DMP & Mutual Support Thread - Part 11

sourcrates

carbootcrazy wrote: »

Quick query, any help would be very welcome. Am fed up of constant issues with BT:eek: and want to change my ISP and phone provider asap. Does anyone know if companies credit check applicants/switchers please? Would being on a DMP with a string of defaults make any difference? Thanks:)

Thanks for the vurtual hug car boot !!

All I can tell you is I changed provider with no trouble, whilst in the middle of an IVA.

I had, I think from memory, 14 defaults on my credit file at the time !!!
Make of that what you will !!

Strathmore100

Hi Everyone,

Firstly, let me say what a real eye opener this thread has been (been lurking for a few days now). I feel that a way out of debt is possible. I'm going to post a bit of background and what my thoughts are going forward, so apologies for the wordy first post! I would welcome any analysis of what I am suggesting as some of it sounds a bit crazy to me but I can't see another way right now.

I'm 39yrs old, married with two children. For many years I had a very well paying job, it afforded us a great lifestyle and we pretty much did what we wanted and never had any debts (except the mortgage). My wife didn't have to work and I even managed to put a lot of money into savings.
This all changed around 2 years ago when my job was no longer there and the industry itself was and still is in a downturn. I had to find a way into another career with good earning prospects to service our mortgage and family expenses etc. So I invested nearly all our savings into re-training and I am pleased that I have managed to change career (got a job last year) and have good prospects again. However, I have had to start at the bottom which means a low salary for a few years.
During the past two years I have been spending much more than I am earning (note this wasn't on any extravagance, just general living costs) and have been relying on the remainder of our savings and then overdrafts and credit cards to get by. But the writing is on the wall now and I've finally maxed out my overdraft so only have credit cards to fall back on now. Currently my debt is around 16k. But I expect this to increase to nearer 20k before I can start a DMP.
Presently my salary cannot cover all priority bills and costs, I've been through every expenditure item and looked at switching suppliers, reducing costs etc and I think I can bring the outgoings down but will still be £50 more than I earn each month. Note that this does not include any payments to my creditors. My living costs are likely higher than most as for my new career I need to commute to work (140 miles each way), which I can't do every day thus rent a room in a shared house and have extra food and fuel costs whilst I am there. Moving house is not a consideration for us, our family is very settled and my wife has work.
However, I have been given a promotion at work with an effective salary increase of £300pm(take home) commencing in April 2017. I have plugged this into the SC budget planner and apportioned some of it for emergency budget planning each month, giving me a DMP payment of £114pm to offer. I know this is low, and I certainly plan on increasing this within 2 years as my next promotion at work (which is likely) will see my take home increase by another 800pm.
So I know that I can pay the debt off eventually, but right now I need to come up with a plan to keep the lights on and food on the table. Incidentally my wife is self employed with a relatively low income and her earnings pay for the children's clothes, school items and generally supplements the household income.

My debts are with Barclaycard, Halifax cc, Barclays finance loan and NatWest overdrafts.

So here's my stab at a plan to get through the next few months until the salary increase and starting my DMP payments.

1) One of the NatWest accounts is a joint account, my wife is there in name only and has not used it for over 10years, it is where my wages are paid in and has a £4000 overdraft. I want to disassociate my wife from the debt as she is very careful with money and it is not her fault that we are in this position. i don't want to trash her credit file aswell.
2) open a new bank account for my wages and priority direct debits.
3) arrange new deals for priority household bills and insurances.
4) now this is where it gets crazy (at least it looks it to me!)
Withdraw cash from credit cards to cover the following:
- top up overdraft to meet all payment obligations in December (including the credit card payments).
- set aside enough cash to pay my work related accommodation for the next 4 months (the tenancy will end then and I will be finding a more suitable alternative within the budget).
- set aside circa £600 to start the emergency fund.
5) use credit card to pay 1 year upfront for car insurance, home insurance and road tax. This will give me some breathing space whilst getting used to the budget next year and allow me to save any overtime earnings into a separate pot for renewal time.
6) mid-December. Contact SC to begin the DMP process although no payments to start until April 2017. Write to all creditors with token payments monthly until then.

I'd appreciate any thoughts on the above. Reading it back I can't believe that I am actually in this mess and that I'm now talking about withdrawing cash on a cc for the next month.

Thank you all for a great thread, I've been up half the night reading it and there are lots of very helpful people here. Good luck to you all on your journey to be debt free.

Puzzcat

Strathmore100 wrote: »

Hi Everyone,

Firstly, let me say what a real eye opener this thread has been (been lurking for a few days now). I feel that a way out of debt is possible. I'm going to post a bit of background and what my thoughts are going forward, so apologies for the wordy first post! I would welcome any analysis of what I am suggesting as some of it sounds a bit crazy to me but I can't see another way right now.

I'm 39yrs old, married with two children. For many years I had a very well paying job, it afforded us a great lifestyle and we pretty much did what we wanted and never had any debts (except the mortgage). My wife didn't have to work and I even managed to put a lot of money into savings.
This all changed around 2 years ago when my job was no longer there and the industry itself was and still is in a downturn. I had to find a way into another career with good earning prospects to service our mortgage and family expenses etc. So I invested nearly all our savings into re-training and I am pleased that I have managed to change career (got a job last year) and have good prospects again. However, I have had to start at the bottom which means a low salary for a few years.
During the past two years I have been spending much more than I am earning (note this wasn't on any extravagance, just general living costs) and have been relying on the remainder of our savings and then overdrafts and credit cards to get by. But the writing is on the wall now and I've finally maxed out my overdraft so only have credit cards to fall back on now. Currently my debt is around 16k. But I expect this to increase to nearer 20k before I can start a DMP.
Presently my salary cannot cover all priority bills and costs, I've been through every expenditure item and looked at switching suppliers, reducing costs etc and I think I can bring the outgoings down but will still be £50 more than I earn each month. Note that this does not include any payments to my creditors. My living costs are likely higher than most as for my new career I need to commute to work (140 miles each way), which I can't do every day thus rent a room in a shared house and have extra food and fuel costs whilst I am there. Moving house is not a consideration for us, our family is very settled and my wife has work.
However, I have been given a promotion at work with an effective salary increase of £300pm(take home) commencing in April 2017. I have plugged this into the SC budget planner and apportioned some of it for emergency budget planning each month, giving me a DMP payment of £114pm to offer. I know this is low, and I certainly plan on increasing this within 2 years as my next promotion at work (which is likely) will see my take home increase by another 800pm.
So I know that I can pay the debt off eventually, but right now I need to come up with a plan to keep the lights on and food on the table. Incidentally my wife is self employed with a relatively low income and her earnings pay for the children's clothes, school items and generally supplements the household income.

My debts are with Barclaycard, Halifax cc, Barclays finance loan and NatWest overdrafts.

So here's my stab at a plan to get through the next few months until the salary increase and starting my DMP payments.

1) One of the NatWest accounts is a joint account, my wife is there in name only and has not used it for over 10years, it is where my wages are paid in and has a £4000 overdraft. I want to disassociate my wife from the debt as she is very careful with money and it is not her fault that we are in this position. i don't want to trash her credit file aswell.
2) open a new bank account for my wages and priority direct debits.
3) arrange new deals for priority household bills and insurances.
4) now this is where it gets crazy (at least it looks it to me!)
Withdraw cash from credit cards to cover the following:
- top up overdraft to meet all payment obligations in December (including the credit card payments).
- set aside enough cash to pay my work related accommodation for the next 4 months (the tenancy will end then and I will be finding a more suitable alternative within the budget).
- set aside circa £600 to start the emergency fund.
5) use credit card to pay 1 year upfront for car insurance, home insurance and road tax. This will give me some breathing space whilst getting used to the budget next year and allow me to save any overtime earnings into a separate pot for renewal time.
6) mid-December. Contact SC to begin the DMP process although no payments to start until April 2017. Write to all creditors with token payments monthly until then.

I'd appreciate any thoughts on the above. Reading it back I can't believe that I am actually in this mess and that I'm now talking about withdrawing cash on a cc for the next month.

Thank you all for a great thread, I've been up half the night reading it and there are lots of very helpful people here. Good luck to you all on your journey to be debt free.

Hi and welcome to the best thread on mse...!

A quick point from me, you make reference to removing your wife from the joint account so her credit file isn't affected. Unfortunately if you have a joint mortgage then you will always be financially associated.. not sure what effect that has on her credit file but it is the same in my household. The bank may not let you change the account whilst it is overdrawn...

I have no experience of withdrawing cash etc before entering a dmp, although I had one creditor who was unhappy I had recently used the cc despite me obviously being aware I was heading for financial trouble, they did get on board but were slowest at stopping interest etc.

I am sure others will pop on soon and give you some words of wisdom...!

Puzz. x

sourcrates

Strathmore100 wrote: »

Hi Everyone,
Firstly, let me say what a real eye opener this thread has been (been lurking for a few days now).
4) now this is where it gets crazy (at least it looks it to me!)
Withdraw cash from credit cards to cover the following.

Hi,

In the months preceding my IVA, I was in a similar position to yourself, I was £57,000 in debt, disabled wife, new baby, and no money.

I'd never missed a payment on anything, and had recently got a new bank account with a £5000 overdraught.

I knew I was at the point where things had to change, I opened a new basic bank account, and transferred the full 5k into it.

That kept us going for a while until the IVA was accepted and set up, funnily enough I had a 10k loan with that bank too (they were my biggest single creditor) and they approved my IVA unequivocally.

Not proud that I had to do it, but I was desperate, so survival instinct took over, I'd do exactly the same again as well given the circumstances.

That's why I never criticise people who post similar things on here, because I've been there, and I know the fear that engulfs you.

January2015

Strathmore100 wrote: »

Hi Everyone,

4) now this is where it gets crazy (at least it looks it to me!)
Withdraw cash from credit cards to cover the following:
- top up overdraft to meet all payment obligations in December (including the credit card payments).
- set aside enough cash to pay my work related accommodation for the next 4 months (the tenancy will end then and I will be finding a more suitable alternative within the budget).
- set aside circa £600 to start the emergency fund.
5) use credit card to pay 1 year upfront for car insurance, home insurance and road tax. This will give me some breathing space whilst getting used to the budget next year and allow me to save any overtime earnings into a separate pot for renewal time.

Yes - we withdrew cash from our credit cards up to the point we went on the DMP. It was literally borrowing from Peter to pay Paul as the saying goes.

However, why on earth would you even try to make December creditor payments?

Yes - the bit above is in big and bold type - I am trying to make a strong point and don't want you to miss it

You already know you are going to default on them so why not use December creditor payments towards building up an even bigger emergency fund. Nothing bad will happen from one missed payment. Contact creditors and notify you are seeking advice regarding your debt and they will put on hold all interest and charges for 30 days anyway (and that 30 days can, and will be extended). My advice is DO NOT PAY DECEMBER CREDITOR BILLS.

Strathmore100

Puzzcat wrote: »

Hi and welcome to the best thread on mse...!

A quick point from me, you make reference to removing your wife from the joint account so her credit file isn't affected. Unfortunately if you have a joint mortgage then you will always be financially associated.. not sure what effect that has on her credit file but it is the same in my household. The bank may not let you change the account whilst it is overdrawn...
Puzz. x

Thanks Puzz. The mortgage is in my name only, but I take your point regarding the chance of not being able to remove her from the joint account whilst we have an overdraft. I can only try and see what happens.

sourcrates wrote: »

Hi,

In the months preceding my IVA, I was in a similar position to yourself, I was £57,000 in debt, disabled wife, new baby, and no money.

I'd never missed a payment on anything, and had recently got a new bank account with a £5000 overdraught.

I knew I was at the point where things had to change, I opened a new basic bank account, and transferred the full 5k into it.

That kept us going for a while until the IVA was accepted and set up, funnily enough I had a 10k loan with that bank too (they were my biggest single creditor) and they approved my IVA unequivocally.

Not proud that I had to do it, but I was desperate, so survival instinct took over, I'd do exactly the same again as well given the circumstances.

That's why I never criticise people who post similar things on here, because I've been there, and I know the fear that engulfs you.

Sourcrates, Thank you for such an honest reply. It is also nice to know that others have been in the same boat.

January2015 wrote: »

Yes - we withdrew cash from our credit cards up to the point we went on the DMP. It was literally borrowing from Peter to pay Paul as the saying goes.

However, why on earth would you even try to make December creditor payments?

Yes - the bit above is in big and bold type - I am trying to make a strong point and don't want you to miss it

You already know you are going to default on them so why not use December creditor payments towards building up an even bigger emergency fund. Nothing bad will happen from one missed payment. Contact creditors and notify you are seeking advice regarding your debt and they will put on hold all interest and charges for 30 days anyway (and that 30 days can, and will be extended). My advice is DO NOT PAY DECEMBER CREDITOR BILLS.

January2015, Yes a very good point. I don't think I will now.



So this evening I am going through all the possible D/D and SO leaving my account prior to next payday and identifying the ones that I can cull before cancelling and informing the creditors.
Do I need to write to them initially to advise this or can I call them?
What about a token payment to them all? From reading the thread I can see there is a divide of whether to do so or not. I don't know if I am brave enough to not communicate with them for the next few months.

kezzb

Really cross and panicking a bit. I have been on DMP for 6 weeks. One of my debts is my overdraft. Just tried to log in to online banking to download all my bank statements as I will need them to finalise my books for tax purposes. I couldnt log in so phoned helpline to be informed that the account has been closed. I expected this to happen but thought they would send me notification first. Ive been told I will have to go into a branch and ask for copies. This is going to cost me a small fortune I reckon! Money I have not got I had downloaded most of them onto my old laptop which has recently bit the dust.

January2015

kezzb wrote: »

Really cross and panicking a bit. I have been on DMP for 6 weeks. One of my debts is my overdraft. Just tried to log in to online banking to download all my bank statements as I will need them to finalise my books for tax purposes. I couldnt log in so phoned helpline to be informed that the account has been closed. I expected this to happen but thought they would send me notification first. Ive been told I will have to go into a branch and ask for copies. This is going to cost me a small fortune I reckon! Money I have not got I had downloaded most of them onto my old laptop which has recently bit the dust.

Put in a request for statements for the required period under the Data Protection Act. Should only cost you a tenner then. They do have 40 days to drag their feet to provide it under the DP Act though so if you need the info in a hurry you may just have to pay any ridiculous charges they choose to make.

January2015

Strathmore100 wrote: »

So this evening I am going through all the possible D/D and SO leaving my account prior to next payday and identifying the ones that I can cull before cancelling and informing the creditors.
Do I need to write to them initially to advise this or can I call them?
What about a token payment to them all? From reading the thread I can see there is a divide of whether to do so or not. I don't know if I am brave enough to not communicate with them for the next few months.

I would phone them all and advise you are in financial difficulties and are seeking advice (mention you are in contact with Stepchange - that will shut them up - even if you have only done the online debt remedy bit up to this point, that counts as contact with SC :rotfl:). You may get asked for the SC reference number - just say you haven't got that yet as you are still going through the information with them (unless of course you do have the SC ref. and can give it to them).

I wouldn't even bother with a token payment at this point. I did make token payments when we started but I've learnt a lot since January 2015 when we started.

kezzb

January2015 wrote: »

Put in a request for statements for the required period under the Data Protection Act. Should only cost you a tenner then. They do have 40 days to drag their feet to provide it under the DP Act though so if you need the info in a hurry you may just have to pay any ridiculous charges they choose to make.

That's great thank you. If I do that this week I will get them mid Jan so can get my tax return in before deadline.