How exactly will circumstances improve?

mikee31

Hi All,

I am about to start a DMP with Stepchange. When I was preparing the Debt Remedy I noticed the following;

Based on your current surplus income of £xxx per month, it will take you x years and x months to become debt free (assuming interest is frozen*). This may seem a long time, but in reality most people’s circumstances improve. If your situation does change you can contact us to amend your monthly payment to get debt free quicker.

My question is how do they expect things are likely to improve for most people?

Ok, so you may get the odd pay rise at work, or be able to reduce your bills here and there, but we all know that generally living costs have of late increased more than any average increases in pay.

Further, with a set payment to creditors as part of a DMP its not as if there will be a 'snowball' effect whereby once one creditor is paid off you can focus your finances towards another.

So how exactly will things improve to the extent where timescales for paying off debt will significantly reduce?

Perhaps I'm looking in to this with too much scepticism, although I haven't got much choice in not entering into a DMP, given the circumstances I find myself in!

whitewing

People feel more confident and less anxious when they have a plan in place, and then get more creative with balancing budgets. They may also feel more commitment to busting the debt when they are not ignoring it. Even simple things like not racking up more debt helps overall.

Fewer misery 'splurges' because a bit more debt won't make a difference....

Tixy

I think they mean things such as families having significant changes such as they may have young children and paying loads in childcare and then the kids go to school, or be living on 1 income until the children go to school or they may have teens who then become independant, or someone may live alone but then decide to live with someone.

Or people sometimes get better paid jobs, or significant promotions/ additional qualifications etc.

It may be that none of these will be likely to apply to you, but for many people over a long DMP of say over 8years some change in circumstances is fairly common.

worriedwilf

Hi Mike

For me it would mean the end of childcare costs or an annual payrise etc.

I totally agree what Whitewing said about feeling more confident when there is a plan in place. For me, the stress was not quite knowing how to tackle it. Now that I am dealing with it I feel so much better.

Wishing you the best

Larac

I think you have to think about it, that you are chipping away at the debt, especially if you are in it for the long haul and see what changes take place in your budgets due to the various changes that occur in life over time. Even very small pay rises, do take a few months off the DFD. Its worth looking at this boards and seeing how you can increase your income and how you can make savings in every day life to assist in your budgets and to save costs.

mikee31

Thanks all for the responses. I suppose I'm just being pessimistic about things at the moment. Hopefully entering into a DMP will as you say make me happier and more confident about tackling my debt. At the moment it seems like I'm staring up at Mt Everest and thinking its just not achievable i.e. too big and will take forever. Small steps and all that though eh?