DMP & Mutual Support Thread - Part 10

Scaredofdebt_2

Morning everyone, so last night I opened a new bank account with Nationwide but it is going to take maybe about 3 weeks to sort and now I am panicking that we will not be able to switch everything before my current bank finds out. Woke up at 5:30 with that overwhelming feeling of dread. I am really trying to be positive and see all of this as a journey to be debt free but at the moment I am struggling to get past the enormity of how much we owe and how long it will take us to pay it back. Is life with a dmp anymore difficult than a life trying and failing to manage debt?? Sorry everyone for bringing the tone down. Struggling to be positive.xx

Ellieseleven

Morning Scaredofdebt,

The start of the DMP and getting everything switched over to your new bank accounts is, I found the scariest bit and trying to make sure you have timed everything right can be stressful.

You have applied for your bank account (we went with the Co-op and it took just over a week, so you may find that everything's set up before the 3 weeks). I timed my changeover at the beginning of a month so that I had a few weeks to get myself organised and the transition from one account to another worked. I know others who have simply withdrawn any money in their old account in that interim period so that the bank doesn't take it.

It is a huge step that you have taken and the enormity definately does hit you in the early days and weeks but this will settle down quite quickly. I found that keeping a diary helped me (and still does). This is my place to offload my fears and worries, I look back now to the beginning and yes, it was scary but I am so glad that I went down the DMP Route and I am sure that you will too.

Originally, our DMP was for over 11 years with just short of £46k of debt but we have shaved off almost five years from that and we will be debt-free early 2017 (although I am aiming for 2016).

Keep going and keep posting, we are all here together for help and advice.

Take care
Ellie xx

Scaredofdebt_2

Thanks Ellie, that is reassuring to know. Do you find things incredibly hard paying the dmp? I dont expect to live in luxury but want to know we can survive with the occasional treat.. We are both planning to do overtime and put as much money as we can towards the dmp but we have 2 small boys and they still need a life. When we first thought about what we were going to do we decided to look in to taking a second mortgage over 15 years, this wasn't feasible in the end, so think I need to look at it like that but it is the uncertainty of what the banks might do and debt collection agencies. Think I am overthinking and need a good kick and get on with it. Thanks for the support xx

Time_to_face_the_music

Scaredofdebt wrote: »

Morning everyone, so last night I opened a new bank account with Nationwide but it is going to take maybe about 3 weeks to sort and now I am panicking that we will not be able to switch everything before my current bank finds out. Woke up at 5:30 with that overwhelming feeling of dread. I am really trying to be positive and see all of this as a journey to be debt free but at the moment I am struggling to get past the enormity of how much we owe and how long it will take us to pay it back. Is life with a dmp anymore difficult than a life trying and failing to manage debt?? Sorry everyone for bringing the tone down. Struggling to be positive.xx

Scaredofdebt wrote: »

Thanks Ellie, that is reassuring to know. Do you find things incredibly hard paying the dmp? I dont expect to live in luxury but want to know we can survive with the occasional treat.. We are both planning to do overtime and put as much money as we can towards the dmp but we have 2 small boys and they still need a life. When we first thought about what we were going to do we decided to look in to taking a second mortgage over 15 years, this wasn't feasible in the end, so think I need to look at it like that but it is the uncertainty of what the banks might do and debt collection agencies. Think I am overthinking and need a good kick and get on with it. Thanks for the support xx

Hi Scaredofdebt :hello:

You can ask Stepchange to hold back on sending anything to your existing bank until your new account is set up. They will continue with payments to other debts in the meantime.

Your DMP budget should actually make life easier for you. If it doesn't look like that, you really need to reconsider the budget and make some adjustments. We are all here because we couldn't make the minimum payments to our debts and afford to live. Entering a DMP means that those minimum payments are reduced into a manageable payment which allows money for essential living, then you adjust your budget to allow the occasional treats that keep us all going. Look at the categories and apply a little fiddle factor or two. Just ask if you need help with this but typical things are people adding a pet, saying they smoke when they don't or adding meals they eat at work.

The start of a DMP is a real emotional rollercoaster, you are in that stage and you are not bringing anything down, you are seeking the support that you need. Ask anything you need or just talk when you want to. We will hold your hand and get you there.

TTFTM x

Time_to_face_the_music

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

Hi James :hello:

You don't sound like a bumbling freelancer and you are self managing your DMP. I wish I had known we could from the start but we got there in the end. I do believe that 25 years is too long for a DMP, is there a reason why you can't consider a IVA or bankruptcy?

If you want to check your budgets or need any more information on self managing your DMP, please check out the Citizens Advice Bureau's excellent online DMP tool, this is what I used when we moved to self managed:

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

TTFTM x

james_joyce

Morning all,

Can I just offer a couple of random thoughts, not directly about the financial side of DMP itself? Apologies if these have been covered at length before - I haven't read through all the threads yet (my homework for the weekend!).

The first thing is, can I encourage everyone while they're on DMP, to think about their own earning capacity and how they can build it up for the future? I know in my case that one of the causes of my debt was low earnings. There are various reasons for this, but I'm trying to address one of them, which in my case is a lack of qualifications other than my academic ones (degree etc).

I am now working towards professional qualifications, estimated total cost around £2000 plus of course a lot of work in my own time. Obviously for other people there are any number of equivalents - e.g. if you could set up a business with a skill you have, how about using the DMP period to start putting a business plan together? And obviously anyone whose employer will pay for any career-boosting training, should grab it with open arms! Another factor is health and well being - I am planning to start meditation and/or yoga. All of this should hopefully make my future look rather different from my past.

The other things is, I asked a friend who is on DMP, what his post-DMP budget looks like, how much spare money he will have etc. I don't think he's really starting to plan that, which is obviously a recipe for future disaster if we're not careful.

Sorry to stray slightly off-topic...

Regards
James

james_joyce

Sorry miles away there, thanks a lot TTFTM!

blisteringblue

Another tip to all newbies, when doing your Stepchange plan claim for everything you can get away with, ie claim you smoke even if you don't. They have guidelines about what is "fair" and take the lot. I think you can have £25 for pay TV etc etc.

There really is no point nailing your budget to the bone just because you think your creditors might appreciate it. Seriously, leave yourself as much "wiggle room" as you can.

Your credit rating is knackered now anyway, you are paying them back, but make your life a little easier while you do it.

charmed1318

Hi James,

I am doing a self DMP, didn't even know I was until i started coming on here . It has been about a year since finally getting all my DCAs sorted and the only contact I have is about every 6/12 months where they will write to you (I don't do anything over the phone, and if they ask for a phone number I say I don't have one at the time) and ask for an updated Income and Expenditure statement.

I keep envelopes for all the individual debts with the original company then who it has been transferred to, ref number and then put in all correspondence from them, and I keep a spreadsheet with amounts owed at the start of each year, and each month update it when the standing order has been paid and how much it is standing currently, so I know if I come into some money which one I may be able to pay off or make a f+f offer to.

I have recently wrote to them and asked what figure is currently owed to them, so I can check against my own records (they are all with DCAs so no interest is now being applied). Some haven't got back to me, but I have also the £2 reports from the credit agencies and as they are updated monthly my figures match some of those so I am not worried.

Well done for taking the step and good luck for journey ahead. :)

Ellieseleven

Scaredofdebt wrote: »

Thanks Ellie, that is reassuring to know. Do you find things incredibly hard paying the dmp? I dont expect to live in luxury but want to know we can survive with the occasional treat.. We are both planning to do overtime and put as much money as we can towards the dmp but we have 2 small boys and they still need a life. When we first thought about what we were going to do we decided to look in to taking a second mortgage over 15 years, this wasn't feasible in the end, so think I need to look at it like that but it is the uncertainty of what the banks might do and debt collection agencies. Think I am overthinking and need a good kick and get on with it. Thanks for the support xx

I think that TTFTM has answered your query but you're right you do need a treat now and then especially when you are in this for the long haul. As TTFTM says a bit of fiddle factor on your budget can help to give you a bit of wiggle room.

Try to make sure that your budget is realistic and covers everything, that, and stashing some money away into an emergency fund is a must as you need to remember that you won't have access to credit and need to be able to pay for unexpected emergencies.

I started my DMP straightaway so didn't have a great amount in my emergency fund and in hindsight might have sent token payments for a couple of months to allow me to build up a better fund.

We live a simple lifestyle at the moment but we do allow ourselves the odd treat;)


Ellie xx