Advice pls re DMP and family debt

Carla1234

Good morning

I am looking for some advice. I am aiming to pay off my debts as soon as possible and have not defaulted on any as to date.

Currently owe approx £6000 on credit cards / overdraft (to another bank) but also have 2 credit cards that my brother took out for me to consolidate other debts, totalling £5000. They are both on 0% interest and I pay them each month.

I'm beginning to wonder if a DMP would be a good idea, but where would the payments to my brothers cards fit in as they aren't in my name? Also, I'd ideally like to keep a good credit rating as may possibly have the chance to buy my house in the next 5 plus years (am in housing association currently), but then wondering if having no credit available would be better as I'm still tempted to overspend sometimes (although better than before).

Any thoughts? Also toying with idea of asking for credit interest freeze on three cards (33%) but as I am not in default I don't think they'll consider it?

Thanks!!!!

sourcrates

Hi,

You can't really pay less than the contracted payment to your creditors, and hope it'll have no impact on your credit file, it will.

You obviously feel this situation is in danger of running away from you, hence your post, you don't want to be posting again in 12 months time asking for help with 12k of debt do you ?

If you went self managed you could allocate the funds yourself, to repay the cards in your brothers name, however, that would impact his credit file, has that occurred to you ?

How does he feel about this proposal ?

MERFE

If you haven't defaulted yet and are making the payments at the moment why are you looking to move to a DMP. Has something changed?

DCFC79

Have you looked at your spending to free up some extra money ?

Carla1234

Thanks guys for responding.

I don't want there to be an impact at all on my brother as he was good enough to help me in the first place, and can't afford to have markers against himself.

I guess I was looking to put some discipline on myself - if I knuckle down I can clear the debts in 2-4 years, but I'm always tempted to spend more than I have, despite knowing its the wrong thing to do.

How do I get out of this trap before it gets worse?

sourcrates

Carla1234 wrote: »

How do I get out of this trap before it gets worse?

Stop overspending,

Stick to a budget,

Don't buy stuff you don't need,

Just common sense things like that are a start !!

Carla1234

I know.

I'm so stupid sometimes. I've cleared debt before in the past . . only to run it up again.

I've just rung Capital One to see if there was a possibility to get some of the interest reduced, and the man I spoke to is sending me a self help pack out. He said the account would be frozen for 30 days, during which I either had to fill out the income and expenditure and send it back to them, contact a DMP company or cancel the whole idea.

Do you think there is any chance they will reduce payments?

SitAndBeg

Dept Management Plan, is what DMP stands for, and Stepchange "Charity" .does this, with - it seems - the full backing of financial "guru" Martin Lewis. But why and how are Stepchange in this line of business, and who is it that actually funds them. Are they really the good for us all charity, there to help those with spiral-of-death credit card debts . On the outset it seems when you first start a DMP with Stepchange, it at least gives you a bit of breathing space, that enables you to get your finances under some sort of control. For a while it does this. But once the banks decide to: gradually-one-by-one-and-without-you-hardly-noticing pass on your debts to smaller debt collection agencies, and when these smaller friends of banks, add on their BIG admin fees, it is at this stage, maybe a couple of years down the line, that it becomes very clear that the smaller companies are not not as restricted as to how to collect debts, as their "ethical" friends over in the bank might be. Things Change. Banksters as they are now deservedly titled, like to keep themselves well hidden in this sort of "arrangement". But it is undoubtedly them, the real driving force behind Stepchange You see, on one side Stepchange help you to manage and pay off your debts [for a time], but on the other hand, they are also doing the banks a HUGE favor by chasing their debts for them, and once the banks and Stepchange allow smaller, not so ethical firms to become involved as collectors , well then, that is the time the game can and does turn really nasty, and when the heavy mob can be brought in.,without the slightest suspicion that the banks are behind all of this.

Puzzcat

SitAndBeg wrote: »

Dept Management Plan, is what DMP stands for, and Stepchange "Charity" .does this, with - it seems - the full backing of financial "guru" Martin Lewis. But why and how are Stepchange in this line of business, and who is it that actually funds them. Are they really the good for us all charity, there to help those with spiral-of-death credit card debts . On the outset it seems when you first start a DMP with Stepchange, it at least gives you a bit of breathing space, that enables you to get your finances under some sort of control. For a while it does this. But once the banks decide to: gradually-one-by-one-and-without-you-hardly-noticing pass on your debts to smaller debt collection agencies, and when these smaller friends of banks, add on their BIG admin fees, it is at this stage, maybe a couple of years down the line, that it becomes very clear that the smaller companies are not not as restricted as to how to collect debts, as their "ethical" friends over in the bank might be. Things Change. Banksters as they are now deservedly titled, like to keep themselves well hidden in this sort of "arrangement". But it is undoubtedly them, the real driving force behind Stepchange You see, on one side Stepchange help you to manage and pay off your debts [for a time], but on the other hand, they are also doing the banks a HUGE favor by chasing their debts for them, and once the banks and Stepchange allow smaller, not so ethical firms to become involved as collectors , well then, that is the time the game can and does turn really nasty, and when the heavy mob can be brought in.,without the slightest suspicion that the banks are behind all of this.

Completely disagree with this post. I am with SC and have had some debts pass to DCA's, no BIG admin charges, in fact no charges at all. It is the bank selling the debt on, not Stepchange.

Puzzcat

Carla1234 wrote: »

I know.

I'm so stupid sometimes. I've cleared debt before in the past . . only to run it up again.

I've just rung Capital One to see if there was a possibility to get some of the interest reduced, and the man I spoke to is sending me a self help pack out. He said the account would be frozen for 30 days, during which I either had to fill out the income and expenditure and send it back to them, contact a DMP company or cancel the whole idea.

Do you think there is any chance they will reduce payments?

This would ultimately be a self managed dmp and would more than likely affect your credit file as you would not be paying the contractual minimum payments. There is no harm in ringing your creditors and asking if they would reduce your interest rate, if you don't ask you don't get I think I had success once with 1 creditor doing this. But don't get talked into a payment plan if you don't want adverse markings on your credit file.

Surely your brothers credit file would only be affected if you are financial linked and as the cards are in his name and you only pay them as long as you keep paying these one's as usual it wouldn't affect him.

onedayfreedom

I entered into a DMP with Payplan, when my ex husband left me, ran up cards to fund his new romance and left me with those debts. I've paid it all back. Last payment was last month. I never missed a payment. I paid a third of my income every month religiously. I was judged to have made a mess of my life by some peeps here. Unfortunately, those comments weren't helpful, but I work for a massive homeless charity and have learned a lot about myself during that time.

Payplan were OK, but not as good with creditors, where I asked for advice when the creditor wasn't helpful. It took me 8 years to clear everything and now, it's done. My creditors sold the debts on, which was better, as they were the ones who cut the interest. Payplan will liaise with all creditors, once your financial situation is assessed and will advise on a budget for you, based in disposable income.

A DMP will affect your credit rating, but really, that's par for the course and only really affects you with credit and if you need a mortgage, or tenancy check. After six years, defaults are done. I was able to get a cheap mobile contract for work and when my car literally fell apart and I couldn't afford the repairs, I obtained a very small loan and have almost cleared that now, too. I was also able to secure property and never once involved my new husband in my credit mess.

I read a lot of comments and threads here, so that I could get advice. It's easy to tell people what you believe to be right, but you need to take a balanced view and take proper advice from those who practice in debt advice-CAB, shelter etc and understand what must be paid, as a priority and ensure you can budget effectively, to clear it all. If you're taking steps to help yourself and pay it off, then, you're doing the right thing. I was able to be interest free with all creditors, with no balances outstanding.

Payments to your brothers cards are not in law, your responsibility, as they are in his name, so you would have to negotiate with him, your payment levels.

If you don't want a default, you'll have to negotiate with the creditors. A DMP wouldn't necessarily mean defaults, but creditors will record on a credit file, that a DMP arrangement is in place, if you enter into one .

I wish you well and good luck!