In DMP - want to get out ASAP but need advice please! Considering bad credit loan??

tinkerbellkirst

The others have given good advice.

I dont see what a new loan would achieve. If you couldnt afford to repay the debt you already had and needed to put it onto a DMP I dont see how you would be able to afford to pay a new loan with most likely much higher interest in a shorter time than repaying the DMP?

If you could afford to repay a high interest loan in 5 years why not just focus on paying more to the DMP and clearing this sooner?

Getting another loan seems like a recipe for disaster to me, Id take on board the advice given. In the meantime if you want to move Id say renting out your current property then renting another for yourselves that is bigger seems like the best option.

Sazzie23

Hey congratulations on the baby on the way, I'm so glad you are looking at ways to fix the debt problems.

It's really tough on a DMP (2 years in myself) and I can understand why you want to get out, thing is though, I don't think I bad debt loan is the answer, even if you got one, and I tried to get one before I went into DMP and couldn't, but if you did, the repayments would be extortionate - not the rates they advertise at. And on this note, don't make any payments to companies who say they will find you a loan, lots of,people been burnt by these sharks terms.

So going back to what can you do....well pay off the DMP ASAP is one option, have you got any defaults already? Any that have defaulted will disappear from file as previous OP states, 6 years from default. Any that aren't defaulted, consider asking them to default and backdate it to start of DMP. If you are not sure, check noddle - it's free.

How to pay it off, well as usual, increase earnings and decrease outgoings, why not post a SOA on here for suggestions on expenses cuts.

Another option, I'm not recommending it, just a consideration, have you enough equity in current house to remortgage and clear DMP. This might mean you can go into new mortgage clean, but obviously deposit may be an issue.

Finally is partner aware of or included in DMP? If not aware, consider sharing. If not included, maybe his/her credit isn't trashed yet, don't trash it by including them on any dodgy bad credit deals and then using them to mortgage in the future. As other OP says, many things change in 8-10 years, don't be too quick to jump into something that is not a good deal for the long haul.

Jennym

Thanks for all responses. Maybe I know deep down a loan is a bad idea, I'm just desperate to see a way out. If we paid the min our debt management plan, we wouldn't actually be debt free until 2031, so we are paying over the minimum which would take the 8/9 years I mentioned, and obviously struggling in the meantime..will try and post SOA later.

Ok, so I'm going to speak with payplan today if i can as I need to clear up a few things.

1- I have constant monthly defaults on my credit file from Halifax one of my creditors- should they have just defaulted once or is this correct? If the continue doing this obviously it would prove difficult to ever clear it of my file any time soon

2 - It also says DMP on other creditors on my credit file - is this correct or should it show Arranged payment instead?

3 - if I manage to stop the monthly defaults on my credit file, will it take 6 years from date of last default to drop off?

I WILL sort this and stop stressing; it can't be doing me and baby any good

I think my next decision is DMP or IVA?! Has anyone experienced being able to get credit (I.e mortgage) following completion of IVA?

Puzzcat

Hi,


The file is marked default each month, but it is only the first one that counts as that is the start of the 6 years until it falls off.


People say that being marked AP or DMP is worse as these stay on file for 6 years from settled. I have no idea what effect this will have in the long term. I have asked BC to default me and they won't.


Definately NO to loan of any sorts, anyway you are not allowed credit when on a DMP, and the odds of getting one are remote unless they are 5000% interest which is no help anyway.


Congratulations on your pregnancy, I think you have to relax now and although you say you live in a small house, lots of people do. Its best to get the dmp completed and worry about moving after that.


Puzz. x


Puzz. x

sourcrates

Hi,
If you look at the entry on your credit file, it will give you the "date of default", so six years from that date, the default will fall off your file, weather settled or not.

IVA may be an option, again, would be on your file for 6 years from start date, after that they just fall off, as though they were never there.

A mortgage provider would ask you if you have been bankrupt or taken an IVA, or debt management in the last few years, so you may be stuffed on the mortgage front for a while yet.

HappyMJ

In 4 years (you said you've been on the DMP 2 years) once your credit is clean as that's when the defaults drop off you could then go to the bank to borrow money to clear them all in a full and final settlement offer (maybe half the remaining outstanding amount). You'll get a good low rate and can spread the payments over the next 5 years if that's what you want to do. Me...I wouldn't...it's just an option. I'd save as much as possible to use towards a house deposit.

You will be able to move and get a good prime mortgage rate then as well. Your house may be small now with another child so try and put up with it for the next four years. Another option is selling now, offering a full and final to clear the unsecured debt and renting the house you want/need for four years whilst saving as much as possible.

56978

Hi all,

Really helping someone can help me. I've been paying a debt collector for about 6 years. They have offered me a full and final settlement which would write off about £3k. I'm aware they'd still be making profit. I am in a position where, as my credit file is really great (after working really hard on it for 6 years) I could get a new loan to pay the settlement. I'm aware I'd then be paying interest which I currently don't pay but I want a genuine loan rather than paying a debt collector. The debt collector has said that I have to tell them where I'm getting the money from to pay the settlement. Do I have to tell them as they're demanding? And if I do could the fact I'm getting a new loan let them retract their offer? Does anyone know this?

redux

56978 wrote: »

Hi all,

Really helping someone can help me. I've been paying a debt collector for about 6 years. They have offered me a full and final settlement which would write off about £3k. I'm aware they'd still be making profit. I am in a position where, as my credit file is really great (after working really hard on it for 6 years) I could get a new loan to pay the settlement. I'm aware I'd then be paying interest which I currently don't pay but I want a genuine loan rather than paying a debt collector. The debt collector has said that I have to tell them where I'm getting the money from to pay the settlement. Do I have to tell them as they're demanding? And if I do could the fact I'm getting a new loan let them retract their offer? Does anyone know this?

Look up a loan for the settlement figure assuming the same or only slightly higher monthly payments.

If the amount of interest on this new loan is approaching that discount figure, it will hardly be worth doing.

If you feel on reflection that you'll continue as now for a while, and hope for a similar settlement offer later, then slightly paradoxically there is no motivation to increase the monthly payments for the time being, as this loses a small part of a future discount.

I could guess this might be why they wonder about your new source of funds, as maybe some people find their situation gradually improving and start putting money aside in monthly savings accounts to build a lump sum for settlement rather than increase the repayments straight away.

Vikipollard

Jennym wrote: »

I think my next decision is DMP or IVA?! Has anyone experienced being able to get credit (I.e mortgage) following completion of IVA?

I did a 6 year IVA 2006-2012 and although I haven't got a mortgage (it's in DH's name), we did look at a joint mortgage with his existing lender last year. They raised no objections to me being on it, though I must stress this was simply the same amount of money but in joint names. DH has never been a numpty with money and has very good payment history, which may well have been the decider. We didn't pursue it in the end (only because we had to use an approved solicitor off their list, but they couldn't say who they were, you had to keep asking and it was a real faff!).


I have, though, taken out a £7500 loan through my bank last year for a car at a rate of 5.4%, which I thought was pretty reasonable.


You will need to make your own mind up about an IVA. It was the right choice for me, but you need to be sure before you go that way.


Hope this helps.

dazla

DCFC79 wrote: »

A loan isn't what you need, take on board the advice posted.

I agree with this advice absolutely. Also there is no guarantee that creditors will accept a full & final