Looking into DMP but need advice

KrazyKel

Hi
I have a few credit cards, all currently on 0% interest, not sure when the 0% ends but im worried that once these 0% ends I will be unable to get any more offers and will struggle to keep up with payments with high interest rates

(I applied for another 0% recently to balance transfer when one ended but was declined for most) - I dont spend on any cards, dont even keep the cards, just used for balance transfers

Also have a overdraft of £3k which is maxed out and im struggling to bring it down at the moment - plus costs with interest

Someone recommended DMP?
But not sure if im eligible as i can currently manage min payments while on 0% and have no defaults/ccjs or anything its just my debts aren't going down and the interest from my HSBC overdraft

Is it worth opening a new basic bank account just incase as ive heard that overdrafts can be called in anytime?
Or is there any way to stop interest/charges?

Thanks

-taff

0% means you should't be paying interest on it, so why aren't the debts going down?

You need to sort out your budget so what are your outgoings, and income?
You could post an SOA, it might help.

KrazyKel

Thanks, Well they are going down slowly but with Min payments of around £25/month on a £2k card its not going down much and 0% offers wont last long

I had a benefit overpayment of £1500 too which hasnt helped so my housing/council tax benefit were reduced to cover the overpayment, the overpayment is going down, but really just been using my overdraft more to cover the shortfall in my usual spends
Will do a SOA too!
Thanks

Powered_By_Pies

A DMP helps to reduce monthly outgoings although it will stretch repayments out further because of it. With the sound of the debts you have, it might be a bit of a slog, but it helps you budget more wisely too.

Don't apply for any more credit - if you've been declined on applications then your credit rating is below a lenders' accepted limit and that means you'll only be able to get high-interest cards which will be no good. Multiple applications at the same time can also have an effect. It might be best to check your credit score to see what the state of play is with it. Noddle is free, Experian had a bit more detail but is a paid-for service. I can't comment on Equifax or Call credit as I've never used them.

Might be best to talk to one of the debt charities when they open back up on Tuesday, step change or national debt line should be able to help.

Depth_Charge

KrazyKel wrote: »

Hi
I have a few credit cards, all currently on 0% interest, not sure when the 0% ends but im worried that once these 0% ends I will be unable to get any more offers and will struggle to keep up with payments with high interest rates

(I applied for another 0% recently to balance transfer when one ended but was declined for most) - I dont spend on any cards, dont even keep the cards, just used for balance transfers

Also have a overdraft of £3k which is maxed out and im struggling to bring it down at the moment - plus costs with interest

Someone recommended DMP?
But not sure if im eligible as i can currently manage min payments while on 0% and have no defaults/ccjs or anything its just my debts aren't going down and the interest from my HSBC overdraft

Is it worth opening a new basic bank account just incase as ive heard that overdrafts can be called in anytime?
Or is there any way to stop interest/charges?

Thanks

Hi

Just following on from others

Useful Citizens Advice information guide below on DMPs

https://nedcab.cabmoney.org.uk/remedy_4.asp

Like other have said maybe put up your SOA

Always take full advice on your options and the implications of before deciding on anything

Best Wishes

DC

dancingfairy

It's a tough decision. You appear to be borderline as to whether to continue paying your debts down whilst they are at 0% or whether to do a dmp.
If a default and dmp is inevitable then the sooner you start the sooner things will be resolved. When you default then you will be stung with interest and charges for a short time at least until things settle down and your creditors accept (whether formally or not) your dmp.
I think really it depends on how much you can pay down whilst the debts are at 0% and how easy it will be to get further credit at 0%.
It sounds like you are getting further into debt thought with the interest and charges on the overdraft? In which case it might be worth just going for the dmp.
df

jaxsmar

DMP & Mutual Support Thread - Part 9 .... why not take a look it's on the front page it might give you a better insight of the other debt free wannabe's journeys and DMP questions..good luck

eyeopener2

You need to find out the end date of those 0%, pull a budget together and start preparing for DMP life if that's what you think will be inevitable. If you have 6 months, use that 6 months to get your house in order to start living frugally.

If you can start to live within your means now...get mobiles onto cheap tariffs, get rid of sky, usual stuff but important.

Post your soa, as taff says, and get working on your budget BEFORE that **** hits the fan. It will make life in dmp land easier, if that's where you end up of course.

Monkeyballs

Hi Kel,

Don't take this the wrong way when I ask (everything will be revealed on your SOA likely anyway) but are you panicking because you have run out of available credit sources?

If that's why you've started to look into a DMP then I'd suggest you have a look into your finances and do a bit more research on what a DMP is all about (everything you need is on either the cab site above or on Step Changes site).

I only ask because while a DMP is a great way to get your debt repayments down to a level suitable to your income but it will ruin your credit file... Also, if you're not looking to repay your debt and instead just want to lower your outgoings then it's not a good idea as you've not had that LBM which everyone on here goes on about

So please, I'm not having a go but please sort an SOA and look closely at your budget and any potential way to "up your income" before chosing a DMP for potentially the wrong reasons...

MB

Powered_By_Pies

As MB says, a DMP will have an adverse affect on your credit rating at first. I guess it's a case of risk assessing. I pulled the trigger on a DMP because my credit rating was abysmal already - consistent checks by PDL's as I rolled debt over to new loans month after month made it look a complete mess. I know it's going to get worse before it gets better, but seeing as it was listed as 'very poor' anyway, I took the view that I had nothing to lose.

KrazyKel

Thank you all for your replies!
I think I am panicking that once these 0% ends then ill be stuck more than I am now

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 430
Partners monthly income after tax....... 0
Benefits................................ 398
Other income............................ 330
Total monthly income.................... 1158

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 300
Management charge (leasehold property).. 0
Council tax............................. 58
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 0
Mobile phone............................ 27
TV Licence.............................. 12.12
Satellite/Cable TV...................... 47
Internet Services....................... 0
Groceries etc. ......................... 150
Clothing................................ 15
Petrol/diesel........................... 120
Road tax................................ 0
Car Insurance........................... 38
Car maintenance (including MOT)......... 15
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 0
Entertainment........................... 10
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 887.12


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 3500
Other assets............................ 0
Total Assets............................ 3500

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
MBNA...........................2263......25........0 (Credit Limit £4400)
Virgin.........................1959......25........0
Asda...........................2000......50........16.9
Overdraft......................4000......60........0
Nationwide.....................1200......25........0
Barclaycard....................1500......35........0 (Credit Limit £5k)
Total unsecured debts..........12922.....220.......-


Monthly Budget Summary
Total monthly income.................... 1,158
Expenses (including HP & secured debts). 887.12
Available for debt repayments........... 270.88
Monthly UNsecured debt repayments....... 220
Amount left after debt repayments....... 50.88

Personal Balance Sheet Summary
Total assets (things you own)........... 3,500
Total HP & Secured debt................. -0
Total Unsecured debt.................... -12,922
Net Assets.............................. -9,422

Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.


When I moved in almost 3 yrs ago I gave the council wage slips to work out my housing benefit, 2.5yrs later they did a review and said I owed them £1500 back as I earnt more than what was calculated - turned out the wage slip they used was on the low side and was using that over the past few years, I currently have around £500 left of the £1500 overpayment to pay back so housing benefit will increase again after this is all paid)
Rent: £300 (Was paying £250 but they have reduced my benefit to cover the £1500 overpayment so currently pay around £300 - Could ask the counil possibly look at paying the overpayment over a longer period?)

Income is Work, plus disability benefits + WTC
Want to increase my income but due to housing benefit they said for every extra £1 i earn now ill lose 85p in the £ in housing/ctax benefit and dont want to end up in the same situation next review having to pay back lots of overpayment

CTax - over 10 Months - Will ask to go over 12.

My main problem is that my Gas, Electric and Water - I pay on receipt of bill every 3 months - Gas/Electric and 6 Months water - Need to change providers for Gas/Electric as on SSE = Expensive!
Need to budget for these more and set up direct debit rather than using 'overdraft' to pay when the bill comes

Think i need to keep a spending diary see where all the extra is going and what I spend the 'gas/electric' money on over the months

Asda 0% ended a few months ago but have available credit on 0% (till July 15) to transfer to barclaycard which will save £30 a month interest