Stepchange & Increased PDL Debt

time-4-a-new-start

Hi

I have been in a DMP with StepChange for nearly 3 years. Since that time I have been making regular payments too my plan and debt is falling slowly.

However since starting the plan I have encountered unexpected bills and as such as I had no access to credit had to turn to payday loan providers!

What happens very quickly is that this short term funding comes long terms debt as you need to take another loan to repay the first and so on. Hindset is great, but when you face an unxpected bill you never think it would snowball into months and months.

So Im now in the situation where I owe £4.6k in additional payday loans. But I cant go on repaying these by having to take out more debt as this will quickly increase.

So I wanted to ask the question. Is is possible (or has anyone did this) for me to ask StepChange to include this debt in my existing DMP? Im happy to increase my monthly payment into my DMP, so my eixsting creditors payments remain the same or even increase slightly. But I'm scared that if I do approach StepChange it may jeopardise my existing DMP (as they state not to take out new credit) which is my priority.

I could contact each of the PayDay loan companies myself and request reduced payments. But feel that without the support of a charity I will be subject to their constant calls (they have phoned me direct at my work before) and also not having to freeze interest or accept lower repayments.

This is a mess but I want to try and resolve it via the best option.

I would be grateful for any input or advice

thanks

time-4-a-new-start

I have looked at trying to resolve the PD Loan debt via another company - eg idebtplan - however again don't know how this will work with my existing DMP. Also I'm reluctant to pay this company £35 a month for doing so.

BillJones

time-4-a-new-start wrote: »

Hi

I have been in a DMP with StepChange for nearly 3 years. Since that time I have been making regular payments too my plan and debt is falling slowly....

...I have encountered unexpected bills...

...What happens very quickly is that this short term funding comes long terms debt as you need to take another loan

Which is it, your debt is falling, or rising?

It's important to note, these "unexpected" bills are not unexpected. Things happen, to all of us. Cars break down, ovens stop working, carpets wear out, and so on. Your budget needs to include these ongoing "one off" events.

time-4-a-new-start

Hi BillJones

My DMP is falling, however the payday loan debt has started and is increasing.

Budgeting for future unexpected costs isn't easy when most of my income is being used to pay bills, mortgages and service my DMP each month.

Then when an expected car repair bill of £2,865 lands on your door, there isnt much you can when you need the car for work and have no access to funds.

BillJones

No, which is why you need to include something in your budget for these unexpected items. Each one may in and of itself be unexpected, but as you've seen, it is far from unexpected that something will come up.

As to your car repair bill, you can buy a perfectly good car for less than this, so it's simply not true to say that you have to pay it.

No matter which way you want to look at this, you've been living beyond your means for a long time now, and still are. You need to increase your income, cut your spending, or both. There is no other route back to financial health.

time-4-a-new-start

yes that was the repair cost. My turbo blew up and damaged the lower part of my engine. The alternative to buy a new car would have cost the same plus I was already out of pocket for my mechanic starting work, so would have had to pay him then scrap the existing car, then buy a new one - and who knows what future probs I could get with a cheaper car.

And yes I was living beyond my means which is why I am in debt - like most people. But this isn't what I was asking about. I was hoping for some advice on to best sort the current issue.

BillJones

time-4-a-new-start wrote: »

I was hoping for some advice on to best sort the current issue.

You need to earn more, or spend less. That's the top and bottom of it.

You've presumably breached the conditions of your previous arrangements by taking on more debt, so be cautious about what you say now to anyone that is helping you.

Monkeyballs

Hi,

Best bet is to come clean and speak to SC about your new debts.

Explain that it was an emergency and that it was for repairs to your car without which you would be unable to work and thus have no income...

You can add new debts to your DMP, there is even a section on their website asking if you have incurred new debts that you would like to add to your list of creditors.

Worst case scenario, you get booted off your SC DMP but then you can go to Payplan with an entire list ad get the ball rolling again.

The one thing I would strongly suggest is that you make a couple of months token payments and save what you would normally pay out each month as an emergency fund and keep topping it up with whatever you can to avoid the same situation in future.

MB

time-4-a-new-start

thanks Bill

Yes I hope that ive i can cut out the PD loans then i will be spending less each month that will allow me to save money for any future expected bills.

sourcrates

You don't need to do this through your existing provider.


Self manage it, for free, please don't go to a fee taking DMC either, they do nothing you cant do yourself.


Simply write to the PDL companies, explain your struggling, and ask for a re-payment plan, stepchange need not be any the wiser.


Most allow you to set these up online anyway, without the need to speak to anyone, ie, Wonga, but best to write and explain yourself.


Don't forget to cancel the CPA to each lender with your bank, also good practice to report your debt card stolen, and to get a new one, a number your creditors will not have.
Repay any "arrangement" by standing order or online banking using there bank details, never give out your new card details.

time-4-a-new-start

Hi MB

If I do come clean and tell SC who does the booting? SC or the creditors?

Also if I do get booted will another charity eg Payplan accept me on a new DMP after having being removed from one before?

I hope to start building up an emergency fund after I sort this as ultimately I have been trying to find £4.5k a month to repay each. But the main funding source for them is another loan, which then over time increases their interest and overall cost.

I should add that I have been stuck in these PayDay loans since November 2011. Due to not knowing what I can do with StepChange I have scared and not know which way to turn.

So I have just been repaying each loan and then reborrowing each month to keep them paid. Some months I can chip off more but with the continuing interest and charges it doesnt stop the overall balance increasing. If I can clear these off, I know I will be able to get back on track and better manage my finances along with saving for unexpected bills.