DMP & Mutual Support Thread - Part 10

KID77

We have also just sent our stuff off to stepchange hoping to be set up for july 1st, we are £47k in debt with similar creditors to yours so will be good to compare notes :-). We are only paying £210 per month as i have over estimated our outgoings to ensure we dont leave ourselves short and i want to try and save as well if i can. You are obviously paying alot more than us per month if your debt free date is in 4 years. Hope it all goes well :-)

phoenixx

Riorio wrote: »

Hi all

I'm new here....just this week I had my lightbulb moment where I realised my debts are way out of control. After checking my credit rating on equifax iseeim in excellent level BUT IM £50k in debt

So I've contacted stepchange after some google research and they have advised a DMP where hopefully I will be all paid off in four years time :T

So expect me to be asking a load of questions on here...feel free to nudge me if they have already been asked and I need to not be lazy and find where the answers are

My debts are owed to mbna, barclaycard, tesco credit card, tesco loan, Halifax credit and OD, first plus & GE loan. Hopefully thy will accept my DMP and it will be smoothing ride to paying of my own stupidity of debt!

Have a good Saturday :beer:

Welcome Riorio
You are absolutely in the right place for DMP advice. You will need to complete an Income and Expenditure form for sc to work out DMP payment for you. As an old hand at this, my two pieces of advice are:
1. Don't make your budget so tight it is unsustainable. Be realistic and perhaps post a SOA on here so people can offer their good advice. If you cut back too savagely in the early days it can set you up to fail.
2. Try to have a couple of months of token (£1) payments to creditors to build up a bit of an emergency fund. You will need it - an absolute essential.
Wish we'd done both of these. DMP is best thing we've done tbh.
Good luck and keep us posted on your progress.

phoenixx

KID77 wrote: »

We have also just sent our stuff off to stepchange hoping to be set up for july 1st, we are £47k in debt with similar creditors to yours so will be good to compare notes :-). We are only paying £210 per month as i have over estimated our outgoings to ensure we dont leave ourselves short and i want to try and save as well if i can. You are obviously paying alot more than us per month if your debt free date is in 4 years. Hope it all goes well :-)

Hi Kid77 - very wise to be conservative with the outgoings. Just think - in 4 years you will be debt free :j I have a list of things I will do when this day comes for us: not spend, spend, spend I hasten to add!
Good luck in your debt free journey.

Riorio

Sounds like we are all in together!

I completed my form already on step change which is being sent out....is it too late to change? I was pretty tight bidget but now thinking to maybe adjust it a little? They advised online my payments would be around £1025 per month for 4 years. I think I'd prefer slightly lower payment over 5 years maybe....

How do I make token £1 payments? Do step change set this up? Be great to start an emergency fund for "just in case" situations

Ta

blisteringblue

KID77 wrote: »

Blisteringblue: how long have u been on dmp with barclaycard? we have 2 credit cards with them plus loan and overdrafts. Now starting dmp from 1st july or august.
Thanks

Since around March last year. We are paying them too much and their inflexible system means they charge 12.9% interest on 2 cards. That would be £130 interest a month and we are only paying off just over £1000 on all our debts so had to do something about it.

The only way you can get rid of the interest is to pay them less money. It is the only way, however Stepchange will not do this because they have to treat all creditors fairly so it's an even split.

We've gone self managed for our DMP because of this and are now free to pay Barclaycard less so they will eventually default us and interest will then be frozen forever and we can get back to our regular payments without the crazy interest.

If you are just starting Stepchange are excellent, but stick to this thread and you will learn all the DMP trips and tips. It has been a lifesaver.

phoenixx

Riorio wrote: »

Sounds like we are all in together!

I completed my form already on step change which is being sent out....is it too late to change? I was pretty tight bidget but now thinking to maybe adjust it a little? They advised online my payments would be around £1025 per month for 4 years. I think I'd prefer slightly lower payment over 5 years maybe....

How do I make token £1 payments? Do step change set this up? Be great to start an emergency fund for "just in case" situations

Ta

Hi - you will need to manually send the £1 payments: Advise SC the date you want your DMP to start. They are usually good about this. After all - they want you to succeed. Write to each of your creditors telling them that you are in financial difficulty, are consulting with sc and that you will only be able to offer a token payment of £1. Request that they freeze interest and charges. January15 who posts on this thread quotes from the Lending Code - again, read through the thread - which is very powerful. Include a cheque or postal order for £1 with each letter. There is a template somewhere on this thread that you can customise. Otherwise, I have seen one on the NEDCAB website (a wonderful resource for those starting out on DMPS). We did 1 month of token payments but in hindsight should have done 2 or even 3 before starting DMP properly. We initially set our budget way too tight and had to adjust payment to creditors down which was tough as it is much easier to stay the same or go up with them.

Hope this helps.

KID77

Riorio - I should be paying about £800 per month to get rid of my debt in 5 years but I want them to default me so am hoping my £210 is low enough to do this but still show I am making an effort. Not sure if it will work. Hopefully be saving in the background, in 5 years time or sooner Incan have enough to offer them f&f settlements for 50% of debt ideally less.I just think my credit rating is trashed for next 6 years at least so I am not stretching myself or leaving myself short at this time, ive struggled for years paying this debt, I now want to have some breathing space. I wouldn't obviously tell Stepchange this

KID77

Phoenixx - I am starting either from 1st july or 1st aug latest if sc dont set it up on time so havent given myself anytime for emergency fund. Maybe i should ask sc to delay based on this advice, are creditors more likely to default me in these couple of months of token payments as ideally thats what i want?
i had a look at your signature, you've paid of alot, do you oay a high amount each month or have you managed f&f settlements? thanks for all your advice, this site has been so helpful and inspirational for me at a very low point in my life xx

KID77

Blisteringblue: thanks for your reply, im using my phone for this and cant work out how to reply whilst copying your message.....
Anyway, do you think a couple of months of token payments before starting dmp will force bc to default me? Did you receive any more of a hard time from creditors when you went self managed? what did you tell them the reason was? xx

Riorio

phoenixx wrote: »

Hi - you will need to manually send the £1 payments: Advise SC the date you want your DMP to start. They are usually good about this. After all - they want you to succeed. Write to each of your creditors telling them that you are in financial difficulty, are consulting with sc and that you will only be able to offer a token payment of £1. Request that they freeze interest and charges. January15 who posts on this thread quote
s from the Lending Code - again, read through the thread - which is very powerful. Include a cheque or postal order for £1 with each letter. There is a template somewhere on this thread that you can customise. Otherwise, I have seen one on the NEDCAB website (a wonderful resource for those starting out on DMPS). We did 1 month of token payments but in hindsight should have done 2 or even 3 before starting DMP properly. We initially set our budget way too tight and had to adjust payment to creditors down which was tough as it is much easier to stay the same or go up with them.

Hope this helps.

Thank you it helps it :T so new to this so any advice is welcome. I will look into the letter and get it prepared. It seems so scary the unknown of it all at the moment !