To DMP or not to DMP?

Dizzig87

Hello!
I'm new here so please be gentle. My husband and I are both full time employed and after calculations with step change have worked out we are £53k in debt!!! :eek:
We do not have a mortgage and currently have never failed to pay the monthly minimum but as a result we can't afford to live. It's only the 9th of the month and we have £40 to last us until payday with 2 young children but all our bills are paid.
The sleepless nights has made me realise that something needs to be done about this but we are scared.
Step change suggested a DMP online but the fact the creditors can chase you and ultimately take you to court scares me... A lot! I've recently been diagnosed as epileptic and stress is a major trigger. Obviously I'm stressed now but at least I'm not defaulting.
The DMP says we can be debt free within 4 years 8months as we earn a good wage each so can pay £1,100 a month to the plan. We have requested paperwork but I'm after people's experiences. Is a DMP the right thing to do?
Both my husband and I have jobs where bankruptcy would cause a huge problem and an IVA would also probably cause us a few issues but we are treading water... JUST!
Any help, advice or encouragement would be great right now. Thank you!

January2015

I personally would go with the DMP option. It's what I did almost one year ago.

I won't say creditors never threaten or take you to court. The standard letters we've had have all mentioned the possibility of court to recover the debts but ten months into our DMP everything is ticking along nicely. All creditors, and subsequent Debt Collection Agencies who have bought the debts from original creditors, have bee very supportive and helpful.

IVA or bankruptcy would mean job loss for me - so DMP was our only option, despite the level of our debt and the timeframe to clear it.

If you go for the DMP I would make sure you give yourself some wriggle room to live in the figures, especialy with 2 young children. Make sure you leave yourself enough to allow them to go on school trips or have the odd treat. It doesn't matter if it takes a bit longer to clear the debt - you will feel defeated and depressed if you are scraping pennies together through the DMP journey if you can't have the odd luxury or treat.

Ellieseleven

I can fully understand your nervousness about going into a DMP and I can remember feeling exactly the same as you are now. We were 46k in debt, never missed a payment on anything but had no money left to live.

We finally took the plunge and we are now five and a half years in. Our credit rating is trashed but we sleep at night and we have a realistic budget that allows us the odd treat now and again. The end is now in sight for us and out total debt is now under 10k, our original debt free date was 11 years plus but we are on course to be debt free by the end of 2016.

I would recommend building up a decent emergency fund for the times when the unexpected happens and you don't have credit to fall back on.

A DMP is not for everyone but for us, it has been our saviour. We have learnt to budget properly and have a bright future in front of us.

Good Luck whatever you decide to do.

Ellie x

KID77

We have just recently started a dmp as where in a similar situation to you 6 months ago.

What i would say is that your credit file will be ruined for 6 years at least and creditors dont always freeze interest if your monthly payments are still high which yours seem to be. As ridiculous as it sounds, you may need to lower your payment and give yourself some wiggle room for emergencies.

People will probably frown upon us as we could afford to pay more to our debt each month but instead we are putting this away in the hope that we can do settlements in 5-6 years time. All our creditors have frozen interest and been excellent so far, life is much better than it was 6 months ago however every now and again I have a little freak out about how stupid we have been and the fact we are stuck on a svr mortgage with no hope of changing for at least 6 years :-(

Read through as many of the DMP mutual support threads as you can as this will answer all your questions plus questions you didn't know you had, invaluable source for anyone considering or on a DMP.

Good luck
kid xx

crazy_cat_lady

I have just finished 5 and a bit years of a DMP with Stepchange and I am thrilled to be debt free. You will feel a lot better once you start. Honestly

freshcotton

A DMP was the best thing I did back in 2009. I was like you, simply couldn't afford to make my payments and frankly had no other choice, but it took away the stress and I felt in control.

It effected my credit rating but I managed to get a mortgage eventually.

I would give it serious thought and don't worry about letters etc. If you have no assets then all they can do is accept what you can afford.

Good luck

Dizzig87

Thank you so much for your replies! It really is so nice knowing we are not alone. With regards to credit rating, I think mine is shot anyway to be honest!
Doing the budget thing we would have £600 left each month after paying £1,100 on to a DMP and paying our other bills. We currently live on about £300 a month and we have to pay for food and fuel for the car. So we will certainly have more than we do at the moment.
How common is it to have a ccj taken out against you whilst on a DMP?

chester81

Well done for taking the first steps. I started a few months ago owing 40K so I know how daunting it feels when you finally face up to it. I don't have any advice to offer other than use this forum for support and tips!

You are certainly not alone! One of the things that I have learnt is that there are SOOOO many people in debt. It's just not something that is really discussed.

I wish you well

sourcrates

Hi,

Ok, all these acronyms can be confusing, a DMP is an informal debt solution, wearby you repay what you owe, at a reduced rate, if the more formal solutions will cause you problems job wise, then you have little choice to be honest.

As long as you are making some kind of payments to these debts, it's unlikely the creditor will opt for legal action, and as you have stated, you can make a fairly substantial monthly payment here.

You obviously need to address this issue, and the DMP route seems like your only viable option, you simply can't be left without money to eat etc, so it's a no brainer for me.
You are lucky in the fact you have such a substantial amount to throw at your debts, I would say get on with it !!!

Little_Miss_Sunshine

Hi. We've just begun the journey. We owe £57k. The last week has being spent writing letters, tracking down account numbers - top tip write down card numbers before you cut all your cards up! And opening new bank accounts. But I feel better than I did last week.
Keep posting

gettingtheresometime

I still have some way to go but I can see a glimmer of light of a very long tunnel.

Most of my debt has been repaid on an informal dmp plan with the various creditors...without this I think I would have sunk without a trace years ago.

I may be wrong with this but do you have to default on your debts before a dmp can be set up? After all what incentive is there for the creditor to accept the dmp? Will trash your credit rating but I guess you wont be rushing to get more debt any time soon