DMP vs Snowballing...

bsclp118

So after much weighing up the pros and cons over the last few days I've decided to send off the DMP paperwork.

I honestly don't know if I've made the correct decision or if I should have stuck it out and tried the snowballing and kept my credit score in tact. It was so difficult to know what to do, but I got very little support from my partner regarding him increasing his expenditure towards joint things like groceries so I think the choice was made for me.

Onwards into the unknown I guess....

Just wondering if anyone else is or had this dilemma and what was it for them that made the decision either way?

NoMore

Its not usually a choice, if you can afford to snowball, it means you can afford to service your debts. DMP usually means you can't service your debts under the current arrangements and so need to negotiate with your creditors.

Pixie5740

If you're struggling to meet your minimum repayments then you wouldn't be able to snowball.

I wouldn't worry too much about your credit file for the time being. It's only useful when you need to borrow money which you don't because you're a Debt Free Wannabe.

bsclp118

In my head I can meet the minimum but in reality I end up of living on the credit to get me through the last fortnight of the month so yeah. Guess I'm not sure if I should have waited a few months to see if things improve. That said, I really don't see that they will.

So yeah, DMP and bye bye to my dreams of a mortgage anytime soon but I guess that's something I shouldn't dwell on too much at this point!

Thrugelmir

bsclp118 wrote: »

So yeah, DMP and bye bye to my dreams of a mortgage anytime soon but I guess that's something I shouldn't dwell on too much at this point!

The decision you make could affect you for a very long time. So worth thinking through carefully. The lenders you default on are unlikely to forget for a very long time. Well beyond the duration of the DMP as well.

bsclp118

Thanks Thrugelmir,

On reflection I've decided a DMP isn't for me. It's going to be a frugal few months but if I can get down my balances atleast I can do the snowballing thing. It won't clear my debt much sooner than the DMP but atleast my credit rating will not be wrecked by the end of it.

Obviously if something changes work wise then I might have to rethink the situation, but for now I think the fact I've had the "lightbulb" moment, really taken stock of my finances should keep me on the straight and narrow for the next few months. No point rushing into anything too soon no matter how lovely the people at SC are!

So yes, feeling positive today :-)

sambuca9

Hi and welcome to the forum

There are lots of great people on here that can give you great advice. Its worth posting an SOA as they often highlight savings that can be made that you may not of thought of.

Good luck

bsclp118

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1995
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1995

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 220
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 50
Telephone (land line)................... 16.4
Mobile phone............................ 40
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 80
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1139.4


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
Tesco CC.......................1997......35........0
MBNA CC........................3168......48........6.5
Barclaycard CC.................8837......225.......19.9
Natwest........................8473......257.......9
Tesco Loan.....................5180......106.......8.93
Total unsecured debts..........27655.....671.......-


Monthly Budget Summary
Total monthly income.................... 1,995
Expenses (including HP & secured debts). 1,139.4
Available for debt repayments........... 855.6
Monthly UNsecured debt repayments....... 671
Amount left after debt repayments....... 184.6

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -27,655
Net Assets.............................. -27,655

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.

Dobbibill

bsclp118 wrote: »

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1995
Partners monthly income after tax....... 0

Is this just yours or OH income too?

Emergency fund.......................... 0

You need one of these - if something unexpected crops up, you don't want to put it on credit and set yourself back

Unsecured Debts
Description....................Debt......Monthly...APR
Tesco CC.......................1997......35........0
MBNA CC........................3168......48........6.5
Barclaycard CC.................8837......225.......19.9
Natwest........................8473......257.......9
Tesco Loan.....................5180......106.......8.93
Total unsecured debts..........27655.....671.......-

How much room do you have on the Tesco CC, would you be able to BT anything from the Barclaycard? Even if it's just a portion of the overall balance.

Monthly Budget Summary
Total monthly income.................... 1,995
Expenses (including HP & secured debts). 1,139.4
Available for debt repayments........... 855.6
Monthly UNsecured debt repayments....... 671
Amount left after debt repayments....... 184.6

Is this a true reflection of how much you have left? If not keep a spending diary, it's surprising how much the odd coffee here and there actually amounts to over the month.

HTH

bsclp118

Hi,

I've just done the budget for myself as me and my partner have separate finances - though he agreed to try and pay as much as he can now that he knows how much debt I am in. I earn double what he does so its tricky as I still feel I should put in more than he does towards bills and food and such. We've only been together 18 months and given my financial situation I have chosen to keep our finances separate!


Yeah, I am going to start putting £50/month away, I've opened up a savings account. Also the good thing about speaking to stepchange is that I have opened up a basic account so I should be able to just transfer my grocery and day to day money into that and be able to keep better track of my spending - it's difficult to repay an overdraft when it still says its your money. Actually now I realise I have a £700 overdraft that I have missed off that list to pay back too . So thats £15/month charges plus £10/month to pay back.

So no, £184 is not a true reflection of what I have left, there are meals at work, unexpected events and the odd drink down the pub with friends to factor in too.

bsclp118

Oh and the tesco balance is maxed out. My aim is going to be trying to improve my credit rating so I can transfer more of the Barclay balance to a 0% card I think. Now the barclaycard is closed I can't do what I stupidly did with the tesco/MBNA and start spending on it again!