Debt, no idea where to start

indesisiv

First things first. Post a SoA (Statement of affairs) to show income and outgoings. This will determine the next steps. Do you have the spare cash to pay each month, can you save elsewhere in your budget etc.
SoA Template is here

thewhiteavenger

ConsumerWizkid wrote: »

What?! Advising people to jump straight into a debt management plan is awful advice.

This will cripple your credit rating before you've even got going in life.

Considering you're straight out of University it would be better to contact the companies in question and arrange a plan with them each directly, explaining your situation and desire to pay.

Work out from your income what you can spare, divide it amongst the creditors and ask for a review after 3-6 months to look at increasing the amounts you are paying them.

So to summarise this post:

What?! Advising people to jump straight into a debt management plan is awful advice.

Do a debt management plan

:rotfl::rotfl::rotfl:

thewhiteavenger

Debt Management plans fall into 3 main camps:

1. a do-it yourself plan. CAB , National Debtline can help you with this is you need template letters etc.

2. A fee-free plan - the main providers of these are Stepchange and Payplan.

3. a provider who charges a fee. No-one recommends this as it just means you are stuck in a plan for longer.

All options will have the same likely effect on your credit file

Monkeyballs

I actually agree with WizKid here...

If the Op has other debts which they are managing and it's just these two which have been allowed to slip (ok, I admit it's a little unlikely) then I'd rather they contacted the two DCA's independently to enquire into a repayment plan which didn't include having all debts rolled into one.

Contacting Step Change doesn't automatically mean they will recommend a DMP either bear in mind.

All that said, I'd much rather they just spoke to their parents first and then maybe even try contacting their Uni "friends" for a contribution to the Scottish Power bill too

Something else to consider is that these DCA's may be acting on behalf of the original creditors so possibly contacting them to discuss repayment option might still be on the table too?

MB

ConsumerWizkid

Managing your debts yourself looks infinitely better to future creditors than requiring a 3rd party to hold your hand and send letters on your behalf.

Entering a DMP does not force creditors to accept your offers any more than requesting plans yourself and they can still register defaults on your file every month if they so choose. Entering a DMP does however get marked on your credit file so you can significantly worsen your situation by taking this route as an easy option.

2k as a graduate presumably living at home is nothing to be worried about and Op should be able to come to suitable arrangements without further damaging his fledging credit file.

[Deleted User]

ConsumerWizkid wrote: »

and they can still register defaults on your file every month if they so choose.

No they can't.

A creditor can only register one default, per account.

ConsumerWizkid

Bedsit_Bob wrote: »

No they can't.

A creditor can only register one default, per account.

Sorry yes you're right in that. Nonetheless, this forum is too quick to post links to stepchange and just recommends DMP's to anyone that posts. Got debt? Oh get someone else to deal with it. Thanks for the post count.

This is a case where taking direct action, phoning the 2 companies in question and arranging a suitable plan, is a far better option. Doing so will avoid a DMP flag on an already thin and degrading credit file.

Growurown

ConsumerWizkid wrote: »

Managing your debts yourself looks infinitely better to future creditors than requiring a 3rd party to hold your hand and send letters on your behalf.

Not always. My creditors seemed to be happier to go through SC rather than deal with me personally.

ConsumerWizkid wrote: »

Entering a DMP does however get marked on your credit file so you can significantly worsen your situation by taking this route as an easy option.

2k as a graduate presumably living at home is nothing to be worried about and Op should be able to come to suitable arrangements without further damaging his fledging credit file.

With two debt companies chasing the OP I think the credit file will already be damaged.

A DMP might not be the right route for the OP if s/he can manage full payments on all the other debts and come to an arrangement on the outstanding debts, but ultimately they will have to look at their finances and make that decision themselves. Remember the OP did ask about using a debt management company in their first post. If that is the route they have chosen others are just advising not to go to a fee paying company, rather than saying they should go down the DMP route.

blisteringblue

While consumerwizkid could have put it a little better without sounding so flaming I do tend to agree with him as MB also says.

People do seem really quick to jump into DMPs, while the OP might think that debt is huge in the grand scheme of things it isn't. I appreciate straight from Uni with possibly no income it could be a difficult position, but if you explain that to the companies (that probably fell over themselves to offer credit while at Uni) they will have options without the need for a DMP.

A DMP is last resort time. It was for me anyway, and yes it has been a godsend but my credit is dead in the water for 10 years and that should never be taken lightly.

[Deleted User]

10 years :huh: