DMP - will it effect my credit rating?

mel3510

So my husband and myself are in a mess. We owe approx 37,000 across 2 loans, 4 credit cards, catalogue account, sofa finance and an overdraft. We've embarrassingly had to move back in with my parents after things got worse whilst I was on mat leave after having my first child.....he's now nearly 2. We rented prior to this and our credot cards built up as I was having to buy the food shop on them.

Anyway we've been with my parents 7 months and we're no further on. I pay over the miniums but then end up needing to use them at the end of the month. Im considering a DMP but wondering if I'll be allowed as I don't miss payments and would this effect my credit rating? I just don't know what my best option is

Mel x

Tixy

You don't need to have missed payments in the past to be eligible for a DMP.
If you are unable to pay off minimum payments without having to reuse the credit then you would likely qualify.

Yes a DMP will have a serious impact on your credit file (and anyone else who is financially associated to you). As you will be paying less than the contracted amounts it is likely that the creditors will enter defaults on your credit file, certainly at the least they will record missed payments/arrangement to payment markers.

If you are considering a DMP I would definitely make sure you speak to one of the debt advice charities for some advice on your options and the likely implications.
Make sure you don't use a fee charging company for a DMP, use one of the charities or payplan, who do not take a cut of your monthly payment.

Suseka

Seeing as it sounds as if you are struggling to make ends meet then you've really got nothing to lose by speaking to a debt charity advisor. We had never missed ati payment in all the years we had borrowed finance until my husband took a substantial pay cut (not by choice).

Stepchange (who I am with) have an online calculator, so you could use that first if you don't want to speak to anyone in person yet. Also National Debtline has lots of info online which is worth a read.

Also pop onto the DMP Mutual Support thread to see how other folks are getting on, many of whom are in your position and just starting out with a DMP arrangement. Mines been running for a year now and I can't tell you have liberating it is to be dealing with my debts and seeing those balances go down

National_Debtline

Hello there,

As already mentioned, a DMP will have an effect on your credit file. It is an informal way of dealing with your debts which can provide you with a fair amount of flexibility. It is only likely to be a potential option if you cannot meet your minimum payments. To determine whether or not that will be the case please do consider completing a comprehensive financial statement, you can find one on our website, here.

Our website also has a large number of fact sheets, including one which outlines DMPs in a bit more detail, please click here to find it.

I cannot stress how important the budget is, once you know exactly how much you need to live on - you should be able to decide what the best option will be for the debts.

Very best wishes,

David @ National Debtline.

sourcrates

mel3510 wrote: »

So my husband and myself are in a mess. We owe approx 37,000 across 2 loans, 4 credit cards, catalogue account, sofa finance and an overdraft. We've embarrassingly had to move back in with my parents after things got worse whilst I was on mat leave after having my first child.....he's now nearly 2. We rented prior to this and our credot cards built up as I was having to buy the food shop on them.

Anyway we've been with my parents 7 months and we're no further on. I pay over the miniums but then end up needing to use them at the end of the month. Im considering a DMP but wondering if I'll be allowed as I don't miss payments and would this effect my credit rating? I just don't know what my best option is

Mel x

Hi,


£37,000 is a lot to repay via a DMP. Could take many years, there are other options.

It depends on how much money you can afford to throw at your debts, you really need to do an S.O.A so you, and we, can see exactly where the money is going.


the link is below :


http://www.stoozing.com/calculator/soa.php