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Can I add new debt to a Debt Management Plan?

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Can I add new debt to a Debt Management Plan?

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
3 replies 1.7K views
RockiRocki Forumite
2 posts
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hi all, new here and hoping you can help out. :)

I have a debt management plan with Stepchange, and have been with them for around 6 years or so now, and gradually managed to reduce my old debts. Meanwhile, we wanted to attempt to rebuild our credit rating, and did so by getting a high interest rate credit card around 3 years back. Things were fine, and we managed with that ok - and took on two more credit cards with a regular low interest rate.

I used these cards to set up a business, and we purchased a few more things on them than we should have. However the combined debts were well within what we could afford each month, and we were trying to be responsible with our debts.

Recently however, I have taken a significant hit to my monthly income, and can no longer afford these debts. We no have around £400 per month more going out than coming in.

My question is, how will Stepchange react if I ask them to add these new debts to the management plan?

Thanks so much for any help.

Replies

  • edited 30 June 2015 at 4:35PM
    National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K posts
    ✭✭✭✭
    edited 30 June 2015 at 4:35PM
    Hi Rocki and welcome to the forum.


    Standard terms of a Debt Management Plan are that you seek the express approval of the debt management company before applying for/taking out any further credit - I'm assuming you didn't do that here? In other words, Stepchange could elect to withdraw their services, as you will have breached your agreement with them. It's not certain and I can't speak for them but that is a very possible outcome.


    The bigger question is how you best deal with the overall debts following these changes - perhaps a DMP is no longer the most appropriate route. Could you perhaps post a Statement of Affairs on here? http://www.stoozing.com/calculator/soa.php


    Dennis
    @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
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K posts
    ✭✭✭✭
    I should add that if you are still running a business, you may benefit from speaking to our colleagues at Business Debtline:


    www.bdl.org.uk


    Dennis
    @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
  • edited 30 June 2015 at 9:37PM
    RockiRocki Forumite
    2 posts
    edited 30 June 2015 at 9:37PM
    Thank you for taking the time to reply. Here is my info:

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 870
    Partners monthly income after tax....... 130
    Benefits................................ 1049
    Other income............................ 0
    Total monthly income.................... 2049


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 0
    Rent.................................... 750
    Management charge (leasehold property).. 0
    Council tax............................. 144
    Electricity............................. 70
    Gas..................................... 80
    Oil..................................... 0
    Water rates............................. 40
    Telephone (land line)................... 0
    Mobile phone............................ 0
    TV Licence.............................. 0
    Satellite/Cable TV...................... 0
    Internet Services....................... 50
    Groceries etc. ......................... 400
    Clothing................................ 20
    Petrol/diesel........................... 130
    Road tax................................ 20
    Car Insurance........................... 40
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 24
    Pet insurance/vet bills................. 14
    Buildings insurance..................... 0
    Contents insurance...................... 14
    Life assurance ......................... 0
    Other insurance......................... 17
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 5
    Entertainment........................... 6
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1844



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 0
    Other assets............................ 0
    Total Assets............................ 0


    No Secured nor Hire Purchase Debts


    Unsecured Debts
    Description....................Debt......Monthly...APR
    Credit Card - New..............3200......150.......0
    Credit Card - New..............1600......60........0
    Credit Card - New..............2600......60........0
    Loan...........................1000......10........0
    Credit Card - Old..............1100......12........0
    Credit Card - Old..............1100......12........0
    Loan...........................3600......37........0
    Total unsecured debts..........14200.....341.......-



    Monthly Budget Summary

    Total monthly income.................... 2,049
    Expenses (including HP & secured debts). 1,844
    Available for debt repayments........... 205
    Monthly UNsecured debt repayments....... 341
    Amount short for making debt repayments. -136


    Personal Balance Sheet Summary
    Total assets (things you own)........... 0
    Total HP & Secured debt................. -0
    Total Unsecured debt.................... -14,200
    Net Assets.............................. -14,200


    Created using the SOA calculator at stoozing.
    Reproduced on Moneysavingexpert with permission, using other browser.
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