Please help -scared stiff of DMP

Scaredofdebt_2

Hi everyone, I am new to the forum and haven't actually used a forum before but read a lot of posts from this one over the last week. Myself and my hubby have always had credit cards but over the last 4 years, after losing my mum after a short illness, I have built up a large credit card debt. Mum's death is not the only reason, not handling money properly over the years and using credit cards to live have all added up. Myself and my hubby sat down last week and actually totalled up how much we owe - the grand sum was £57000, I can't believe how stupid we have been and how we have managed to get to this sum. We though we owed about £20000-£30000!!

So as I am sure you can imagine the last week has been hell! I am suffering with severe anxiety and not sleeping but still trying to work and run around after my 2 gorgeous boys. We have spoken to Stepchange and they have recommended that we start a DMP as we have quite a bit of equity in our house (not quite enough to pay the debt off though and we can not remortgage anyway). I am frightened to death, I know I need to gain some perspective but am really struggling at the moment to see the light at the end of the tunnel. In theory in 10 years we could be debt and mortgage free if we are careful but can't at the moment see how this is going to happen. I need to contact the creditors and tell them we can't pay and I am absolutely dreading this and what they might do. Stepchange have been brilliant as has my hubby, friends and dad but it is currently taking over my life and making me feel ill. Please is there anyone out there who has been in our situation and survived. Sorry for the long post!!

KirstyO

First of all, congratulations on facing up to your debt (or your Lightbulb moment), it is a big and scary step, and one that people often put off for a long time.

You have come to the right place, everyone here wants to help and support others, you're in good hands!

The majority of people on here who aren't yet debt free are on some form of DMP. Sometimes this is with Stepchange or another charity, sometimes it is self managed. It is a survivable journey and one that provides stability and light at the end of the tunnel. If they are expecting your DMP to be around 10 years then any defaults/ccjs that you have already (or may incur over the course of the next few months while you get your head around everything) will have dropped off by the time you finish! (These only stay for 6 years from date of default).

I hope by looking around you will see success stories as well as people with a long journey ahead (people tend to track progress in their signatures). You'll see that some people have even more debt than you and are surviving and looking forward to the end of their journey. You'll see also that some people had less debt but are still fighting just as hard to be clear of it. A lot of people have experienced the sleepless nights, avoiding letters and phone calls, feeling sick, and so on.

Some people here have been on debt journies for many years, some are only just starting, some have even been debt free for many years, but need the support of people on here to help them stay that way!

Please, if you feel you can, post a statment of earnings (SoA) so that we can help you kick start your budgeting. We may make suggestions that you don't like, but mostly we are only pre-empting what Stepchange will advise when they go through income and expenditure with you.

I will try and be gentle and constructive in my responses, and I'm sure others will too

Welcome to the family!

October_Starter

Hi SoD!

Welcome to the forums!

Take a deep breath. You have come to the right place as there are many people who have or are in similar situations to yourself. You take lots of little steps and eventually you get everything paid off.

I don't know much about Stepchange myself but they have helped many people on here.

The best thing you can do to start off with is complete an SOA. (Statement of Affairs) http://www.stoozing.com/calculator/soa.php

Then try a snowball. It will help you work out how to pay off your debts. http://www.whatsthecost.com/snowball.aspx

Most of all though, relax, you have started the journey and that is the hardest part!

October xx

Scaredofdebt_2

Thanks. There does seem to be an amazing amount of support out there and myself and the hubby have become a bit obsessed with it to be honest. I have just got my two monkeys to bed and I am absolutely shattered but will post my SOA. I have already gone through one with Stepchange and although money is going to be very tight, I am going to look at it as a challenge! Had a good long chat with my lovely dad tonight and although still scared to death, feel a little more positive about things.

SoD

October_Starter

Glad you are feeling a bit better. You will get there. I strongly advise reading the diaries as they are amazing inspiration.

October xx

livingindreamland

We are one year in, our debt was a similar level to yours, and next month in drops into the 40's :-)
Stepchange are brilliant, but please read the DMP thread, as you may find you need a bit of help getting interest stopped etc. It can be done.
My other advice is give yourself a month or two of token payments to creditors so you have a bit of an emergency fund. You can almost guarantee that once you have no credit something major will go wrong. Our heating broke twice, and the washing machine packed up in the first three months. But the feeling of paying these with cash and not getting further into debt was amazing.
My other piece of advice is be very realistic about your budget. You may find you both need to smoke (on paper) to make life a little easier. A small treat now and again makes it easier in the long run, and you are less likey to fail.


Good luck, and the panic and sleepless nights will soon be a thing of the past. I know as I have been there!

Scaredofdebt_2

Thanks again everyone for your useful comments. Managed to sleep last night but woke up with that sinking feeling this morning. I need to.open a new bank account today and get the direct debits sorted. My first cc payment that I can't pay is due next week so will have to start contacting them but my current account looks healthy at the moment as the bills haven't come out yet so will wait until then.

Like everyone has said I am sure it will get easier and it will be a huge relief to start to become debt free. Using credit cards is all to easy, paying them back isn't.

Scaredofdebt_2

Just another question, did you get a lot of hassle from your creditors? - I am terrified at this and I don't know why because I know they can't really do aanything.

Karen777

welcome! No hassle, you don't have to answer the phone if you don't know who it is but I wrote to all of mine letting them know I was setting up a dmp. No one was horrible to me and I just filed all the mail and sent it on to payplan if I wasn't sure what to do with it. Not sure if stepchange offer a similar service but you can always ask them for advice if you get mail you don't know what to do with. well done on getting this far. it all gets better from here.

KirstyO

It tends to be the case that you only get hassle once you start missing payments. most people are in this situation before they start their DMP. As you are suggesting that it is only the payments coming up that you can't afford you are not yet in that position.


Contact them, they are only human and they are there to provide good customer service whatever your circumstances. Provided all of your debts are with regulated lenders then they have to be fair and work with you in your circumstances. This normally prevents them being obstructive on the phone.


You can call them if you're prepared to talk to someone, and advise them that you will be setting up a DMP with whatever charity. The more helpful ones may offer a payment holiday until that is set up. The less helpful ones will say 'thanks for letting us know, but we'll carry on operating your account as usual until we hear from your charity'. Even if they fall into the less helpful category, you have done your duty by informing them that you are in financial difficulty.


If you have lots of different lenders than a letter might be easier to each one (make sure you quote relevant account numbers on each letter). If you decide to use snail mail, by the time they have opened it, passed it round to the correct people and sent a response, your DMP may well be up and running.


Once that is in place you don't have to respond to any lender mail unless you want to or unless you've sought advice from Stepchange (or whoever) and they have suggested you contact them directly.


Think of a managed DMP as an older sibling, holding your hand for this bit of your journey They know more, but they are still on your level.

National_Debtline

Hi there,

I think that there is some good advice on this thread for you to consider, such as getting together a realistic and consistent SOA, opening a new bank account (with a bank where nothing else is owed, so that your money is safe) and taking free advice.

I understand your concerns about missing the first payment on a credit card, I speak to people about this all the time and it is a very strange feeling for a lot of people. What you need to try and remember is that you are doing this to correct the problem in the long term. If you could afford to maintain your payments in full, then you would do that.

As this is the first payment you have ever missed you may get a couple of phone calls and letters simply reminding you that your payment was due, did you know you missed it? Ignore the phone calls if they are causing stress and send a letter to your creditors to keep them informed of what is happening. To try and give you a bit of breathing space to consider all of your options I would suggest sending a Hold Action letter (once your bank new account is up and running). It is a letter that tells your creditors that you are struggling, considering your options, and asks them to give you 30days before they do anything (add interest, charges etc.). https://www.nationaldebtline.org/EW/sampleletters/sole-letters/Pages/Hold-action-on-your-account-(sole-name).aspx#

This letter is not legally binding but a lot of creditors understand this means you are taking advice and trying to work out a plan to sort the debts, so they do tend to give you this time. I hope this helps give you a little bit of space,

Laura
@natdebtline.