My Debt Dilemma

benjamin85

Hello everyone..

First of all, I commend anyone tackling their debts head on. It is great to see a lot of people doing all they can to agree affordable re-payments, not bury their hand in the sand and get lives back on track. Currently I'm doing just this but I can't help but feel I'm making a big mistake..

I've been dealing with StepChange for the last 3 / 4 months making regular monthly payments of over £400 a month whilst on their DMP. I have unsecured debts of just over 16k with a variety of horrendously shoddy lenders (George Banco, 118 Money, Oakbrook Finance plus several other payday loans). All of these have particularly bad APR's, like really, really bad. I think the amount I borrowed off all these lenders was probably only around 7k but I'm obviously paying back via the DMP the amount I agreed to pay back when taking out the credit agreements.

Ever since I was 16 (I'm now 31) I have had a crippling gambling addiction which as much as I have fought through counselling, residential courses, anti depressants, support of loved ones and total honesty it still continues to blight my life. Unsurprisingly my accumulation of debts this time round came through another splurge back into gambling hell - which lasted probably around 5 / 6 months. Constantly losing my whole pay packet in a day and then borrowing off anyone who would give it to me to pay rent, buy food etc etc.

Around April, I had so much owed in monthly amounts to these lenders I had no choice but to turn to StepChange and try and get this sorted. Payments back are going well with them and I'm in a really good place with my gambling and life in general.

However I can't help thinking I'm making a BIG mistake. I'm seeing £400+ fly out of my mediocre salary every month whilst my credit report is left in tatters anyway. I'm still getting hassled by creditors daily who are unhappy with the amounts they are receiving through StepChange and I'm not going to be debt free until 2020!! And even then my credit report will still be horrendous and a long way from allowing me to think about ANY kind of credit. I hear all these worrying stories about people getting turned down for mortgages with 1 missed payment of the smallest thing!!

I have literally nothing to show for myself other than the clothes on my back. No house, car, furniture or fancy phones / laptops / electronic equipment. Nothing. With the help of my loving partner this £400 could be getting locked away from my dangerous hands and help me build for a future.

I know the morality of what I'm thinking is wrong but realistically paying back what I owe isn't going to help my credit file (it's ruined until these creditors disappear off it) so I can't help think I should save this money, live on the breadline like I'm currently showing I can do and then just deal with an awful credit rating and hassle from debt collectors. All the debts are unsecured - I had nothing to secure them on!!

Sorry to go on.. :sad:Thanks for listening.

cakeforbrains

£400 a month for five years is £24000. i don't know anything about DMPs, but is that what you're expecting to repay?

Have you thought about going bankrupt?

benjamin85

The debt free date has actually changed on the DMP. It's the start of 2019. But still.. My dilemma remains.

I don't know if going bankrupt is the answer? I haven't explored that avenue at all.

bsclp118

Can you meet the minimum repayments on the debts? If not I'm afraid a DMP probably sounds like the right plan - though I have no idea about more formal arrangements such as an IVA though so hopefully someone will be along to advise on that.

Just want to say congrats on facing up to your gambling and trying to tackle the debt. Hopefully your getting some professional help re the gambling and things only get better from here for you xx

[Deleted User]

Ouch what you are paying to Stepchange is practically just shy of my hard barter £430 rent for a month! was that your choice? don't know about 'horrendously shoddy lenders'!! there can't be a new breed of money zappers... I remember someone turned away from the CCCS for a plan back in the day so this doesn't fit with the actions of a good cause

Can you request to pay less on the debt management plan? you are right £400 is a helva lot - or is it that you want it paid off quicker?
Have you displayed to them how you feel? paying less would least give room for an occasional treat so you find you could become less embittered straight away, people only get instant relief with bankruptcy for I'm not sure that it does pave the easy life under such scrutiny - regrets just as easy as morality

If you were to save at this moment in time, would it not be easy access temptation to cash? that's how I'd try to look at it unless you can get Stepchange to look at other solutions? if you are earning national minimum wage - my apologies but then there is something wrong with the system!

sunshine81

it sounds like you're asking whether you're better off just not making any payments and letting everything end up being written off? I doubt that's a better option in terms of improving your credit file quicker, but hopefully someone who actually knows the answer to that will post here soon.

I don't know if this link is helpful in the meantime... https://www.gov.uk/options-for-paying-off-your-debts

sourcrates

Look into doing a DRO (debt relief order) on October the 1st, the limit is rising to 20k so may be suitable for you.
Other criteria apply as well, more info here :

http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx?WT.srch=1&WT.mc_id=288026&WT.seg_1=dro&gclid=CLPiiLvewscCFYu4Gwodd38E_g

pmlindyloo

sourcrates wrote: »

Look into doing a DRO (debt relief order) on October the 1st, the limit is rising to 20k so may be suitable for you.
Other criteria apply as well, more info here :

http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx?WT.srch=1&WT.mc_id=288026&WT.seg_1=dro&gclid=CLPiiLvewscCFYu4Gwodd38E_g

If Step change have worked out that he has £400 spare cash per month then a debt relief order isn't going to be a possibility.

fatbelly

The major options appear to have been covered

1. a dmp at £400+ for 3.5 years

2. bankruptcy - which has £705 fee and may result in an IPA for £400+ over 3 years

3. a dro if an intermediary assessed your surplus income as <£50 per month, which seems unlikely

4. run away and see what happens


As this is a debt-free wannabee forum, we're going to say (4) isn't going to work. They may (some of them) eventually become unenforceable after 6 years but not extinguished (unless you live in Scotland) as in insolvency or by full payment.

As long as (1) is affordable, and it seems that it is, then it may be the best option.

System

cakeforbrains wrote: »

£400 a month for five years is £24000. i don't know anything about DMPs, but is that what you're expecting to repay?

Have you thought about going bankrupt?

If you go bankrupt, you will have learnt nothing. Easy come easy go. In my opinion, you need to feel this 'hurt' for a good while to allow you associate your actions with the consequences. This debt is a life lesson worth swallowing...

TakeAwayKing_2

If you have £400 available to pay your creditors, you pay £400 to your creditors.
Whether it's voluntarily through a dmp payment, an iva contribution, an ipa in bankruptcy or taken by force in bky by way of an ipo