DMP & Mutual Support Thread - Part 11

bsclp118

Hi Kid77,

Well at the moment I can afford to pay about 75% of the repayments each month. And after speaking to some of the creditors this morning I can see that they are going to be less than helpful when it comes to freezing interest etc because I haven't even missed a payment yet.

So I've agreed a DMP plan with stepchange - can I still change some of my outgoings? I'm sorry but the system doesn't seem fair that I will be making as much payment as I can and not getting any help from them by reducing my interest etc so maybe I will have to play the system a little.

I am worried that if it takes me 6 years to repay if they don't cancel the interest then that means 12 years before a clean credit file and therefore a mortgage.

neiljmuk

teeni wrote: »

I am with payplan and last month the boiler broke and I had to find £2400 for a new one, hubby paid his half but I had to find mine, I rang payplan as I wanted to reduce my payments for 3 months to allow me to pay the installer over 3 months, they agreed could pay 100 instead of 500 for 3 months but theyhaven't told my creditors, I have had letters from 3 of them and they have reduced my payments for 6 months to allow me to get back on my feet, Payplan have now said that I cant do that as they are not getting equal shares with the other creditors so I have decided to ring all my other credtors tomorrow and see if I can get a reduced plan with all of them for 6 months as I can then pay for the boiler and build up a emergency reserve before going back to the 500 per month payment, 2 of the creditors who have given me a new plan are Barclaycard and they have stopped interest and charges for 6 months, they had reduced to 3% anyway so this may have actually done me a favour . Self managed dmp here I come

Missed this. Thank you. Well played on your part. The thing for me is that creditors are receptive to this sort of dilemma. Was it a pain giving them a statement of expenditure etc as it's kinda difficult to provide one that is temporary (and sneakily takes in to account emergency fund building) I'd have thought?

KID77

Hi bsclp,

Yeah its unfair that the more you pay, you are penalised. BC, Tesco and MBNA have frozen interest for me as i am paying less tha 1% of the balance but i think if you pay over that then its tiered interest. I am doing my best to save each month, difficult as things always come up but although my plan is set to last 15 years, I want to make it 6 if I can. This way when defaults drop off my credit file, hopefully ill have cleared the balances, thats assuming everyone defaults me fairly soon.
Defaults are actually what you want but do mean credit file ruined for 6 years from qhen applied so quicker they are applied the better.
Its recommended you start an emergency fund so you could ask Stepchange to delay plan for 3-6 months and say next month for example that you realised you havent budgeted properly so need to change your figures. You would need to contact your creditors to let them know that you will be paying £1 for example for 3-6 months then x amount when Stepchange start paying. Someone else may offer better advice on this as I havent done it personally.
I know you are keen to get a mortgage so a dmp isn't going to help that but ihave read people with defaults from 3+ years can get mortgages, just higher interest rate.
xx

bsclp118

Yeah its difficult. I feel like I want to pay them as much as possible, I know they are my debts I want to clear them. But I really need the interest at least reduced to feel like I'm making any dent into my debt, especially given that I am forfeiting a fairly good credit rating to set up the plan

Mine and my partners finances are completely separate and he has a squeaky credit file.

Can I ask, if we were to get married (I mean this is a long way off, but given this is a long term plan I think its worth asking!), would our finances automatically be linked? I really don't want to drag him down with me!

I guess one way to get a mortgage would be to wait until he gets a higher earning job (I currently earn double what he does), save up a deposit and then he could apply without me on the application?

KID77

Yeah thats the negative to the dmp, the credit file and being prepared for it to be ruined for at least 6 years.
I dont think you become financially linked until you have joint credit together i.e. mortgage.
There is a thing on here somewhere called "stoozing" i think and that helps you work out how to clear your debt quickly assuming you can afford at least mininum payments. However I asm assuming you cant otherwise you wouldnt have looked at dmps as they are kind of a last resort.
My advice would be to accept joint mortgage is probably a no no for 6 years but at least you get rid of your debt and a fresh start. Pay a little less than 1% of the balance to each of your creditors and save the rest of what you would have paid, be strict and use this for f&f settlements and saving a deposit for your mortgage.
I know its a long read but read back through the previous thread and you will gain so much knowledge about dmps.
You could actually do it without Stepchange as they are only a middle man, a lot of people have gone self managed in order to get interest waived as you can set your own payments.
xx

bsclp118

Well the problem is I'm meeting the minimum payment on my credit cards, but then I'm putting day to day expenses on there to get me through the month, so decided I needed to take control, finally. I've been in debt for 10 years now - ever since uni. Think its time I take charge.

I have been "stoozing" for far too long, but instead of clearing my debt I just keep building it so I'm not sure that is the right approach for me right now. I shall have a ready back through the thread when I have some time. I think I'll factor in am emergency fund into my DMP, which seems fair and I haven't done as yet and see what happens.

I was so relieved yesterday after my call with SC saying it would be just over 4 years to clear my debt. They made it sound like the creditors were highly likely to reduce interest, but from what I'm reading on here thats not likely. Guess I'll just have to see what happens. Thanks for the advice KID77 though! :-)

FuzzyDF

I haven't been here for a while (have been reading through nearly all the posts)......My DMP has been running smoothly for over a year now have managed to pay off £5.5K in a year!

Unfortunately as my office has relocated my commute is costing me over £80 a week. Previously I would have fretted over phoning SC and asking to reduce my monthly payment. Bit the bullet and spoke to somebody who was so lovely and understanding.

I've shaved £69 pounds of my monthly payment, do you think that I'll get a lot of hassle from the predators? All of them have frozen interest even Hellifax!

January2015

Hi everyone

DMP now into the 6th month of a forecast 107 - only 101 to go then

Very aka NCO Shop Direct have apparently not received SC payments for July and August. This is so frustrating. SC tell me not to worry about it, Very say it's nothing to do with them and NCO are, helpfully, looking into finding the payments. They've been looking for a week now and haven't found them yet.

I can definitely see some benefits to going self managed because then situations like this wouldn't happen as it would be me making a payment to NCO and I would have the evidence of the direct payment in front of me. However I don't think we are quite ready for that step yet. I know we are committed to the DMP, but sometimes I wonder if DH totally 'gets it' yet.

Hope everyone is well. I don't post much, but I do pop on most evenings and keep up with the forum and most especially this thread.

Sazzie23

bsclp118 wrote: »

Well the problem is I'm meeting the minimum payment on my credit cards, but then I'm putting day to day expenses on there to get me through the month, so decided I needed to take control, finally. I've been in debt for 10 years now - ever since uni. Think its time I take charge.

I have been "stoozing" for far too long, but instead of clearing my debt I just keep building it so I'm not sure that is the right approach for me right now. I shall have a ready back through the thread when I have some time. I think I'll factor in am emergency fund into my DMP, which seems fair and I haven't done as yet and see what happens.

I was so relieved yesterday after my call with SC saying it would be just over 4 years to clear my debt. They made it sound like the creditors were highly likely to reduce interest, but from what I'm reading on here thats not likely. Guess I'll just have to see what happens. Thanks for the advice KID77 though! :-)

Hi Bsclp

Well done for making steps at dealing with debt, it's a challenging time and stressful at the start, but I promise you it does get better, even though we all have day to day worries, DMPers can usually see an end to it one day.

First thing I would say is, if you can avoid a DMP AND still pay off your debt, snowballing etc (use the snowball calculator) then do it, a DMP is really when other options are out. It's no good living on credit cards you never pay, and or consolidating every few years. If this is you, this is the place to be

Second, if you need a DMP, don't stress over paying the max you can afford, we totally understand that you want to pay it off, as quick as you can, and paying the most you can, cos then the creditors will be sympathetic right? WRONG, and I know this is controversial amongst DMPers, but paying less, means you get charged less.

I admit to paying less, but it's actual a circumstance in my case that I wouldn't wish on anyone, however, financially some of my debts are being paid off just as fast as the creditors have cut the interest now.
I do have an extra long DFD currently, but hopefully as I start to be able to do a bit more overtime etc, I'll be able to restore my emergency fund (you need an emergency fund) and then run crease some payments again. Also my mortgage will be paid up in about 5 years so I'll be able to throw that at the DMP, I'm pretty sure in 8-10 years I'll be done.

No CCJs have been brought against me, it's a very rare DMPer who ends up with court action, that's generally reserved for those that refuse to pay or ignore the debts. DMPers are paying it off, we just need a bit longer than was expected. It can be because of irresponsible lending and borrowings or change of circumstances or combination, either way we DMPers are the good guys and the creditors do know this, even if they don't always acknowledge it straight away.

So welcome, don't panic and feel free to ask for help, or have a rant whenever you need it.

bsclp118

Thanks Sazzie23,

Yeah I think I've finally run out of re-financing options so this is unfortunately the right option.

I'm going to add in a few things I missed off my original form when I sent it in and ask if I can add a £50/month emergency fund. I have no savings and given I'm going to have no access to credit I'm worried about things cropping up that I need to prepare for. Do you think this is a reasonable thing to put on a DMP?