Debt, dmps and options

katsu

Have you thought of posting your income and expenditure here? There is an SOA template to do that in a sticky thread. People can advise you on savings you could make to be able to either increase your emergency funds or repay your debt faster.

bubblesgirl

Hi JD, I'm a bit of a lurker here and good luck in your DFW journey. I would also advocate a SOA to see if you could make savings

KLou

1) If our overdrafts are to be included in the debt in the plan, how does this happen in reality? i.e. if overdraft is taken out of pay we cant live
It is the DMP providers job to make sure you will be able to pay for everything using your income and not having to use your overdraft
2) Do we have to setup new bank accounts? Is there anyway to keep our existing bank accounts or at the very least stay with same provider?
Yes you have to set up new bank accounts as any bank can take any money you have with them in full repayment of a debt should you default on it - including overdrafts. You need to be with a completely different banking group.
3) How do we deal with emergencies/exceptional items? Emergency fund?!
Seriously consider when the last time an 'emergency' happened - did you have an emergency fund then? Probably not, and with credit unavailable you will just have to cut back in other areas to see you through! A skill you need to learn to remain debt free.
4) Further to point 5, in the budget we allocate a set amount of money each month for things in the future, what if these allocations have not saved enough before the expense arrives? for example we say we budget to spend £200 on car repairs each year this works out at £16.66 per month, what happens if £200 of repairs are needed in month 2?
If you have real troubles you can get in touch with your DMP provider and they can negotiate reduced payments or a payment break for real emergencies
5) In any given month can we change the debt repayment figure at all (up or down)? Not really without significant justification - and if you constantly overpay creditors may consider if you can afford contractual payments.
6) Further to point 7, if we become significantly better or worse off will this amount be changed? is it reviewed periodically? If your circumstances change your DMP provider will carry out a review with you and work out what is an affordable amount.
7) When will our credit rating improve? Asking because this directly affects what rate over what period I agree the mortgage on. Default notices last 6 years on a credit file - but this is dependent on when they are issued by the lender, which the DMP provider has no control over.
8) What happens if some or all our creditors reject our debt management plan? Your creditors are obliged to treat you fairly and will have policies and procedures in place for what is acceptable - this will be discussed with you and the DMP provider.
9) The advisor suggested in the coming weeks/months before the DMP is up and running I should consider making less than minimum payments to some of my creditors to highlight the fact I am struggling to cover costs, is this advisable?
I wouldn't do anything that would increase my debt level further to be honest but that's just me!

Hope this helps - good luck! Klou x

dumpyboy

I kept my nationwide flex account for 4 years in to my dmp no problems till the card come up for renewal then they took my over draught (not used or owed money on) cheque book down graded to cash account, do not enter in to a long term arrangement I went on to a ten year repayment plan with 2 accounts and even thou the balance is 0 they still put A ar marker and will till 2018 then it will there for another 6 years, so make sure your accounts are defaulted at the start

SmoggyTalisman

Swap to another bank as your main priority then have all incoming money go to your new bank and just have your DMP money coming out of your new bank. Leave the old one behind