Please help -scared stiff of DMP

Scaredofdebt_2

Thanks for all the helpful advice
Although it feels daunting have started to get my head around it a little bit.

ampersand

Hello scaredofdebt:-)

As you're beginning to realise, you've found your way to a caring place, full of constructive advice and collective wisdom. What's more, you will always be kept up to date about changes which may affect your debt-free journey.

I'm posting in case you'd like to check out my signature, another of the brilliant FREE groups that Martin recommends.

You have stepchange on board and a good post from ND, so this is just to widen your awareness of what's available.

You will have felt so alone and terrified...until you took the great brave step of posting here, straight into the arms of friends:-) Your 2 little chaps will pick up on the difference in Mummy VERY quickly - and this will do you all even more good:-)

Anyway, get that SOA up as soon as you feel ready.

This is CAP online -
[and they don't proselytise. They're against debt and poverty, brilliant at what they do]
https://capuk.org/

and
https://capuk.org/about-us/awards

They will likely do all the writing to creditors for you, which may ease your fears. All nasties can go direct to them, once you've put yourself in their hands. You'll be learning how to manage now and solo, debt-free. Your new budget will always allow for little treats and family living:-)

There are OS Boards here on mse, too - to help with meal-planning, wise buys, recipes, cheapest car and home insurance, cheap transport deals, family days out etc. mse is a wonderful new world and you now have a Lifetime Passport.

You might even have luck looking in on the compers board - many do.

Welcome aboard - and to Dad and OH too.
#
Finally, congratulations to you kirstyO, might have to see you as trail-blazer for scared:-)

Depth_Charge

Hi scaredofdebt

Welcome to the forum

Try not to worry too much as on the whole debt management plans are not to complicated and creditors are now expected to treat you fairly

General info below on Debt Management Plans from the award winning Citizens Advice CABmoney site including info on self help and an example plan that you might find useful in some way

https://nedcab.cabmoney.org.uk/remedy_4.asp

https://nedcab.cabmoney.org.uk/dmp.asp

The more you understand about debt options, debt management plans and your rights the better. Knowledge is power as they say.

Plenty of good solid support on here also

Best Wishes

DC

Sazzie23

Hi scared of debt

It's really frightening and natural to be worried, but my DMP has changed my life for the better, I have control and am no longer a slave to my finances. Don't get me wrong, I'm seriously skint, but it's managed, I know what I can pay and when.

Occasionally things crop up, e.g. Breakdown emergencies, and I'm lucky enough to have a small emergency fund, so try to get yourself a little stash. Some people sell something, or do overtime which is not included on the DMP, or whatever.., or pay token payments for a few months before the DMP starts, however you do it, get that emergency fund, I promise you'll thank me for that advice.

Come and join us on the DMP Mutual support thread, it's a vibrant and positive thread and we love company.

Scaredofdebt_2

Thanks Sazzie 23, I am struggling with the enormity of it all at the moment in how much we owe and how long it is going to take to pay it back. Trying to think of it as an extra mortgage payment and in 10 years, all being well, we will be debt and mortgage free but 10 years seems a lifetime away right now and my boys will be all grown up. Im sure once it all settles and we get into the rhythm of paying l will start to feel more positive but can't get through the fog at the moment.

Thanks for the advice, we have got a bit of a back up fund and my dad is really supportive. There has been some really good advice. Now time to get up, get the monkeys to school and drag myself to the gym. We don't have an extravagant lifestyle, we both work hard and just want a peaceful life - but we are the only ones to blame for getting ourselves in to this mess and we now need to face the consequences!!

lewpster

I feel the same Scaredofdebt but the DFD you have at the moment is worst case scenario. I know in under 13 years I will be debt free. I feel sick as I will be like nearly 50 then and i will have been in debt nearly 30 years which I am so so ashamed of.

I have nothing to show for my debt, it's just cost of living and the one thing I want to do is show my children the value of money so they never have to go through this.

My DFD will get better but i am new to this too. It's hard not relying on credit cards as i've done it for so long, and having no money but it's only a temporary thing. Just need to be good with my budget, wait for my outgoings to change which they will and my debt is coming down.

That's what's great for the first time in like years and years my debt is going down albeit very very slowly. Good luck xx

Stewart_78

Welcome to the club. Don't panic. We've all been there. Feeling sick with worry and not sleeping etc. Some things I wish I had been told at the beginning are:

1. You will get a lot of auto-generated letters, even way down the line. These usually contain threats and are designed to scare you but always use phrases like 'we may' or 'we reserve the right to'. You will soon learn, as scary as the first few are, that these are to be ignored. If you get a call, simply quote your stepchange plan number and ask them to call them. Then say thank you and hang up. It will stop after a while. There are things you can do to stop calls if you feel hounded, ask for help on here.

2. Don't pay as much as you can early on. Many people worry that their proposed DMP won't be accepted unless they offer a big payment. In my case this was more than I could really afford. The irony of it is that you are more likely to get a quick default and interest frozen if you make token payments of £1 for 6 months. Get it over with.

3. You want your accounts properly defaulted. Some lenders like to start adding 'AP' or 'AR' markers on your credit file. If an account is defaulted, it will disappear from your credit file 6 years from the default date whether you owe or not. If they put on 'AP' markers, your file will be damaged for 6 years from the last marker and that could be the day you settle the debt in 10 years time. So, get them defaulted. Your file is trashed anyway.

4. Leave yourself enough to live on. Yes, you are in a bit of a pickle and yes it is your fault but those banks are saints either. Remember what happened when they got in a pickle? You will probably find that over time, many of your accounts will be sold on to third party agencies. These are far more likely to settle at modest percentage of the debt as they have bought it for pence in the pound. So, pay less every month and build yourself some savings for emergencies / full and final offers in a few years.

Once you have been in it a while, it becomes a bit of a game and the stress will largely go away. I spent years fretting about unsecured debts and to be honest, now, I couldn't care less. I work on my mortgage and figure that once the unsecured ones have been sold on 20 times, I'll finally find someone who will settle for 10%.

Lastly, when were these accounts opened. If they were before 2007, there is a fair chance that the banks don't even have the legal paperwork they need to take you to court for the debt. That is a different subject but if they are egg cards from the 90's or whatever, chances are the debts cannot be enforced in court. You might want to get the DMP settled in and the accounts defaulted before you explore this route.

Jacko_amz

following this thread my partner is starting his DMP and in the same stage as you, has sent off the paperwork for his basic account then can send of the letters and £1 token payment.

He also gets very worried about what will happen next. Its a journey to say the least but we will all get there!

Decked

Scaredofdebt, I am no expert but the following is what happened to me.
Eventually I totalled up my debt to £58k, I had never missed a payment, but was struggling to make minimum payments. In addition to this I had HP on a car and a caravan.
I contacted Stepchange and we planned my entry onto a DMP, leaving the car and caravan out of the DMP. I set up a new bank account with the Cooperative, got a cheque book but no overdraft. I then changed over all direct debits from my Natwest account which had>£5k overdraft.
I can't remember is Stepchange contacted the creditors for me or if I sent a template letter but I never had to pay token payments. Contracted minimums were approx£1900 per month, DMP payments were agreed at £670 per month, all creditors froze interest and accepted the DMP. I had very little contact from the creditors and cannot recall any of them telephoning me. I am now 2 years in and my debt is approx£38k and monthly payments have increased to £1100 per month, car Hp only has a few months to go, so will be able to pay another £250 per month very soon. Since my payments have increased Barclaycard have started charging some interest.

Stepchange have been superb, people may think that I shouldn't have kept the HP and sold the car and caravan, butI wasn't made to. I have never missed a payment to Stepchange and have increased my payments as I have pay rises etc. to be honest I have earned a few quid extra in overtime and not told Stepchange, but as I mentioned previously, I have never missed a payment, so earning the odd bit of overtime has helped that, the creditors see a regular payment and everyone seems happy.
I am aiming to be debt free in just over 2 years, if I can help answer any queries I will try to.
Hope my story helps you to feel more easy about your situation. Good luck, it does get easier and the fact I have paid £20k off in 2 years makes me feel fantastic.

One last tip, make sure you are realistic with your budget, I hadn't put enough in to start with (probably because I felt guilty) but don't be afraid to give your true figures as a starting point, good luck!

Scaredofdebt_2

Thank you all so much for your messages. Must feel fantastic to be paying off the debt instead of adding too it. It is a proper emotional roller-coaster but as I read more of these threads and speak to StepChange, I feel more positive. Going to sit down with hubby at the weekend and sort our budget and start the ball rolling properly. So thanks again. I'm sure I'll have more wobbles and more questions in the month to come. Enjoy the weekend everyone.