DMP & Mutual Support Thread - Part 11

BeingDebtFreeStartsHere

KID77 wrote: »

Hi BDFSH

I agree with Sourcrates in that you call/email SC and write to all creditors giving a brief explanation of your situation and that you need to drop to token payments for whatever time frame you feel you need. If you have been consistently paying them and you are communicating with them on this situation then I don't think they will or can have too much of an issue.

Once you have a second car sorted, re-do your budget and start up a higher payment again even if it is lower than your current payment.

Make sure you give yourself a budget with plenty of breathing space, I am not sure what sort of percentage you are paying towards your debt now but from what I have experienced and read so far, whether you pay £100 per month to a £k debt or £20 per month, seems to make no difference to how they treat you. You have defaulted on the agreement so still a bad cookie :-) You can then save the extra xx

Thanks Kid77

We know that this is the best option but still dread setting all the creditors off again with letters and calls as we have not kept to our DMP agreement.

It is so stressful!! Will def ring SC and talk it through with them then start composing letters to creditors to let them know our plan.

If anyone has a template letter for reducing to token payments I would be really grateful or a page from a previous thread with a link on?

Thanks so much everyone - you guys are the best

BDFSH x

BeingDebtFreeStartsHere

changeiscoming wrote: »

Hi ,
Hope you are all well. I am new to this and the forum, I have come to the point that I can no longer afford monthly repayments on credit cards. I have looked into the Step Change DMP and it seems to me like my only option, (literally living from wage to wage and robbing peter to pay paul). I suppose why I am writing here is for your advice. Will I automatically be accepted to start a DMP from step change and if so how long does it take to get the ball rolling? .... I also read in sc that they advise you to change banks ? how do I go about this... do I have to be honest with my bank why I am leaving? will another bank take me if I already owe 2000 quid to another bank on overdrafts and have maxed out credit cards too. ... sorry if my questions seem silly , all advice would be so helpful to me xx

Hi changeiscoming and welcome to the forum :hello:

As sourcrates has said a DMP is an informal agreement so there is no formal 'acceptance' as such. You need to agree with SC what you can comfortably afford by doing an income and expenditure form via their website if you have not done already.

If you complete their debt remedy tool online it will give you the best option for your personal circumstances, from that they will send you the relevant paperwork to complete and return and you can normally get it set up within a couple of months.

General advice on here is to delay the start of the DMP for at least 2 months to give yourself time to build an emergency fund and make token payments (eg £1 per creditor) during this time - inform your creditors that you are starting on a DMP - quote your SC reference number from your paperwork when you get it and tell them you will be making token payments.

With regards to the new bank account - make sure it is one that is not linked in any way to any of your current creditors then transfer all direct debits for bills only, not loans/credit cards. Unfortunately you may have to do this for each direct debit as opposed to a 'switch' service as these tend to transfer all the direct debits you have. You dont need to tell your bank you are leaving. I had a big overdraft on my previous bank account and was still accepted for a basic account (no overdraft) with another non-linked bank.

Everyone is so helpful and friendly on here - feel free to post questions as you go through the process. There is always someone on here that will be able to help you - best forum on MSE!!

Good luck!!

BDFSH x

sourcrates

BeingDebtFreeStartsHere wrote: »

If anyone has a template letter for reducing to token payments I would be really grateful or a page from a previous thread with a link on?

Thanks so much everyone - you guys are the best

BDFSH x

This is the National Debtline one :

https://www.nationaldebtline.org/EW/sampleletters/Pages/Token-payments-or-no-offer-of-payment-(sole-name).aspx

BeingDebtFreeStartsHere

sourcrates wrote: »

This is the National Debtline one :

https://www.nationaldebtline.org/EW/sampleletters/Pages/Token-payments-or-no-offer-of-payment-(sole-name).aspx

Fantastic - thanks so much sourcrates x

Boldhoof

Jon81 wrote: »

friend is moving out of their currently mortgaged property to buy a new property as a cash buyer with their partner. They'd like to rent out their current property and we've potentially discussed renting from them.

Could I ask, if people could list out considerations which we as tennants and them as landlords should bear in mind so as to keep everything friendly and happy from day one should we do it

For me personally this could provide a bigger property, cheaper and would allow me to reduce my dfd by some considerable amount

First things first as you say it is mortgaged property. They need to tell the mortgage company that they are renting the property out, as not telling them could result in charges or even the bank asking for all the outstanding money. They will also need to get landlord insurance, they are also responsible for yearly gas check servicing and must supply you with a gas safety certificate.Then create a Assured Shorthold Tenancy Agreement which should list all the responsibilities of both the Landlord and the Tenant.The rent per calendar month and if this includes any bills ie Council Tax.The bond which can be a months rent in advance or 2 months, this has to be kept in a special scheme, not in their bank account.You will want to get your own insurance for your belongings.

They should make sure that all utilities that you are responsible for are in your name. They also need to understand that a normal Assured Shorthold Tenancy Agreement runs for 6 months. They cannot just turn up at the door and tell you to leave, they will need to give you the required notice, if you fail to leave then they need to apply to County Court and so on. Be worth seeing if the local council do any training events for private Landlords.

Hope this helps you both.

Sazzie23

changeiscoming wrote: »

Hi ,
Hope you are all well. I am new to this and the forum, I have come to the point that I can no longer afford monthly repayments on credit cards. I have looked into the Step Change DMP and it seems to me like my only option, (literally living from wage to wage and robbing peter to pay paul). I suppose why I am writing here is for your advice. Will I automatically be accepted to start a DMP from step change and if so how long does it take to get the ball rolling? .... I also read in sc that they advise you to change banks ? how do I go about this... do I have to be honest with my bank why I am leaving? will another bank take me if I already owe 2000 quid to another bank on overdrafts and have maxed out credit cards too. ... sorry if my questions seem silly , all advice would be so helpful to me xx

Hello and welcome :wave:

well done for facing up to a tricky debt situation, so glad you found this forum before you started your DMP, I was a late-comer and missed out on some crucial information, such as the emergency fund etc.

My advice (3rd year of DMP and a long time to DFD (debt free date).

1. Don't make your budget so tight you have to live miserably and give up stuff that's important to you. Creditors won't care if you pay them £5 more a month, make it work for you.

2. You don't have to tell the bank anything, open your new account, then contact the direct debits , eg gas and electric and ask them to switch your direct debits to new account. Remember you don't switch your credit card or loan accounts.
When everything is set up, then tell the bank you want to close the account but the debt is being handled by stepchange. Make sure you cancel any unwanted direct debits including credit cards and loan accounts at this point.

3. Check you are receiving all tax allowances, PPI claims or any other income boosters and are getting the best deals on utilities etc. Also make sure you account for things like prescriptions and new specs in your budget, otherwise it's tough to find the money if they crop up.

4. Any questions on here are good questions, we've all started out at one time and we don't judge about how or why you're here. If you can find the time to read through this thread (part 11) and some of the previous ones people say they've found it helpful.

Glad you've found us, this is the start of a new chapter of your life.

Karen777

wise words as ever - do what she said everyone!!

Karen777

Jon81 wrote: »

friend is moving out of their currently mortgaged property to buy a new property as a cash buyer with their partner. They'd like to rent out their current property and we've potentially discussed renting from them.

Could I ask, if people could list out considerations which we as tennants and them as landlords should bear in mind so as to keep everything friendly and happy from day one should we do it

For me personally this could provide a bigger propety, cheaper and would allow me to reduce my dfd by some considerable amount

have some difficult conversations up front and before deciding anything - what state is the property in, will they be doing any maintenance - are all the appliances safe (gas boiler etc) who is responsible for what? In a normal landlord/ tenant situation, landlords are responsible for disrepair and also have to put your deposit in a government backed scheme by law.

will you get a contract - agree terms, rent, deposit etc - will it be officially rented out? will there be any issues with their mortgage company? are they behind on payments? if it will be rented officially they need to do certain things legally - if it's not official what happens if one of you wants to end the agreement - basically think of all the things that might go wrong and decide what will happen and how you will manage each one - things like insurance - if you damage something which you can't afford to repair, if they are not officially renting, their insurance claim will be fraudulent (possibly). what if they suddenly want to sell this property? how will you feel about inviting them round as friends when they are also your landlord?

how secure and long standing is your friendship? be very careful and sure that this is what you want to do before proceeding.

make_the_change

Thanks for all the feedback, I haven't managed to get online over the weekend as been busy and worried about finances again and what will happen. I was starting to sleep better but now I just lay awake worried. How long have people done token payments for typically and what's happened in that time? I can feel my stress levels increasing and my anxiety coming back.

Puzzcat

make_the_change wrote: »

Thanks for all the feedback, I haven't managed to get online over the weekend as been busy and worried about finances again and what will happen. I was starting to sleep better but now I just lay awake worried. How long have people done token payments for typically and what's happened in that time? I can feel my stress levels increasing and my anxiety coming back.

Hi,

I did token payments for 3 months. I wrote to the creditors every month and included a token £1 payment whilst I set up my dmp with Stepchange. I got a few phone calls and lots of letters mainly computer generated one's and my debt went up by about 1% overall which is quite usual in the set up process, other than that not a lot..!!

Love Puzz. x