DMP overpayments

meredith132

SC have told me to pay a token payment for a year if I go ahead with the DMP. Think I will be sending everything off tomorrow. I am just going to run it past a good man who is so good with all this stuff.

I am planning on a clear out ebaying etc, I would want to throw profits at the debt so is it ok to do this even when an agreememts in place. I am thinking as I am self employed if I had a good month and money left in my account :rotfl:I could do one off payments possibly.

Reality is starting to sink in now, things will really have to change round here.

Kate_fixing_it

In a weird way I want to congratulate you. It sounds like the light is well and truly switched on for you. By asking questions you are making informed decisions and making secure plans for a debt free future.

Personally I would do exactly as SC advise. Token payments before starting the "real" plan and use the time to learn how to stick to a budget and build up a buffer. If you pay extra the creditors may see it as you can afford to pay more but are refusing and they may be more difficult in accepting the plan.

I appreciate that now things are clearer in your head you want to get going on it but try to think of this as a long term plan to make things easier on you. You can always put the money towards the debts at a later date if you wish.

Keep posting and asking. The best decisions we make are the ones made with a fully informed mind.

Kate x

Trajal

Well done on some important steps.

However, in terms of the debts and the profits from your ebaying... I think if SC have put in place a realistic plan then this should be something that you stick to. I appreciate there's a temptation to throw money at the debts now, but think to yourself "what would happen if..." and then insert something going wrong.

Do you have a reserve budget of 'emergency' cash that would be enough to pay for any minor disaster that you encounter without having to get into more debt?

If the answer to that is no, I suggest you take that money, put it to one side and have it in place as your contingency fund. When I was getting out of debt, I didn't do that and then had a problem with the car about 3 months before I was originally due to go debt free. It delayed things by an additional six months which was very frustrating!

I strongly recommend an emergency fund as Kate also says above.

meredith132

Thanks Kate , so good to have somewhere to come with all the questions too.

I did wonder whether it would be held against me if I did the decent thing, so I will just use any possible gains for an emergency fund.

I have no doubt this will be such a struggle for me I have robbed Peter to pay Paul and swapped cards for years. Then I think the simplicity of the future will be a breath of fresh air. I am just going to have to rein it in big time

meredith132

Thanks Trajal, yes I think emergency fund is the way to go. I just can't get rid of the debt quick enough now.

I think living within my means and cost cutting will be challenge enough. I actually chopping the cards up later EEEkkkkk ! :beer:

Kate_fixing_it

meredith132 wrote: »

. I actually chopping the cards up later EEEkkkkk ! :beer:

Don't underestimate how big a step this is. I took a photo of mine when destroyed and it still sends shivers down my spine. Looking at it brings back every single feeling - panic, shame, horror, fear...

The good news is that in a couple of months you will be where I am. You'll be able to look at that photo and when those feelings rush back you can breathe deeply and thank God/Fate/Universe/Yourself that you are not there any more and never will be again.

Kate x

Trajal

Hehe I didn't cut mine up, i put them in a mug, filled it with water and stuck them in the freezer. Juuuust in case I needed them in an emergency.

Turned out to have been a wise move, but of course I didn't have an emergency budget like you will have so get cutting!

double_mummy

once you have your emergency fund (3 months living expenses) you can keep saving to offer F&Fs which could cut time off of your DMP

eyeopener2

Emergency fund every time, stuff the creditors until you are stable financially.

I didn't have one and got away with because within 3 months of my dmp ending, my clutch went, my brakes died and my boiler needed fixing! If any of those had happened year earlier I would have been stuffed.