Starting DMP

Constantine67

Hi everyone,

I have finally stopped sticking my head in the sand and as my wife has been suggesting for ages, will shortly be starting a DMP. Over the years we have managed to build up debts on cards then foolishly taking out loans to pay these off. It isn't totally to do with spending habits ( we don't have any fancy new things like cars etc).. however it's obviously mismanagement of money.

We are both self employed and when people are late paying we took money out on credit cards. Once this started to happen it snowballed. We don't have any savings so it got worse and worse.

Our debt free date is 9 years away, however hopefully we will be able to reduce this by overpaying into our plan. I feel very down. We've failed. How can people afford to go on holidays etc and we can't. We haven't had a proper break apart from Xmas for about 9 years. Of course it's our fault and no one else's but I'd like to know how people have got on with their lives with a DMP?

My biggest worry isn't the fact that our credit rating will be affected as last thing we will ever do is get credit! However as we are in our 50s and on an interest only mortgage the plan was to try to switch to a decent mortgage. Obviously that's gone out of the window now!

Anyway it would be nice to hear how people have got on with their lives if that makes sense?!

Many thanks

EssexHebridean

Can't answer the questions specifically relating to a DMP, but you haven't failed. You've made mistakes, yes, but you've seen these for what they were, and are now dealing with them - that's a pretty big deal to be honest, so well done!

I take it you've established where and why your overspending in the first place happened? The budget tool on here is pretty awesome and a full SOA will potentially show you where there is wriggle room for savings to be made, also. Any possibility of either or both of you earning a second income for a while to chuck at the debts too? Even stuff like surveys can make a difference.

DCFC79

Yes your credit rating will be affected but it isn't seen by lenders just you only. Entries will be added to your credit files saying you defaulted.

Pinkycmm

Hi
I've never posted on here before, in fact I've only just now accessed this forum for the first time today, but I wanted to say Constantine67 that you haven't failed, you've done the right thing. so many people are so scared to start sorting it, they never do
I've never had any mental health problems and a was on my knees rocking back and forward telling my own mother I was gonna kill myself, the night before I phoned my (now) dmp provider.

My husband and I ended up £54,000 in debt because of self employment, we tried and tried to keep going, we paid our staff a decent living wage while we lived on credit cards and overdrafts (add to that the business loan) until one day we had to go in to work one day, just to lock up for good.
The dmp was the best thing we ever did.
I still cry on the phone to them every year at my review, but that's just because i hate talking about it (i'm crying at work now!! lol) but they saved my life. they plan it all so you can live again, the even budget in hair cuts lol)

we have been in it 5 years now, and at the start our completion date was 36 years!!!! today it 11 years and later this week i'm going to make it 8 years!!!
My husband who is clearly named on the dmp currently has a "good" credit rating (use Noddle.co.uk for a free check) and we have just got a mortgage in principle, there are companies out there that arrange mortgage for ppl in dmps, naturally its a bit more expensive in terms of interest rates etc, but it didn't take much looking to get one that we can afford.

and in terms of credit report I only have one 'default' listed against me that was done by one company right at the start of my dmp, even though we owe about 15 companies, so in 2 years time (when that default "has dropped off") my credit rating will be better, and i can still currently get insurance policy's (basically a small loan) phone contracts and I've even got a credit card for bad credit history just to help rebuild my profile a bit.
These specialist mortage companies dont even look at your credit score, they know you have a 'history' that's why you've gone to them, they look at affordability

The one other thing i will say is dont get talked into an iva (SPECIALLY not with an instrest only mortgage) my dmp provider has for the past 5 years said they dont recommend one, but now somethings changed and they have emailed me telling me they want me to go into one, I've done my research and I will be standing my ground and pointing out the V stands for voluntary, stick with a dmp while ever you can. I know people who are waiting the day they can file for an iva, but they are not the golden ticket they are sold as

sourcrates

Pinkycmm wrote: »

Hi
I've never posted on here before, in fact I've only just now accessed this forum for the first time today, but I wanted to say Constantine67 that you haven't failed, you've done the right thing. so many people are so scared to start sorting it, they never do
I've never had any mental health problems and a was on my knees rocking back and forward telling my own mother I was gonna kill myself, the night before I phoned my (now) dmp provider.

My husband and I ended up £54,000 in debt because of self employment, we tried and tried to keep going, we paid our staff a decent living wage while we lived on credit cards and overdrafts (add to that the business loan) until one day we had to go in to work one day, just to lock up for good.
The dmp was the best thing we ever did.
I still cry on the phone to them every year at my review, but that's just because i hate talking about it (i'm crying at work now!! lol) but they saved my life. they plan it all so you can live again, the even budget in hair cuts lol)

we have been in it 5 years now, and at the start our completion date was 36 years!!!! today it 11 years and later this week i'm going to make it 8 years!!!
My husband who is clearly named on the dmp currently has a "good" credit rating (use Noddle.co.uk for a free check) and we have just got a mortgage in principle, there are companies out there that arrange mortgage for ppl in dmps, naturally its a bit more expensive in terms of interest rates etc, but it didn't take much looking to get one that we can afford.

and in terms of credit report I only have one 'default' listed against me that was done by one company right at the start of my dmp, even though we owe about 15 companies, so in 2 years time (when that default "has dropped off") my credit rating will be better, and i can still currently get insurance policy's (basically a small loan) phone contracts and I've even got a credit card for bad credit history just to help rebuild my profile a bit.
These specialist mortage companies dont even look at your credit score, they know you have a 'history' that's why you've gone to them, they look at affordability

The one other thing i will say is dont get talked into an iva (SPECIALLY not with an instrest only mortgage) my dmp provider has for the past 5 years said they dont recommend one, but now somethings changed and they have emailed me telling me they want me to go into one, I've done my research and I will be standing my ground and pointing out the V stands for voluntary, stick with a dmp while ever you can. I know people who are waiting the day they can file for an iva, but they are not the golden ticket they are sold as

Hi,

Welcome to the forum.

Some good points you raise there.
IVA's are not for everyone, but can work well in some cases, especially if you have a lot of debt.
I really hope you are not with a fee charging company for your DMP ?

Pinkycmm

Hi , nope its not a fee charging one. its Payplan, they seem good upto now (except for a bit of pressure to file)

hopefull1

Hi

You are not a failure many people have been in your situation including myself. Me and my husband had £78,000 of debt and an expected debt free date of 10 years. We worked hard had no holidays only bought essential items and cleared it in just under 7 years.

We used cccs and found them to be very helpful and most importantly non judgemental.

We had no trouble with any of our creditors they all accepted the payments and we just had the odd letter asking for a review and cccs dealt with these for us.

Do not beat yourself up about it you are doing the right thing and paying it back at a rate that is affordable for you.

Good luck with your journey and keep looking on forums like this as i found the support from people on here very comforting on my dark days.

Constantine67

Thanks for everyone's replies. I haven't had chance to come on here past week.

We've set up a new bank account and have now transferred all our direct debits for household bills etc

andyfromotley

Hi,

you have had sound advice about your DMP. Well done on starting to sort it out.

Just a few unrelated things. Holidays - Sun cheap breaks - they can be fab. Camping can be super cheap and a terrific holiday (people will lend you the stuff that you need).

You need to work on a plan for your house. Do not bury your head in the sand on this, its a ticking time bomb.

Try not to worry about how you got here at this stage of your life. I am 49 and i am certain that if i had learned to handle my money like i do now when i was 18 i would now be a millionaire. But I didnt and i'm not. We are where we are and have to make the best of it. Look forward not back!

Puzzcat

Hi and welcome..

For all things dmp, do drop over to the dmp mutual support thread.. that's where we all hang out..!

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

Love Puzz. x