Help please to decide DMP, DDP or Trust Deed?

jools35

Hi, I've been reading some posts and after months of stress and worry I've just done a check on Step Change and decided we need to do something about our debt.

We owe approx 52K on unsecured loans and credit cards. We went from having a credit card each and now it's snowballed into 3 each, upping our credit limits when able to and over the last year i've moved money from each one to pay the others. Now I'm at the stage where I can just about do a weekly food shop before direct debits are zapping my wages away.

I'm really struggling to pay the minimum payments now and I think Christmas was the final hit. I know we need to do something now but I feel like cutting up the cards will remove our security blanket...I know that sounds ridiculous as if we didn't have them in the first place we wouldn't be in this mess.

So, the point of this is for me to try and find out what route we take. Step change website recommends a DPP (we're in Scotland). I know this is a more formal arrangement than a DMP, but is this a better option to a DMP or is it more restrictive?

We have a mortgage but don't have much, if any, equity, maybe about 10k - can we keep our house if we do a DPP?

One of the personal loans we had was for the car. This means that effectively the car is an asset - will I need to sell this now?

My other half doesn't have a job at the moment and we sometimes get some money from his parents each month to help us, usually a cheque. Do we need to show this within the financials for Step Change? It's not a guaranteed payment, but i'm worried if we don't show it then when they look at our bank statements they'll think we're being a bit dodgy..

I'm also a bit concerned about the expenditure budget - there are 5 of us at home and the bare essentials only are covered on here. The plan says it'll take about 5 years to pay everything off, but what do we do meantime about birthdays, clothes etc? My kids are getting to the university stage and my youngest is still at primary school so I worry about what will happen when I need to pay for things for them too. Also if we have a emergency such as heating/appliances - we don't have any savings at all to deal with this.

I just don't know whether to go for a DDP, DMP or trust deed (that i know is even more formal) or try to wing it for a month or two to see if we can pull ourselves out of this. My head is spinning.

Any advice please?

chelle1981

Hi, well done at facing up to your situation. The first thing to do it cut up those cards!

Complete a statement of affairs and post it on here so we can see where we can help with initial savings-

Are you up to date with cc payments mortgage council tax and other bills?

It's a scary thing facing up to debt but I have found this board so helpful and a good place to go when I need some motivation-

You do read some posts on here that end up with people being harsh but in reality they are trying to help and the posts where the poster gets upset are when in reality they are not actually ready to face up to debt-

I hope that all the amazing people on this site will be able to suggest instant saving once you show us your statement of affairs xx

jazza6

Hi Jools35... years ago I had a protected trust deed (also from Scotland)..the problem - if you want to call it a problem - is that they will use your house as equity i.e. any equity will be used to put towards debts. In my situation as the house was in joint names and the debt was mine and mine alone he had to give half of the equity to the Trust Deed. It stopped people coming after us but to be honest I cannot now get put on a mortgage as the house had to be signed over to him. I think if it was me I would rather try the DMP but take advice from others on this site who have been there before and are better equipped than me to totally answer this.

jools35

Thanks for your comments.

I've gone back into the StepChange form and added a debt i'd forgotten about. The only option now says DMP but yesterday it gave DPP as an option.

I've requested all the info and have emails now with a client ref number etc, but I'll call them tomorrow to check as I think a DPP sounds better for us - I've read that once agreed the creditors cannot contact you or charge more interest.

Anyone have any idea why it's not showing as an option now? Maybe something to do with ratio of debts/income?

I also applied for a new bank account online with RBS. I applied for the basic account which said successful, then defaulted to a select account. I've done it again and have two ref numbers so will wait to see what I get through the post from them. Very confusing. I don't want a proper current account, just a basic one. Does anyone know how long it all takes? I'd really like to get this set up and be able to pay my next wage due at the beginning of March into this so I can get going with stepchange.

I've spent this morning reading through all the threads on here and feel a bit more clued up Thank you everyone.

Puzzcat

Hi,
If you are planning a dmp do try and make time to pop over to the dmp mutual support thread for a read. Loads of information available and feel free to ask any questions, there is usually someone about to help.
Puzz.x

Solwaysaver

Hi Jools,
i've been in a DPP for over a year now and it was the best decision ever for me. Creditors can't contact you and interest is frozen, the relief is enormous. To qualify for a DPP you have to be able to pay it back in a reasonable time frame, mine is 10 years and think that's about the maximum. No claim on any property you may have either. I hope to increase payments as time goes on so i can pay it all back in less than 10 years. X

National_Debtline

Hi Jools

I’m not sure why adding the extra debt meant the DPP didn’t show any more but generally it’s viewed as a better option for most people than a DMP. It may be that it would take too long to pay off with the extra debt, but you should definitely discuss it with one of the Stepchange advisers if you haven’t done so already. It’s more formal than a DMP and grants some extra protection in terms of interest being frozen, and prevention of diligence being used if the creditor takes court action.

A DPP (Debt Payment Programme) is another term for the payments which are made under a DAS (Debt Arrangement Scheme). The two terms are sometimes used to describe the same thing.

There is some good information on DAS/DPP on this website:

www.dasscotland.gov.uk

You wouldn’t need to sell your car or involve the equity in your house under a DPP.

As Solwaysaver says, a DPP can reasonably last for 10 years so if you need to budget more for your outgoings then you should do. There is usually scope to allow funds for some miscellaneous things like birthdays and occasional expenses as it needs to be realistic and sustainable.

A budget usually needs to be an average month anyway so you could think about how much you might spend on these things in a year and divide by 12. If the figures you put are too high Stepchange will let you know.

James
@natdebtline