luck. Hope this helps.

Growurown

Hi lilypie
I have no experience to say whether bankruptcy, IVA or DMP is the right route for you, but I have been on a DMP with Step Change and have found it to be a real lifesaver. As previous posters have said go with a free service. Yes get a new bank account for a DMP if you have debts with your bank that will need to go on the DMP. We had two overdrafts and credit cards with our bank all gone onto the plan now.

You can check which banks are linked here.

http://www.moneysavingexpert.com/savings/safe-savings#whatcounts

fatbelly

DMP is the way forward. And I would recommend Payplan or Stepchange.

When you get the lump sum, you can use it (maybe not all of it) to clear your debts by full & final settlement.

You're in rented accommodation so there's less likelihood of court action, and also less reason to do an IVA.

New bank account? - yes, not connected to anyone you have debts with.

lilypie

Brilliant advice, really helping in clarifying my thoughts. Thank you so much

eyeopener2

Stepchange were a lifesaver for me. This month will be my last payment so there is light at the end of every tunnel.

[Deleted User]

I still wouldn't rule out bankruptcy: you will be discharged after a year so the expected windfall will not be affected.