January 2015 is the beginning

January2015

Logging into our new current accounts today and my payday is Friday this week. Usually we would be limping to get to Friday (financially that is). Both accounts nicely in credit (not massively, but in credit ) What a difference a month has made to our lives. I know we are only just at the beginning of our DFW journey but I feel so much lighter and able to look forward to the rest of our lives. We both feel there is a positive future and definitely an affordable retirement ahead for us both.

I can't thank everyone who has given us advice and guidance on this forum enough. I feel I have gained an amazing group of friends who know from experience what we are going through, and because of their own experiences will never judge us over the size of the mess we have got ourselves into. Thank you, thank you, thank you.

January2015

Another diary post from me.....my head is so full of thoughts and ideas I seem to be filling up the diary in just a couple of days:rotfl:

So, this diary entry is about my emergency fund. At the moment my signature reads the emergency fund stands at £250 out of a £1,000 target. I looked at that and thought perhaps when I look back on diary entries at some far distant date in the future I would think how on earth could I go into our DMP with just £250 emergency fund:eek:

So to clarify, as of today's date we actually have £1,066 in our savings account, and this is split across planned needs as follows:

Christmas & Birthdays £300
Dentist/Opticians etc £114
Emergency Fund £250
Clothing/hairdressing etc £192
Repairs/Maintenance £210


In reality, if an emergency cropped up all of our £1,066 is available if we really needed it, but for budget planning purposes only £250 shows as emergency funds.


Sorted :beer::beer:

Historybuff

Well done, January. I really identify with your posts because I'm at a similar life stage to you with a mass of debts. It wasn't until the penny dropped about retirement being scarily on the horizon that I got myself into gear to do something about it. Good luck with your debt busting. Those totals will start to go down very soon.

System

Well done on your emergency funds...ours are no where near that total unfortunately, but I am confident they will grow soon. We did take £25 out to pay deposit on our September break, so that is probably not the best idea, but I am sure we will claw it all back and be fine. Just made a Fleabay sale today, so every little helps

Scaredofdebt_2

January2015 wrote: »

Logging into our new current accounts today and my payday is Friday this week. Usually we would be limping to get to Friday (financially that is). Both accounts nicely in credit (not massively, but in credit ) What a difference a month has made to our lives. I know we are only just at the beginning of our DFW journey but I feel so much lighter and able to look forward to the rest of our lives. We both feel there is a positive future and definitely an affordable retirement ahead for us both.

I can't thank everyone who has given us advice and guidance on this forum enough. I feel I have gained an amazing group of friends who know from experience what we are going through, and because of their own experiences will never judge us over the size of the mess we have got ourselves into. Thank you, thank you, thank you.

January,
I loved reading this post as it is just how I feel. Our first SC payment is due on the 11/03 and think we are a little bit behind you in terms of setting it up but it already feels like such a relief to have money in our bank account and actually have some savings. It is the middle of our month for pay and usually I would be struggling to pay everything. Our DFD is not for 10 years and 9 months which is a little scary but hopefully as my boys get bigger, I will be able to pick up some more hours at work and get this down. It really does drive you to save money though - I don't want to spend anything! Good luck:beer:

January2015

I've done some more brain churning today - I'm sure you will all smell the burning from over there in forum land

I was initially worried about the level of our debt increasing until things fall into place and our creditors all agree to freeze interest. I have been worrying about the level of debt rising and for some reason the figure of £100k debt is like my nemesis

Today, I thought what would have happened to our debt level if we had continued on the path we were on - which would undoubtedly have meant borrowing more from that person named Paul to pay his mate named Peter. The answer is we would have very quickly reached £100k debt within just a few months (or sooner).

So, the upshot of today's brain churning is that whilst neither of us do not want our debt level to reach £100k and we hope our creditors work with us and agreed to freeze interest, if they don't we won't lose sleep over it. We can accept that at some point they will default us or freeze (or maybe just reduce) interest and all of that is far better than the place we were in up to our LBM

I think this is all just about looking at the problem of our debt (and the horrific level of our debt) from different perspectives and acknowledging to ourselves we are doing our best and no-one can ask more of us than that

pineconesjay

Whatever they will do or won't do, doesn't matter. No use worrying about it!
It won't help at all to worry, only make you feel sick.
But it seems you have the right attitude now - peacefully accepting whatever is to come. And be glad in the knowledge that you're doing something about it (rather than continuing to ignore the situation for another 6 months!)

System

January2015 wrote: »

I've done some more brain churning today - I'm sure you will all smell the burning from over there in forum land

I was initially worried about the level of our debt increasing until things fall into place and our creditors all agree to freeze interest. I have been worrying about the level of debt rising and for some reason the figure of £100k debt is like my nemesis

Today, I thought what would have happened to our debt level if we had continued on the path we were on - which would undoubtedly have meant borrowing more from that person named Paul to pay his mate named Peter. The answer is we would have very quickly reached £100k debt within just a few months (or sooner).

So, the upshot of today's brain churning is that whilst neither of us do not want our debt level to reach £100k and we hope our creditors work with us and agreed to freeze interest, if they don't we won't lose sleep over it. We can accept that at some point they will default us or freeze (or maybe just reduce) interest and all of that is far better than the place we were in up to our LBM

I think this is all just about looking at the problem of our debt (and the horrific level of our debt) from different perspectives and acknowledging to ourselves we are doing our best and no-one can ask more of us than that

Well said!:T I remember trying to work out once how long it would take use to clear out debts if we had carried on the way we were....like you, borrowing from one hand and paying back with the other....and I think it came to something stupid like 87 years!!!:eek: Bear in mind I am I am already 57 and I think you can see that figure was never going to work. The thing I worried about most, was leaving my debts for my kids to sort out, so that is one thing less to worry about now!

Brogden

January2015 wrote: »

Thank you kind sir



I am interested to know why you consider self managing preferable to going through a free debt charity service - being new to all this DMP stuff I can only see the benefit in having SC do the negotiations on my behalf, but am open to being informed differently



:rotfl:I do so love your name for [EMAIL="H@alifax.....can"]H@alifax.....can[/EMAIL] I please have permission to use it from this point on:rotfl:



The balance showing on our accounts (2 of the damn things) is the total owed; so you are correct interest for the full term of the loans was added the day we had the funds deposited into our current account and we have been (slowly) chipping away and interest and capital (in that order;)).

Hellifax have written advising they will accept the reduced payments offered by SC but advised as follows:

"You will pay more interest overall than if you were paying the full monthly amount when it is due. This is because interest is charged on the outstanding balance and this balance will be higher if you pay less than your full monthly payment when it is due"

My understanding of that (and please feel free to tell me if I have misunderstood) is Hellifax are treating the proposed offer of reduced monthly installments almost as a type of repayment reduction/holiday meaning the overall length of each loan will need to extended and they will continue to charge interest on the outstanding loan balance meaning we will pay more interest overall.

I probably haven't worded my posts very well, but what I am trying to say is that we are happy to freeze the balance of the loans as they are now, which includes the interest calculated for the entire term of the loans. We are not happy for Hellifax to continue applying interest on the balance of the loan due to reduced monthly installments offered and agreed through SC - does that make more sense? It will take far longer to clear the loans than the original terms with the reduced payments, but if they keep adding interest we will most likely never get there as the interest each month is more than the payment SC have offered them.

Hi January

I am sorry to take so long replying - this is a week off work for me and a busy one too!

Firstly sorry.......you're ahead of me . Having trod these boards for some time I know that a lot of people think that a personal loan works like a credit card and when their DMP is 'crystallised' can't understand why the debt has jumped up. Sometimes that is because that inflated loan figure with the interest lumped on is something they never took note of originally! I should have remembered I'm talking to January here who knows how they work .

I am very sorry that Hellifax are continuing to increase the interest and treat this as a payment holiday This is a temporary position as sooner or later they will default, terminate, probably selling the debt. The thing is we don't know when this will happen and it would be worth checking with Hellifax their policy on this. I think it is likely (I have a defaulted Hellifax CC) that this will be when you are 6 months in arrears.

Looking at the DMP Mutual Support Thread so many people have this problem and (in response to your question about my preference for self-managing) I would put them on token payments of £1 per month and give them an I&E to back up that this is all I could afford. The default would then come within 6 months. If the Step Change 'pro-rata method' is in use and you are paying (say) 50% of Hellifax's minimum payments then default would be 12 months, if you are paying 75% then it will be in 18 months etc etc. The more you pay them the longer the agony may continue

I am not suggesting that they cannot be forced into stopping the accrual of further interest but I wouldn't rely on Step Change to to get this sorted........you would need to send the proverbial 'rocket up their backsides' directly :mad:!! Complain and ultimately take to the FOS if necessary.

I appreciate that this 'maverick' approach is not for everybody and you cannot be a Step Change client if you do things like this!

Just to illustrate my point about self management further with a silly exaggerated example !! If your own I&E calculations indicated you could pay £500 a month to your debts and you had 5 creditors you could pay them all pro-rata amounts each month. Let's assume the debts are the same they would all receive £100 per month. Alternatively you could pay them all £1 per month and pay £499 into a savings account. At the end of a year there would be £5988 in the account. That amount could potentially pay off a debt of double that as an agreed 'partial & final' settlement. This could bring forward the DFD by years :T!!

I do stress that everything must be by agreed payment plans where the payments are backed up with a good I&E statement. We don't want any court appearances Creditors are very flexible as to what they will allow you to include as expenses and I have had agreement to include additional mortgage and pension contributions for example.

Step Change are great for taking people from the brink and getting them on the straight and narrow. I had long conversations with them but I know I am better off doing it myself. Some people move to self managing a year or so down the line when the initial stress has eased

All the very best m'dear

Brogden x

January2015

Many thanks for your response Brogden. I can see your point of view re. going down the self-managed DMP route and it is something I will take on board.....for the future

At the moment this is all very new to us and being brutally honest (with myself rather than you) I think we need the life lessons of having to pay a single lump sum through a third party (StepChange in our case) and learning to live within an agreed budget. Clearly we didn't have a clue how to do that, hence the levels of our debt.

My concern with the idea of your example of a £500 DMP, paying 5 creditors £1 p/mth each and squirrelling away £495 p/mth to save for a partial and final settlement is that we have not truly learnt our lesson about spending within our budgets yet and hence any condsideration of self-managing a DMP is, for us, at least a year away.

I would love to think we could do this, and we are already saving the money SC allow us each month for things like repairs and maintenance, emergency funds, opticians etc. etc. If we can save for these things for a minimum of a year, and only access those savings when we need funds to pay for any related items, then I will be happy to believe we could self-manage the DMP and potentially decrease payments to creditors and increase the savings element toward saving for partial and final payment offers.

I have to say that using YNAB has been enlightening and made us think more about us income and expenditure than ever before. I have always been a spreadsheet girl I love Excel and am fairly proficient in using excel formula (and VB code), but I needed to logic and thought processes that went into the creation of YNAB to put me on the right path.