DIY DMP - Is This Possible?

dreamcatchme84

Dear all,

I received a letter from Lloyds Bank yesterday morning explaining that I had not paid any money into my graduate account, which has a £2000 overdraft facility, since April. I had not opened the previous letter advising me this was the case.

So, instinctively, I transferred £100 across to this account and called Lloyds to notify them that I would be addressing this soon. But then the conversation led to a talk about my current financial state, and I quickly realised that I am in quite a serious amount of debt.

Lloyds then transferred the call to StepChange and I went through everything with them blow by blow.

For the past few years I have been shifting debt around by taking advantage of various 0% offers, but it has now got to point where I have racked up over £20,000 worth of debt across seven accounts (one overdraft and six credit cards).

StepChange said I had two options: bankruptcy or a DMP.

But the more they explained the process of a DMP the less appealing it sounded. They want me to pay £351 per month for 62 months in order to clear the debt, which will leave me with defaults on my credit file.

The debt I have at the moment (with the exception of the overdraft) has 0% interest for anywhere between 10-31 months. I have taken on some extra work over the last month, so as of August my income will improve significantly. If I am disciplined, I could pay off the overdraft fairly quickly and then tackle the cards one by one.

In my opinion, I will definitely end up with my credit rating being impacted if I go with StepChange but if I go it alone I may be able to avoid this.

Has anyone else been in a similar position? Any advice is greatly appreciated.

ellesbellesxxx

Hi, absolutely you could do this but it will need a lot of discipline and hard work.
If you go to http://www.stoozing.com/calculator/snowball-calculator.php this will show you exactly how to tackle the debts and how long it will take you...snowballing.
A DMP is a good option too but yes, it would have an impact on your credit report. Def worth keeping in the back of your mind though - it sounds like you are relying on the 0% interest at the moment, however they don't stay on 0%.
If you would like any advice on where you could make cutbacks, feel free to put up your SOA and you will be offered advice. Good luck!

Puzzcat

Probably worth checking your credit file before you make any decisions in case it is possible you already have any defaults etc showing. A dmp definately does hit your credit rating, but most of us doing this do not want credit again so its not an issue.


If your can afford the payments and don't have any black marks currently then snowballing is probably the way to go.


Puzz. x