DMP - some questions

somuchindebt

Hello,
I am on DMP with Step Change Charity. I am in £54.5k of debt with debt free date at the moment standing at June 2048 . I have mortgage, half of the house, or rather equity of the house belongs to my ex husband. I would like to do an IVA but my income depends on maintenance payments from my ex. Currently I am paying £141 every month towards Step Change, maintenance from ex is £300. He doesn't pay on specific date, although he has been paying for about a year now, I never know if I am going to get the money or not. My debts are because of him and I hate him for it. He is doing IVA right now and he promised that I can have his share of the house, but due to his IVA, nothing can be done officially until his IVA is completed. If I owned the house and sold it, equity would be probably slightly more than my debts. I am very tempted to sell the house now and offer the equity as full and final settlement for debts, but I would have to rent for a lot more than it is costing me now, plus I would like to wait to get my ex's share of the house. (scared he will change his mind though).
Sorry for this chaotic post, it is such a messy situation and I could write about it for miles.
Reason for my post, apart from just to talk about it, is, that I have some questions regarding DMP.

I have re-married and living with my husband. He knows all about debts situation and says that we will try and raise money to offer full and final settlements. This is a hope that keeps me sane, but at the moment we are not saving anything. He is setting up own business and if there is some spare money, all goes towards investment. His business is in services, so there is not high monthly running costs, but need to get some equipment. Also, he needs to get more customers and recommendations,

My husband and I are expecting a baby. Due date is in May. I will have around 4 months of full pay maternity leave, then I will go onto statutory pay, which is a lot lower than my current wages. When do I need to inform Step Change about it? My husband is very positive saying that we will manage but I am just very scared and worried that will not have enough money to cover the bills. This is my third baby and I still haven't got a plan how to get back to work, but it's still awhile away. Hopefully will be able to share childcare with my husband. Or even better, the business will be so good, that I will stay at home and just do the paperwork
Also, I read that many people here save money to offer full and final settlements while being on DMP. How do you guys do it? If you have a strict budget and need to review it avery year, do you just put max amounts for necessary things and save what you don't spend? Do you save it in your normal bank account?
Thank you fro reading this.

havecourageandbekind

Hello,

I'm in a similar position as you. I am on a DMP with Stepchange too and due a baby in June this year. I am planning to inform them of the situation this week hopefully as I will need to drop to £1 payments from next month until the baby arrives. I have damp in my house (and no central heating) which will need to get sorted before June. It might be worth giving Stepchange a ring now and see what they say about your situation?

I've also managed to save money while being on a DMP. I have put max amounts for necessary things and save what I don't spend. You may also find you have somewhere acquired a pet along the way or developed a need for having your clothes dry cleaned....

I don't save my money in my normal bank account because I'd be too tempted to spend it! Instead I have a passbook based ISA and I pop my money in there because it's simply too much hassle to go get it out.

NicA

Hiya,

I would advise you to look into an IVA, that DMP is crazy long and your creditors have no real obligation to remain in it. I don't know if IVA payments can be reduced during maternity leave. There is always a risk your creditors/largest creditor won't agree the IVA, but if it is agreed all creditors are then bound.

sourcrates

Hi,

There are people on this forum with debts about the same as you, who are repaying them via a DMP.
Now they may all have there own reasons for doing this, but the downside is it will take a very long while.

An IVA may be more suitable for you, but with an irregular income, that may prove to be problematic if he dosent pay you for any reason.

It's difficult to advise you because of this, maybe the best option would be to sell the house at some point in the future and clear the debt that way.

somuchindebt

havecourage, thank you. Please let me know how it went with your creditors once you offered them minimum payments. That really worries me. I had been on £1 monthly for awhile before I started DMP and they have been very understanding, hopefully they'd be good this time as well. Thank you for the advice on saving, after maternity, once my budget settled, I will have to seriously look into it, unless I go for an IVA.
NicA, yes, I agree IVA would be better solution if I could commit to it. This almost endless debt situation is killing me. It feels a bit like my life is on hold for so long. I had spoken to Step Change about it and they thought I need to be able to afford to pay slightly higher amount for my debts. But situation with maintenance payments really puts me off. If he misses maintenance payment once, then I can't pay this, plus some other bills. I feel as I would risk going bankrupt. I will consider IVA after maternity if I go back to work. At the moment my future is unknown. It depresses me, thinking of it, one way or another.
Sourcrates, yes, selling the house would give me a new start and great burden off my shoulders. But renting will cost a lot more so I think it's best to hang on to it. Then I keep reading reports about possibility of another recession coming and I think, let's get out of here, later there might be a negative equity...

somuchindebt

What is your opinion, I wonder if you have any experience. I worry that when my full pay maternity finishes, I won't be able to pa DMP. I fear that some creditors will want to take me to court and get a charge order on the house. We haven't got anything for the baby, ie pushchair, cot etc.... Should I speak to Step Change and reduce my payments now? It would need to be £1 per month. If all these problems are to come, maybe it's best if it happens earlier and at least we can get equipped for the baby, also save up so much emergency fund as possible to survive later?
If after maternity I can get back to work and afford IVA, would creditors be likely to agree if they have charge on the house?

Kitten868

I know you say that renting will be more expensive than the mortgage but it severs all ties and kills the debt.
With no debt around your neck and not relying on your ex husbands payments aren't you going to be happier?
Manipulating the figures might help in the short term but it's not going to get you anywhere with £54.5k.
Every month you will have your normal bills to pay between you and your new husband. You won't need to panic about your ex. Balance out what would be more expensive - continue as you are or as a debt free renter. Talk to your husband. You might even make more on your house than you need? Then you can start a deposit for a new home. See this as a second chance to start from scratch.
4 months full pay is fantastic for Mat leave. You've got a full year of full pay to go on before baby arrives.
Just my thoughts x

somuchindebt

Thank you Kitten, selling the house is such a big decision. I have spoken to my husband about it many times but we can't see it as a good solution. I think renting will not only be expensive, but also difficult, as I haven't very bad credit history and my husband bad credit score, but at least he will be bale to fix his quicker. I also feel that if I wait for my ex to finish his IVA, (another 5 years) if he gives me his share of the house, I may be able to get over all the hatred, as at the moment I feel so ripped off. I think realistically we will not sell int he near future.
Yes, I am so glad with the maternity pay and so lucky, as they only improved it recently, when I was already pregnant! x

somuchindebt

Have courage, have you spoken to Step Change? I was wondering how you got on?

somuchindebt

I have been thinking about getting the house valued to see how much I could get from it.
If I sold the house do you think creditors would accept full and final settlement offers and let me keep some of the money? Pay off HP on the car and have some money for rental.
My ex is currently on IVA, with his equity, would he be forced to out it towards his debts? £24k out of my debts is a joint debts, that we both guaranteed for a limited company. He has over £75k debts, so I don't think it would reduce that liability much, plus he would probably be liable for some cost with his IVA? Thank you