DMP & Mutual Support Thread - Part 10

Puzzcat

Scaredofdebt wrote: »

HI, I am new to the forum and am just in the process of setting up a dmp with StepChange and have read this with interest. My hubby and I have £57000 worth of debt and I am scared to death. Need to start contacting our creditors but am dreading it - have you come up against too many problems and have they been ringing you lots? We have cards with MBNA, barclaycard, Halifax and Natwest.
xx

Hi and welcome,


Well done on getting started on the wonderful dmp journey. If you have some time I would suggest you make yourself a cuppa and pull up a chair and start reading thses threads. There is loads of information on here and answers to questions you didn't know you wanted to ask!


I did receive a few phone calls at the beginning but just quoted my sc referance number, I didn't have any nasty callers.. all will be fine.


Puzz.x

Karen777

Hi all new folk. Well done on getting this far. I wrote to all my creditors and told them I was working with Payplan and that they would hear from them in due course. I then did not answer my phone unless I knew it was a friend. I got letters back from all of them mostly standard I think. Some said they would do nothing until hearing from Payplan some clearly ignoring the fact that I was setting up a dmp. But it was all fine. If you want to speak to them do so but I didn't want to, so I dealt with them all in writing. It helped me to get a big book and write down all the account details for each creditor and contact details then I felt more organised. Good luck all of you, it does get easier!

Puzzcat

james_joyce wrote: »

Hi All

So I had my LBM after Xmas, realised I needed a DMP.

I went online and filled in some initial info on the StepChange website. That gave me a useful guide for my monthly budget, max amounts for each category etc.

Then I drew up a list of all my creditors, pro-rata'd the amounts I could pay each month, and put these figures and my income and expenses into a SOA based on templates I saw online.

Finally I sent the SOA to all my creditors - with an accompanying letter, again based on online templates.

Have I made a terrible mistake? Should I try to pay the full minimum payments this time, take time out and speak to a charity like StepChange? Or just go ahead with my calculated pro rota payments this month and see what happens? I'm worried my payments are too low, they would take 25 years to pay off in full! But then again people do these £1 a month nominal payments don't they? Are they always arranged via third parties like StepChange rather than bumbling freelancers like me?

Many thanks
James

james_joyce wrote: »

Can I just ask a quick question? My wife and I are in the process of moving current accounts, from a bank with which I have a credit card debt. Our current account balance is zero but the next child benefit payment might still go into it. Can the bank seize that money towards my credit debt before my wife has chance to transfer the money into her new account? She has no debts at all. The child benefit is her money and I've just got this wonderful image of our suing the bank and getting a CCJ against them.

Hi and welcome,


Many people do a self managed dmp which is what you have started and I'm sure they will pop on during the day and enlighten you. I am with stepchange and have found them aboslutely fantastic. I have no idea if they have more clout than doing it yourself but I've had minimal hassle and all bar one of my debts are frozen on 0%, which at the end of the day is what we are after.


With regards to your payment going into the bank, as its a joint account your wife will be assumed to be included in the dmp and subsequently any money in that account could be used to offset the debt. However you say you don't have a debt on this account just a credit card and I don't think the banks are that quick at making the connection. I would strongly advise you remove any money as soon as it lands to avoid it being taken.


The bank may also close this account when they receive your letters so you need to get your dd's sorted quickly.


The general rule of thumb for set up is..


Open a new bank account away from debts
Change any income/payments to go into the new account.
Change your priority dd's to your new account don't use a switching service or all your debt dd's will come with you.
Write and inform creditors of your situation and send token payments for every missed 28 day period.


Most of us start with a gentle run in to build up an emergency fund that is where the nominal £1 payments come into play.


As for ccj's etc, impossible to answer. There has been the occasional mention of them, but as long as you are offering the amount of money you can realistically afford.. you can only pay what you have at the end of the day. The important thing is you are keeping in touch with them, offering a payment plan and not using any more credit.


Your credit rating and your wife's if you are financially associated which you will be if you hold a joint account, will be hit with defaults and arrangements to pay etc but that is the price we pay for not paying our minimum contractural payments. For us dmp'ers on here we don't want any more credit other than mortgages of course.


Please don't panic, do come back as ask any questions you may have and do please try and read back these threads as so much information is available.


Good Luck
Puzz. x

Sazzie23

Morning all a repeat of a post I made recently and some found helpful.

Newbie message [/COLOR]

I know there is a lot of activity on the thread at the moment, many newbies who are posting, and quite a few lurkers at a guess (that's ok, we don't mind, one day you'll feel up to posting and smile about how worried you were).

I agree with what's been posted already by the regulars, and I think all the queries have been answered.

So general Newbie Advice, setting up and starting out is probably to most difficult time you will face in your DMP, so don't panic if it all seems scary and too much . Facing up to the fact you can no longer pay your debts is a massive step and very confronting for many people, this is life changing stuff so worrying is absolutely normal.

Now you've done the horrid thing of adding it all up (often a shock) you've worked out (with SC or whoever) how much you can pay back, that's the crucial bit done, just a matter of getting the paperwork sorted.

Despite SC being the largest debt charity, some call centre people know nothing about them, that's ok, they are just ignorant, don't let it worry you.
All debt collection sections know about SC, some are better equipped to deal with it than others. Often the people at the front end that you speak to know nothing about how the system works, remember you do, you are better equipped than them, don't let them scare you.

It doesn't matter if you choose to DIY DMP or SC, the plan is the same, you are paying them what you can afford and they can't have anything else. They 'reject' the plan, tough luck, keep paying it just the same, they'll get with the programme at some point.

Some creditors will let you know they have accepted, some will just accept it and show something on the statement, some will not say anything but just stop or reduce your interest, HBOS and BC will probably still charge you interest in some form, don't panic over it, it extends your DFD but there are things you can do, start on page 1 of the thread when you have a spare few hours and then decide what to do.

Overtime and non regular bonus payments, no you don't have to declare these, and you can choose to save them to your emergency fund, make some extra repayments to reduce your DFD, save up for F&f payments when you get enough, or even....shhhh ...spend them on a little treat but don't tell anyone. Most people go for a combination of the above, all depends on your priorities.

When you start out and your DFD is generally 4-10 years away, you think, I want to pay as much as I can straight away so the creditors think I'm doing my best. Actually I don't think they care much, as long as you keep in touch and keep paying what you agree - so don't cut your budget so fine that you are having 4 years of hell instead of 6 years in moderate comfort. I'm not saying do your shopping at M&S, and have 4 holidays a year, but just leave yourself the option of buying a cake at birthday time, a new pair of shoes for DD and maybe a very cheap caravan break once a year.

Default letters are good, they look scary but they mean the creditor is actually looking at what you pay and putting your account into limbo. If your account goes to a DcA this is usually good and they are mainly not the scary people you see on the Tv, they have all been very reasonable, and just want you to keep in touch and keep paying.

There will be wobble times, if you have to reduce a payment, when a creditor starts grumbling or just because DFD seems a long way off, but we've all done it, you come here log on and we'll all get throu it together.

If you are having trouble with creditors, eg Lloyds troubles BDF, when they shift to a DcA I'd continue to pay, the payments seem to get to where they should eventually, but if you are worried, send a recorded delivery letter to the collections team at the creditor, quoting your account number and SC ref and saying this is what is happening, these are the payments that have been made, please make your sure your accounts are up to date and let ask them to reply to you in writing so you have confirmation. It does take several months for an account to get over from creditor to DcA and often the information is limited but it's just like the original set up and the DcA will let you know to change the payments in SC, and you can just log in and do it.

I hope this helps, there are lots of scenarios I haven't covered, but in the main it's grit your teeth, keep plodding through and it will all settle down.

One day soon, you will be able to say like Ellie and many others I will be debt free next year

Sazzie23

james_joyce wrote: »

Can I just ask a quick question? My wife and I are in the process of moving current accounts, from a bank with which I have a credit card debt. Our current account balance is zero but the next child benefit payment might still go into it. Can the bank seize that money towards my credit debt before my wife has chance to transfer the money into her new account? She has no debts at all. The child benefit is her money and I've just got this wonderful image of our suing the bank and getting a CCJ against them.

Just a quick point, although I have a joint back account OD on DMP, my OH was not included on the DMP and his credit has only been very mildly affected in that he has to answer questions but seems to still be able to get credit. I think sometimes it's assumed because you have joint debt you both have to go to DMP, that is not the case.

lucy_w86

Hi.... A nervous hello....

I have just spoken to Step Change and have a summary of my plan and just need to send my application back to them.

Are there any other actions I should take as I am going to default on a few paymnets to creditors this month as I cant afford my rent?

Thanks

Puzzcat

lucy_w86 wrote: »

Hi.... A nervous hello....

I have just spoken to Step Change and have a summary of my plan and just need to send my application back to them.

Are there any other actions I should take as I am going to default on a few paymnets to creditors this month as I cant afford my rent?

Thanks

Hi Lucy and welcome,


Have you got a safe bank account ready? That is an account for your income to go into that you have no debt with, so no overdraft, loans or credit cards..


If you haven't then you don't want stepchange to make any contact with your current bank until this is sorted. Will you be writing to your creditors and doing token payments to build up an emergency fund or do you already have one in place?


Puzz.x

Puzzcat

Sazzie23 wrote: »

Just a quick point, although I have a joint back account OD on DMP, my OH was not included on the DMP and his credit has only been very mildly affected in that he has to answer questions but seems to still be able to get credit. I think sometimes it's assumed because you have joint debt you both have to go to DMP, that is not the case.

Good to know sazzie that your OH is still able to get credit as my OH also isn't in my dmp but we are financial associated by our mortgage but no other accounts.
James mentioned his wife's child benefit going into their joint account and I think the bank would take this as joint money not his or hers. Of course I could be wrong but would err on the side of caution personally.


Puzz.x

lucy_w86

Puzzcat wrote: »

Hi Lucy and welcome,


Have you got a safe bank account ready? That is an account for your income to go into that you have no debt with, so no overdraft, loans or credit cards..


If you haven't then you don't want stepchange to make any contact with your current bank until this is sorted. Will you be writing to your creditors and doing token payments to build up an emergency fund or do you already have one in place?


Puzz.x

I have contacted the bank to book an appointment to open an account to do all this.

Emergency fund?

Also, I see the calculations are based on a calendar month which is 52 weeks in a year divided by 12. Some months have only 4 weeks in which means the income will be less for that month. How do people overcome this?

Puzzcat

lucy_w86 wrote: »

I have contacted the bank to book an appointment to open an account to do all this.

Emergency fund?

Also, I see the calculations are based on a calendar month which is 52 weeks in a year divided by 12. Some months have only 4 weeks in which means the income will be less for that month. How do people overcome this?

You can open bank accounts online, don't forget it is just a basic bank account you need and one with a bank that you have no debts with.


Income.. well I get paid monthly so I imagine you add up the total you get for the year and then divide by 12? That woud give you a monthly income.


Once you are in a dmp you have no access to credit so having some money put by for all those emergencies that happen ie; car repairs, white goods breakdown, vet bills etc.. obviously you may not have a car, new white goods with warrenty and no pets but all those emergencies that happened before and went on a credit card for example may happen again. Most of us pay token payments for a few months to the creditors and save what we would have normally paid them to get a fund in place.


Do try and find some time to read back from the beginning of this thread as there is lots of information and answers to many questions.


Puzz.x