Time and debt reduction

changeforbetter

Does anyone else ever feel that it is the 'slowness' of debt reduction that gets them down the most?

I am now paying a DMP that started at 26,000 earlier this year. I keep kicking myself thinking 'why didn't I do it earlier - a year before, or even 2 or 3 before....grrrr.

Given a rather low starting income, my plan only pays off £200 per month (across 8 different debts). They told me when setting it up it was 11 years estimated - that felt bad I must admit. 11 years of your life!

I've asked elsewhere about adding payments when I can, to reduce the debt more quickly (hope that can help my moods).

I'm no spring chicken, and frankly it's depressing to think how old you will be when you reach the DFD.

Would love to hear other's thoughts about this slow 'passing of time' when paying debts, and coping more importantly! :think:

fatbelly

The FCA now frowns on dmps of that length so they officially share your concern.

The question they (and I) would be asking is why did you not do an IVA (if homeowner) or bankruptcy (if not)

The timescale would be 5/6 years IVA and 3 years for bankruptcy with an IPO

Muttipops

Hi,
A couple of background question.. did you look at other possibilities of paying back your debts and are you self-managing or with someone like StepChange?
As to the longevity of it, I had 8 years of trying to pay back my debts and it was agonisingly awful. I was in a DMP which cost me 600 Euros a year in admin charges. It was overseen by the governemnt who read all my post, I was in and out of work, all but 40 euros/week was taken for debt repayment. It was in another EU country and I had 40 Euros a week to live on for food, petrol for my scooter, cat food, internet payment. I was socially isolated in a block of flats. It was hell.
(Now, I am in work in UK, happy and glad to be working and paying my way again. I am bankrupt but the new country and new start has saved me mentally and made me a useful member of society again, so now I can hold my head up oncemore and live.)
That is all a longwinded way of saying I understand how time passes slowly when you are in debt and can't wait for it to end. The way I would cope now would be to see that DMP as like a mortgage, a debt that takes a long time to pay but in the meantime you get on and live life, as long as you can make the payments. Treat the time as a challenge to be creative in your budgeting so that you get the most out of your money. And by all means if you can and want to, make extra payments if you can afford them, making sure first you have an emergency fund to make sure no big unexpected bills make you need to get into any more debt first.
Like many things in life, it's the way you approach it that makes all the difference. Worrying about it won't help and for the duration of the DMP, treat yourself kindly and do not make your life all about the DMP and fear giving yourself times when you treat yourself, no matter how small a thing you do, as it is not a punnishment.

sourcrates

I too don't approve of long term debt solutions, they can be utterly soul destroying.

Regardless of the reasons you originally got into debt, and the moaning of the "must pay back at all costs" brigade, for your own state of mind you need to be able to see the light at the end of the tunnel.

There are quicker options, have you looked at an IVA or Bankrupcy ?

Any reason these options would not be suitable ?

changeforbetter

Thanks for the replies - the simple reason it is that lengthy is due to my low (reduced from earlier in my career) income. It is with Stepchange, and they didn't seem to indicate it was anything completely out of the ordinary...?

I would like to increase the payments if possible in future, but that is income dependent of course.

As for IVAs and Bankruptcy - wouldn't those put your house at risk? That's not something I am prepared to do given the effect on my wife/family if I did that.

sourcrates

changeforbetter wrote: »

As for IVAs and Bankruptcy - wouldn't those put your house at risk? That's not something I am prepared to do given the effect on my wife/family if I did that.

Bankrupcy yes, IVA no.

An IVA would not threaten your property at all.
There is a remortgage clause in year 5 of an IVA, but it's down to individual circumstances as to weather that happens.

An IVA would be done and dusted in 6 years max, normally 5.

May be worth looking into at least.

changeforbetter

sourcrates wrote: »

Bankrupcy yes, IVA no.

An IVA would not threaten your property at all.
There is a remortgage clause in year 5 of an IVA, but it's down to individual circumstances as to weather that happens.

An IVA would be done and dusted in 6 years max, normally 5.

May be worth looking into at least.

Thanks sourcrates, I will have a look. Although, I'm still doubtful if it would be for me if it would affect anything to do with the house, for reasons of others involved in the property. What I am really pinning my hopes on is somehow increasing my income and upping the payments in my DMP. I sometimes get increased funds, but given the style of my employments it is almost always a short term increase in income, nothing permanent (most of my work is contract). I keep praying though on that one! :undecided

fatbelly

£200 a month should be enough for an IVA proposal on 26k.

Rough calculations show £150 might do it

Dandytf

changeforbetter wrote: »

Does anyone else ever feel that it is the 'slowness' of debt reduction that gets them down the most?

I am now paying a DMP that started at 26,000 earlier this year. I keep kicking myself thinking 'why didn't I do it earlier - a year before, or even 2 or 3 before....grrrr.

Given a rather low starting income, my plan only pays off £200 per month (across 8 different debts). They told me when setting it up it was 11 years estimated - that felt bad I must admit. 11 years of your life!

I agree though time passes when you concentrate on something other than your finances.

That's why I find Step Change and Yearly mortgage statments useful.

I work and come home, eat, sleep, read online.

The difficult times I endured 2011 onwards are past me thankfully.
I've asked elsewhere about adding payments when I can, to reduce the debt more quickly (hope that can help my moods).

I'm no spring chicken, and frankly it's depressing to think how old you will be when you reach the DFD.

Would love to hear other's thoughts about this slow 'passing of time' when paying debts, and coping more importantly! :think:

180 per month since 2012 until 2019, I take 1 year at each new year as motivation, taking responsibility for my past debts, never often at all mention my circumstances at the time of setting up DMP.

I thank god not one creditor has ever asked me to give up my home or use my equity.
In a way it borders on 'almost to good to be true'

Learn to enjoy your free time, you've taken responsibility, others often don't and feel desperate whilst borrowing short term just to make ends meeet

Maximum_Saving

Hello. I very much feel the time scale of paying off debt. I used to have credit card debts that took around three years to pay off. I borrowed some money off my mum and it took 1 year to pay her back. Since August in 2010 I have been paying off my mortgage. Good luck.

changeforbetter

Thanks for the replies above, very helpful and appreciated.

I did have one additional thought on this though (which may apply to others in similar cases).

One thing that could possibly reduce the time, is making a later Final Settlement offer (if I could get anything close to a lump sum at any point)?

I guess that's how many look to shorten the final push in DMPs?