DMP or not to DMP

hawkinsa21

Hi all,

has anyone on here been on a DMP and it made their life much easier? I've been reading up on them and have had mixed feelings expressed. My wife and I have four young children, 7 and under. We have in absolute total debt just shy of 40k. We can make the minimum payments but only just, and we don't see a way out of it. Its impacting us emotionally as much as financially, and the last thing I want is for anything to spill over into my children's lives. We want the best for them and that doesn't mean buying them shiny things, I'm talking about giving them the best quality of life we can, and make sure that they are protected from things they should be protected from (not seeing mummy and daddy in a stress about money). Life is too short.

I filled out an online DMP application (charity), and the result said we should do it. I was concerned about 6 years bad debt rating although to be fair the debt we currently have won't be going anywhere soon without help.

Just a bit of background. We keep a spread sheet, we have a minimum budget for food, we have the best fuel deal, we have budget broadband and phone, we don't have sky, we don't have spending money, we don't have monthly subscriptions, we don't spend on our cards any more (cut up) and two of the four store cards we have we've setup 6 month repayment plans to lower the cost.

Question is, do I speak with all our creditors separately and discuss repayment plans myself? Or with the debt I have and only making minimum payments, should I seriously consider a DMP?

We also cannot afford house or life insurance, and don't have boiler cover. I need to do something.

Thanks for listening.

Alex


EDIT: I should add that in about 1 year to 18 months, we should have the catalogs and a property maintenance bill paid off, which will claw back enough money to start overpaying on some of our credit cards. Fairly important thing I missed off there.

Growurown

I can only speak from personal experience but going on a DMP really made our lives a lot easier. We now have enough money to pay for food and petrol, and I don't come out in a cold sweat every time I use my debit card because I know the money is there. We have enough money for treats but not the big stuff like holidays. I'm not worried about our credit rating, I never want credit again. We can afford life assurance and things like that too. It's all accounted for when you set up your income and expenditure sheets.

You could pay an awful lot of interest on your debts over the next 18 months (if you are only making minimum payments), until you can start overpaying. If you go on a DMP there is every chance that interest will be frozen although it can never be guaranteed. I think it very much depends on how important your credit rating is to you.

chillpill

I'm on a DMP (and will be until 2018!). I started it in Nov 12 on £41k of Debt (currently £33k). My opinion? starting a DMP was a great decision on my part. Only one regret, I should have started it years ago!!! I'd recommend a DMP to anyone struggling to make end meet. I too was just able make minimum payments before taking out my DMP, but doing so left me with little left to spend on 'normal' living costs. I too was scared of defaults showing on my credit file for 6 years. However, I was just as scared to open the credit card statements each month. Look at it this way, if you carry on struggling to make minimum payments for the next 6 years you'll probably still have just as much debt (if not more!) at the end of it, plus you'll have wasted 6 years by just treading water. At least this way you'll be able to see your Debts getting smaller!!! Do a DMP, get control back into your finances, you won't regret it..........

hawkinsa21

First and foremost, thank you. That is some really encouraging advice

I had considered the whole interest thing, and not being in a better position in 6 years time and now I think I was on the right track. Getting control is paramount for us - every year we've talked ourselves into believing that change was just around the corner, however it hasn't been; it just got worse.

Step Change seems to be the place to go. I will give them a call tomorrow evening after work.

Thanks

Alex

Baked_Beans_Babe.

Hi Alex:rotfl:
Being on a DMP had been the best thing myself and my OH have done. We have been with Step Change since January. We have 3 small children and about the same amount of debt as you. Our plan should last 10 years, however when I did the income/expenditure with SC I inherited pets, my husband started smoking and we took the maximum food allowance for our family,and clothing allowance, my husband also had to buy a bus pass to work. You probably get my meaning, when I say there is a lot of wiggle room to get some extra savings together when on a DMP so at in maybe a 4-5 years I can start to make some full and final settlements and get rid of the debts quicker. If you let the SC advisor do the budget with you let them state what the maximum allowance is and then you should be able to get together some more extra savings. Also make sure that you add in any car costs and maintenance for house and car so then there are no more worries if things do crop up as they do from time to time.
My OH and I were nearly at breaking point before we got in touch with SC. it has really taken the stress out of ours lives by being on a DMP.
I would advised anyone who finds themselves trapped in the minimum payments to o a DMP. Yeah your credit rating will be none existent. But then again I hope I never need credit again. Good luck with what you decide Beans x

lizzy23

best thing we ever did, i too wish we'd done it years ago, it gave us our live back, as the person above i maxed out our allowances, it means with a bit of cutting back in other areas, we do manage to get away in the caravan for holidays, and in some respects we are better off than we have been for years, i worked it out that if we hadn't done it we would have probably taken our debts to the grave

sickasachip13

Hi,

Being on a DMP with StepChange (was CCCS when I started with them) and it was a life saver. We have halved our debt now as all the % was stopped so we were actually able to cut our debt, which made a big change.

Ages ago I wrote an article for Stepchange about my situation; it can be found here: http://moneyaware.co.uk/2011/09/my-debt-hell/ and, if you have time, you should sit down and read the DMP Mutual Support Thread here on the forum.

All the best

SAAC

toneeb

I've been with CCCS / Stepchange since about May 2006 if i remember. I started off with around £34K debt, now down to about half that. My outgoings on credit cards and loans was around £900 per month and I was receiving a lot of phone calls from creditors.

the most stressful part I found was acutally sitting down all those years ago and working out what I actually owed. It can be a shock.

However, Stepchange / CCCS have been brilliant. I dont receive any phone calls from my creditors (well, received a few residual ones early days but once CCCS are involved, they stopped)

My advice, sit down with the other half (when the kids are in bed), get totals of all the debts and work out what you need to survive. It can be scary ringing Stepchange up initially but they are really friendly and you will feel a million times better.

Remember, you do have a review every year but unless you get a massive payrise, it wont be much different.

Bit of advice, ring them early in the morning. They can get incredibly busy and it can be stressful being on hold when you going to be discussing debt.

As I say, my outgoings were £900 a month. I'm currently paying around £120 now so at least myself and my family can have a bit of a life now.

Go for it and good luck

hawkinsa21

Just wow. Thanks ever so much guys and gals. Thats a big confidence boost. Much appreciated

I will ring them once I've sat down and gone through it properly with my wife. We are at that breaking point so the sooner we do this the better

Invaluable help from MSE forum, thanks a bucket load

Alex

gettingout

CCCS/Stepchange are amazing. Going with them for a DMP was a life saver for us. It made a huge difference having the interest frozen and means that there is an end in sight (ie. we are paying off a fixed amount and not having interest added all the time, so every payment we make is reducing our debt). They are so helpful and understanding as well and don't judge people for getting into tricky situations financially.