DMP help please

Limegreen

Hello. I'm very sorry in advance for what I expect to be a rather long, desperate and needy post. I'm feeling very scared and overwhelmed at the moment.

This morning, after trying (and failing) all night to come up with a way that I can pay both my rent and my contractual debt repayments, I took the plunge and completed step changes online debt remedy thingy. Its suggested a dmp is the best option for me, which will take 2 years and 1 month to complete. Ive requested the application pack and plan to go ahead with their suggestion but I'm just wondering, what now?

Stepchanges website suggests getting in touch with all of my creditors and letting them know I am now dealing with them with regards to my debt but Im at a loss as to what to say! I know it sounds stupid but the minute i try to type anything my mind just goes blank!

Stepchange also suggest cancelling all direct debits which is easy to do for my credit cards but how to i cancel payment being taken for a loan that is connected to my current account? Do i just make sure that there is no money in that account ( i do have another account set up with a different provider for all my bills and wages etc)? What will happen when the loan payment gets rejected (tomorrow) due to no money in the account? Ive never missed a payment before and the thought of millions of phone calls and letters scares the life out of me!

Im so sorry for all the questions, im just feeling very lost at the moment.

Thank you x

sourcrates

Hi,


Well done for starting to tackle your debts.


Most people on this forum have been in your position, at some point in there lives.
You have done the right thing, by paying your rent, before your debts, any unsecured borrowing must be the last thing you pay, as they are non priority.


As regards your loan with your bank, you should withdraw all your money, so it cant be paid, you should then get yourself a new basic bank account, with a bank you have no debts with, there are usually no credit checks for these type of accounts, then use that for your day to day banking.


You wont get millions of phone calls, you may get some, but a simple letter to your loan provider, stating you are in financial difficulty should suffice.


Something along these lines :




Dear Creditor,


Re my account number : xxx xxx xxx


I write to inform you that I am experiencing extreme financial hardship at the moment, and will not be able to service my debt to you for the time being.


I am currently taking advice from stepchange debt charity on my available options, and will be in touch with you in due course.


yours faithfully


Limegreen.



If anyone continues to call, just don't answer, its easy really, block the numbers, or turn the phone off.


No need to be scared, what can they actually do ? ask yourself, missing one payment is nothing, debt collection is quite a long process, it doesn't happen overnight, you should ideally save up an emergency fund, you do this by stopping payments to your creditors for a few months, then go down the stepchange route, don't rush into a DMP too quickly, nothing is going to happen because you don't pay, not for a long while at least.

Limegreen

Wow thank you so much!! Your reply has had such a calming affect on me! I really appreciate your help with the letter.

So is it best to write to the creditors? I was going to email but i cant actually find any email addresses.

I also need to cancel a pay day loan payment thingy (im sorry, i cant remember what its called!), how do i go about doing that?

How long do you think the dmp will actually take to set up? What initial steps will stepchange require? Im eager to get started but their phone lines are not open today so i have loads of stuff spinning in my head!

Thank you so much for taking the time to answer my questions, its all very new and daunting to me!

timetosayenough

Hi Limegreen,

Sourcrates is spot on in what he says. His advice is invaluable. I am just starting out on DMP route. Should have started it on 1st Nov but due to sudden expenses am now starting it 1st December. I've been paying token payments to my creditors of £1 a month for the last 3 months and can honestly say that I have had no real hassle from any of them. Most letters have been acknowledging that I am with stepchange. I send £1 postal orders to creditors.

I too had never missed a payment and I had a loan payment due when I was really struggling so on the advice of the lovely people here I cancelled direct debit and came back and said i had done it and someone turned round and said "see, the sky didn't fall in, did it" and they were right it hadn't, it just takes courage to do these things. I just sent the letter that sourcrates has suggested and touch wood everything has been fine.

So rest assured you are not on your own, there are many of us in same situation. The people here are lovely and sooooo knowledgeable so any worries just come and chat.

Good luck

Limegreen

Thank you so much for your kind words and advice. Its brilliant to know that others who have been through it are getting on ok, it makes me feel a lot more hopeful. I just want to get it all set up now. Ive drafted a letter ready to print off at work tomorrow and send. Luckily i cant have my phone at work with me as i work in surgery so if i do get any calls tomorrow i wont know about it until then end of the day!

timetosayenough

You may not get many, I only had one creditor that rang and once I told them I was in discussion with Stepchange all the calls stopped. I did add in the initial letter that, if possible, could all correspondence be done by writing and I've not had any calls at all.

I think the other major thing is guilt. I felt guilty because I couldn't repay at the usual amount, but as time has gone by this has lessened. I certainly felt guilty regarding my old bank, I've got overdraft, loan and credit cards with them, I'd been with them for over 40 years. The thing about a DMP is that you are showing you want to repay but its just going to take that bit longer.

sourcrates

Limegreen wrote: »

Wow thank you so much!! Your reply has had such a calming affect on me! I really appreciate your help with the letter.

So is it best to write to the creditors? I was going to email but i cant actually find any email addresses.

I also need to cancel a pay day loan payment thingy (im sorry, i cant remember what its called!), how do i go about doing that?

How long do you think the dmp will actually take to set up? What initial steps will stepchange require? Im eager to get started but their phone lines are not open today so i have loads of stuff spinning in my head!

Thank you so much for taking the time to answer my questions, its all very new and daunting to me!

Ok, many questions to answer there, I`m sure others will jump in with suggestions for you.

As regards the payday loan payment, you need to act quickly on that one, you can ring your bank, and cancel the continuous payment authority to that particular creditor, but in my experience, that may not stop them from taking the payment indefinably, you need to be bullet proof here.

This is what I would do, (others may not agree, but this has worked 100% for me in the past, every time).
Continuous payment authority does not transfer between cards, its unique to the particular card you authorise for payment.

Ring your bank and report your debt card lost, your bank will send you a new card, with a new number, which your creditors will not have, when they try to debt your account, the transaction will be declined.
I would do that now, today.

Don't rush too quickly into a DMP, you need to get your head together first, and save a bit for emergencies.

Limegreen

Ok so here's what I have achieved so far today....

1) I have drafted template letters to all of my 4 creditors ( thank you soooooooo much for the template!!) which i will send tomorrow as I dont have a printer at home.
2) I have phoned my bank and cancelled the continuous payment authority thingy. I have a reference number, a name and an employee number and the phone call was recorded so fingers crossed. The very nice man on the phone did say that if the money is taken having now cancelled, then the bank will refund it which is a relief.
3) i have emailed wonga to let them know that i have cancelled the payment thingy and will also send a hard copy letter tomorrow

Not bad considering this morning i was an emotional wreck! Thank you so much for your help. X

January2015

Limegreen wrote: »

Ok so here's what I have achieved so far today....

1) I have drafted template letters to all of my 4 creditors ( thank you soooooooo much for the template!!) which i will send tomorrow as I dont have a printer at home.
2) I have phoned my bank and cancelled the continuous payment authority thingy. I have a reference number, a name and an employee number and the phone call was recorded so fingers crossed. The very nice man on the phone did say that if the money is taken having now cancelled, then the bank will refund it which is a relief.
3) i have emailed wonga to let them know that i have cancelled the payment thingy and will also send a hard copy letter tomorrow

Not bad considering this morning i was an emotional wreck! Thank you so much for your help. X

As per sourcrates excellent advice, I would also report your card as 'lost' and get a new one. That way no money can be taken through a continuous payment authority. Bank employees have been known to give somewhat incorrect advice. Be sure - get that card cancelled:)

sourcrates

Limegreen wrote: »

Ok so here's what I have achieved so far today....

1) I have drafted template letters to all of my 4 creditors ( thank you soooooooo much for the template!!) which i will send tomorrow as I dont have a printer at home.
2) I have phoned my bank and cancelled the continuous payment authority thingy. I have a reference number, a name and an employee number and the phone call was recorded so fingers crossed. The very nice man on the phone did say that if the money is taken having now cancelled, then the bank will refund it which is a relief.
3) i have emailed wonga to let them know that i have cancelled the payment thingy and will also send a hard copy letter tomorrow

Not bad considering this morning i was an emotional wreck! Thank you so much for your help. X

Limegreen,


Check out this thread, its a DMP mutual support group.


There will be lots of good advice there for you, many people in the same position as you, maybe helpful !!!


https://forums.moneysavingexpert.com/discussion/5285089


any questions, just ask there in future.

crazy_cat_lady

Just to wish you lots of luck on your journey. I'm almost at the end of mine now - and it's been a rollercoaster, but I still remember crying my eyes out sending my letters to creditors and cutting up bank cards. The only regret I have now is that I didn't seek help sooner and let things spiral so far out of control. I feel pretty good in myself these days - I am much more in control of my finances and quite excited about the day I can say I am officially debt free.