Stepchange DMP or Arrange Reduced Payments myself?

craftyali

My income has not been as high as previously due to lower sales on my online Tarot reading business (I have not been able to commit to as much marketing etc due to my worsening health). Therefore, I could see that I would be struggling to make the minimum payments on my debts each month - with just the monthly income I have from my husband's farm business.

I have gone to Stepchange and they are suggesting a DMP. I sent letters to my creditors telling them I was talking to Stepchange and letting them know how much I would be paying per month (varies from 50-80% of the minimum payment).

I have already had a phonecall from one creditor saying that I was in arrears. When I said that I had sent a letter, she did look on my account and saw that had been received. She said she would get the correct department to write to me about the reduced payment.

Had a letter from another creditor today asking me to phone them with details of my income/outgoings etc - but until they receive those details they would continue to add charges/interest to my account etc.

Should I set up the Stepchange DMP - they say just over 4 years to clear the debts with that - or should I just continue with setting the reduced payments myself?

I plan to pay as much as possible each month (whenever I sell a Tarot reading or the craft items I sell also - and developing some new products), so quite often the payment would be closer or over the minimum amount. I am a bit uncomfortable about signing everything over to Stepchange, but still getting contact from my creditors and no guarantee they will stop charges/interest. I may end up in a worse situation than before (I have been paying over the minimum payments and even cleared some smaller debts).

Any opinions?

TIA, Ali x

BrightLights14

I'd start by going through Stepchange or Payplan. If you don't like it you can always stop and go self-managed, but they'll be a huge help getting everything set up.

I'm with Payplan & they've mostly been great.

Sazzie23

Hi CraftYali

Go with stepchange, or do it yourself (use NEDCAB site for extra help), either way you are not guaranteed to stop interest, and you must keep track of your debts. However, you are more likely to get your interest cut if you pay them less and save up to pay the debt off in an f&f in the end. Stepchange won't tell you that bit though.

I'd recommend reading the DMP mutual support thread to see if you get more of an idea what to expect and why.

Hope this helps

Saz

dancingfairy

Bizarrely struggling one month and paying more the next is probably not going to help you. You'd think it would be seen as a bonus and you'd get some credit for that but all it would show is that you were choppy and change and inconsistent.
Much better to commit to an amount you can definitely pat and pay that regularly. Any spare one month should be put to one side for emergencies or to make full and final settlements.
Whether to DMP or just continue trying to pay the minimums each month is a hard choice. I think when you've got to the stave where you start paying reduced payments then your credit is being affected anyway so probably best to commit to a DMP. It is hard though when you're in the borderline.
Why not discuss it with stepchange? Ask what the pros and cons are for each.
Also whether you go it alone or go through stepchange or similar there is no guarantee interest and charges will be stopped unfortunately. Whichever option you choose (stepchange or self managed) you will need to be proactive in writing to creditors and asking them to stop interest and charges.
There is a certain argument that using stepchange or other debt charity adds a little weight to your cause but you seem like the type of person who may prefer to self manage and is perfectly capable of sending letters out etc (there's loads of support on here).
Good luck whatever you decide.
Df