I want to stop drowning

charlies_tribe

Hi, i just wanted to post as your diary was one of the first i read when i first started my diary and have just read the last few pages of your diary. I have just filled in a stepchange form online out of curiosity for our own debts and after putting in essential costs, when it gets to food, clothing, medical etc.. it gives a button where you can see what they suggest for a family of your size. Using the buttons to put everything up to the highest they suggest might give you the extra needed to pay back family. Although at the end it just told me to ring them without any suggestion of what they might offer. But it'll give you an idea of what they allow.

Good luck with whatever you decide to do.

debtaghh

Thanks Charles, I just did this and they let you allocate loads!

I just read up on dmps and feel very anxious as it mentioned creditors and CCjs. We really couldn't risk this due to the renting issue. We already struggle to find suitable properties due to the amount of ppl in our family and the size house we can afford we cannot risk having anything against our name.

System

I also had a DMP whilst renting and it never affected anything , my debt amount was around 10k then.

I understand you not wanting to do it , but what is the answer? I think that is what you need to think about . Take advise from the DMP thread and see how you go.

Enjoy Sunday .

debtaghh

Thanks cumbria.

I forgot to include in my mini soa that I'm getting equivalent to £10 k this year as gifted and other which will go towards car, clothes, trips Plus my dh does normal get overtime. I'm thinking we should be ok as long as we stick to a very tight budget. Or am I'm being naive?!

enthusiasticsaver

Using additional income to plug the gaps and continuing as you are just trying to get the debt down is ok until the gifted money no longer exists if you are happy doing that. Relying on gifted money and overtime seems a little precarious though.

As you have no assets I would think it is unlikely creditors would go to court to gain CCJs. The slightly grey area to this is if you refused to make an arrangement to pay due to you prioritising family debt but they rarely do this if you make a reasonable arrangement of say 75% of the minimum payments to each of your creditors. A DMP is not a magic bullet though. It does not make debt disappear but makes it more bearable to live with long term. I am not sure why stepchange say an IVA is not ok for you but I do know your soa has to be very tight for this so finding the £250 for the family debt may not be allowed. 75% of your creditors also have to agree to it.

Charlie's tribe suggests a good idea about doing the stepchange form online to see what is suggested under each category. Are you paying interest on the debts as this is what determines whether a DMP is worth doing as they will usually freeze the interest. Add up how much you are paying in interest monthly as that is the amount you would save. Presumably if you have now resorted to asking family members to take out debt for you you cannot get any more 0% deals?

As you know I think some sort of debt solution is the best way forward for you as it has now reached such high levels but whichever way you choose it will be a long slog. Using family either to take debt out for you or to borrow off is really making things worse for you though. If you cannot borrow through normal channels that means you are already seriously over committed and renting or not you would need to default and go on a DMP or seriously reduce your outgoings or increase income. Your rent is higher now and that and the debt repayments takes almost all of your OHs salary. Moving obviously has thrown you off course as you were reducing the debt until then but now your rent is higher, your fuel and car costs are more but at least you are now earning. Only you know what is your best option going forward. I would do the DMP though but the family debt does complicate that.

enthusiasticsaver

I would also say it is extremely rare for creditors to take people to court to get CCJs rather than accepting a DMP. What would be the advantage to them of doing this with you? You have no assets so they cannot put a claim against a property and this would never happen anyway. Unsecured creditors have no teeth and they know this. Defaults will show on your credit history but this should not affect you when renting.

debtaghh

I'm not expecting gifted money every year but what I meant was as I have this opportunity it could help us out as we won't for a year have to worry about car etc meaning any overtime and extra income could go towards extra debt payments. I did what Charlie suggested and they allow for a lot. With regards to the Iva I think it was to do with we wouldn't be able to offer enough due to how much they allocate for food etc. We pay currently approx £100 interest per month.

enthusiasticsaver

So by my reckoning you should reduce the credit cards by £7500 approx over a year once you take the interest of £1200 approx into account on the credit cards and pay just minimums. The family debt will go down by £3000 assuming no interest on the credit cards they have taken out for you. So overall a reduction of around £10k over the year. That is if you continue as you are. The following year though if you don't have the gifted money money/overtime that will reduce the amount you repay.

Doing a DMP will save the £1200 interest over the year assuming creditors accept the plan and stop interest. The family debt will still decrease by £3000 if you stick with £250 per month and no interest. Assuming you go for a plan aiming for 75% approx of your monthly repayments that would be around £500 to your creditors that would give you £220 back to your monthly income giving you leeway to save for emergencies, cars and some towards entertainment. I don't know what your CC debt is now but say it was frozen at £44k with your DMP set at £500 per month that would give you a DFD of over 7 years which may be allowed although usually they don't like to go past 6. They will do that though and you would be debt free in 7 years and 4 months. At the current rate you are paying your family debt it will take you more than 13 years to clear it. The DMP will give you certainty that the debt is going down and no worries about if higher interest rates kick in etc.

debtaghh

No we don't pay interest on my parents credit cards or money owed. My aim would be to clear the credit cards in 4 years. The interest would reduce the more we pay.

MrsSave

Is it really worth keeping things going the way you are? It often seems that it puts a lot of pressure on you and brings you down. Aiming to pay your credit cards off within 4 years seems a little too optimistic, especially when your soa above didn't include any money for entertainment, gifts, haircuts, clothes, etc.

Please believe me that I'm saying this is all coming from a good place, not trying to bring you down or rain on your parade so to speak. 4 years is a long time to go without any spending/day to day money.

Enthusiastic saver speaks a lot of sense above, and the figures to me scream out for you to go down the dmp route. It just seems like it would take such a weight off your shoulders and would make living far easier for you.