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newbie to DMP

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
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timetosayenoughtimetosayenough Forumite
77 posts
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hi everyone


Contacted Stepchange last week and am waiting for pack to come by post. Anyone know how long it takes?


I've opened a new bank account with Lloyds, currently with NatWest. I have over £12,000 of debt over 7 creditors.


I've no-one I can talk to about it. I was widowed a few years ago, Mum died a few years ago and now I'm a carer for 93 year old Father. The last thing I want is for him to find out. Mentally he's alert but physically he's very frail.


I'm retired and have contacted my pension providers with new bank details. I still need to switch direct debits to new account but will do this over the coming week. I've got a loan repayment coming out on Wednesday and stepchange have said to cancel it, but if I cancel the direct debit the loan company won't be happy and my DMP isn't set up yet. Should I write and send a token payment explaining that DMP is being set up? Also I asked stepchange about setting up an emergency fund but they weren't keen on the idea. They suggested starting the DMP on 1st August. I'm going to have to send token payments anyway to other creditors, credit card payments due this weekend, they're with Nat West. My heads all over the place at the mo, can't think straight or seem to work out what to do and when.


Hope this all makes sense.


Look forward to chatting with you all.
£12,432 - debt free February 2018 :j
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Replies

  • fermifermi Forumite
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    10,000 Posts Combo Breaker Intrepid Forum Explorer Rampant Recycler
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    Welcome. :)

    In case you hadn't seen it, the DMP & Mutual Support Thread - Part 10 is also a great thread for support on these things.
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • kb_somakb_soma Forumite
    269 posts
    Seventh Anniversary Combo Breaker Debt-free and Proud!
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    Well done for starting your DMP, I am nearly at the end of mine and can't say enough good things about it. I have a debt diary here if you would like to have a look: http://forums.moneysavingexpert.com/showthread.php?t=4787573

    Also, come join us at the Mutual support thread: http://forums.moneysavingexpert.com/showthread.php?t=4988866

    Some great expert advice here.

    First off, well done for getting the ball rolling.

    I think what I did when I was setting my DMP up was:
    1. set up a new bank account that wasn't linked to any creditors.
    2. transferred all money into new bank account, ensuring that all direct debits that were paying into my account were transferred to this new account.
    3. When all paperwork was signed and sent back, that's when I cancelled my outgoing direct debits to creditors. I sent them letters with token payments telling them that I was in the process of setting up a DMP and that I would be in touch shortly.
    4. I set up my agreed Standing order with Stepchange and that was that.

    Some people set up their DMPs and cancel their Direct Debits straight away, some send token payments for a few months to their creditors whilst saving an 'emergency fund'.

    Good luck with everything, but do stop by and say hi.
    LBM: NOVEMBER 2011 || debt free date:30/06/15 || The Fighting Debt Army: #442 || Frugal Living Challenge 2018 || January 2018 Grocery £1.22/£100 ||
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K posts
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    Hi

    I think the key consideration is whether you can actually afford for the contractual loan payment to come out of your account. If it would mean you can’t afford essential household bills or living costs like your housekeeping it’s better to cancel it now.

    Stepchange may have a template letter you can use for offering a token payment while asking your creditor to hold action until your DMP is set up.


    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • sourcratessourcrates Forumite, Board Guide
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    Hi,
    Cancel the loan payment now, its just tough if the "loan company wont be happy", you have to think about your own wellbeing, not there's, nothing will happen fast if you don't pay it, you should write and offer an explanation why you haven't paid, obviously because you are setting up a DMP, creditors are obliged to give you 30 days grace in this situation anyway, so don't panic.


    Infact you should stop all non essential credit payments straight away, until your DMP is active, that is the usual procedure.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • Thank you all for your replies.


    James, I think I will pay this months payment. I feel bad enough about going onto a DMP so will pay it and start in July sending out token payments. That way I'm giving them notice before payment is due.


    KB thanks for that. It now gives me something to go on. Blimey this debt thing is so daunting. I've been going on for months just paying minimum payments on credit cards. Doesn't help that I've got elderly Labrador that needs medication and although she is insured I still need to find the money to pay for the medication and then claim it back. And that can take a couple of weeks. But she's my saviour in a lot of things so will do anything I can for her. I've asked the vet if they could claim direct from insurers and I'd pay them the excess but they refused. They said they only do it for large amounts as the insurers make them wait 30 days for payment!


    Fermi, thank you, will go and look at that thread.
    £12,432 - debt free February 2018 :j
  • sourcratessourcrates Forumite, Board Guide
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    Thank you all for your replies.
    James, I think I will pay this months payment. I feel bad enough about going onto a DMP so will pay it and start in July sending out token payments. That way I'm giving them notice before payment is due.



    OP, you are aware that creditors have to give you a 30 day grace period whilst you are setting up your DMP don't you ?


    You don't have to pay this loan payment, if you cant really afford too.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • Sourcrates,


    Sorry, missed your post cos I was replying to the others. I have thought long and hard about cancelling direct debit, think I'm just scared as to what they will do before they get letter and token payment. And also feel guilty that I've got myself into this mess. Thanks for your reply.
    £12,432 - debt free February 2018 :j
  • Me again!


    Sourcrates, so I've got 30 days grace before DMP set up. I was thinking of starting Sept 1st so I can build up emergency fund. If I send a letter tomorrow explaining I'm setting up DMP, and then follow up with a token payment later you reckon that'd be ok?
    £12,432 - debt free February 2018 :j
  • sourcratessourcrates Forumite, Board Guide
    23.3K posts
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    Sourcrates,


    Sorry, missed your post cos I was replying to the others. I have thought long and hard about cancelling direct debit, think I'm just scared as to what they will do before they get letter and token payment. And also feel guilty that I've got myself into this mess. Thanks for your reply.



    They wont do anything, you may get a letter, or phone call, you just say your entering a DMP, and you will be in touch when its up and running.
    I know it can be scary, if you've never dealt with debt before, but creditors are used to things like this, you are one of thousands who default, they are geared up for it, nothing will happen, trust me.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • kb_somakb_soma Forumite
    269 posts
    Seventh Anniversary Combo Breaker Debt-free and Proud!
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    Sourcrates,


    Sorry, missed your post cos I was replying to the others. I have thought long and hard about cancelling direct debit, think I'm just scared as to what they will do before they get letter and token payment. And also feel guilty that I've got myself into this mess. Thanks for your reply.

    When I started my DMP, I was terrified as I hadn't ever missed a payment. Creditors are very understanding and as Sourcrates says, if you can't afford the payment to the loan, then don't pay it.

    Creditors are actually very understanding when it comes to sorting out your debts.

    Ultimately, it is your decision. Like you I was paying minimum payments, but when your DMP is up and running you will feel so much better.
    LBM: NOVEMBER 2011 || debt free date:30/06/15 || The Fighting Debt Army: #442 || Frugal Living Challenge 2018 || January 2018 Grocery £1.22/£100 ||
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