Setting up DMP. Im now terrified!

kezzb

Hi, I am in the process of setting up a DMP with Step change. I guess before this I was living in ignorant bliss. Im now reading about charging orders and bankruptcy. Im terrified I will lose my home, I have a little boy who has already been through such a hardtime, his dad, my partner died of cancer 5 years ago. All my debts are unsecured but will take 12 years to clear unless our circumstances improve by some miracle. We had no life insurance when my partner died. I am panicking now!

mum2one

You have taken the hardest step and that is getting advice, once your dmp is up and running, give it 6 mths and your wonder why you worried.

As for 12 yrs - you never know what the future holds, at least your paying towards it xx

**laura**

I felt exactly the same at first, I think it's the release of relief too to some degree. Mine has been ok so far. Hope you soon feel better for taking the step xx

chevalier

Whilst I am not the most knowledgeable person here regarding DMPs there e are some things you can ask yourself .
1) first of all could you have continued paying the money you were paying to creditors, or would it have started to put something else at risk like your house, or clothes for you little one? If the answer is yes then doing a DMP is the right thing to do, otherwise you would have to go bankrupt.

2) Are you using a free DMP service like Stepchange, Payplan, National Debtline or Christians Against Poverty. If the answer is yes then well done you are in excellent hands with any of these. If you are paying a fee, then you may wish to cancel and go to a free provider instead. Every pound that you pay a company in fees ISN'T going to your creditors so therefore it takes longer to pay off the debts.

the other benefit of using the above, is that they are generally respected in the industry so if you have a DMP with them, it is almost always accepted.

3) have you set your budget under your DMP to be a realistic one? ie one that can pay your secured creditors if any, plus keep your house warm, food in your bellies (decent food) and clothes on your back, plus a little wiggle room for an emergency fund?
If you have cut it too fine, then this may need revisiting. I think it is Payplan who has on their site somewhere what the allowances are for each category. You might be surprised what you are allowed to budget for.

4) So you get your DMP set up. The first few months might be tough. Some creditors might well call querying why you aren't paying your contracted amount any more. You just quote your DMP number and who it is with and leave it at that. You don't have to deal with them anymore.

Generally speaking after a few months, most creditors have accepted in some way the DMP and frozen interest. Some will say we will freeze interest and charges for six months, some 12 months, either way you can breath a sigh of relief.

I would strongly suggest you find the DMP supporters thread and check in there. Lots of smart, good people who can put your mind at ease.

Good luck
chev

National_Debtline

Hi Kezzb

Don’t worry, it sounds like you’ve done the right thing if you were struggling to afford your essential living costs. Most creditors tend to go along with offers through Stepchange as they’re getting their fair share of the amount you can realistically afford.

Court action doesn’t seem to be very common for people in a free DMP, and Bankruptcy should only really be used as a last resort and is very unlikely if you’re making payments. I can understand why it’s stressful for you but it will fade, and it isn’t something you should lose any sleep over. You should think of your DMP as a positive step.

James
@natdebtline

glentoran99

Starting a DMP was the best thing I ever done, such a relief and all calls and letter pretty much stopped

sourcrates

kezzb wrote: »

Hi, I am in the process of setting up a DMP with Step change. I guess before this I was living in ignorant bliss. Im now reading about charging orders and bankruptcy. Im terrified I will lose my home, I have a little boy who has already been through such a hardtime, his dad, my partner died of cancer 5 years ago. All my debts are unsecured but will take 12 years to clear unless our circumstances improve by some miracle. We had no life insurance when my partner died. I am panicking now!

Hi,

Sorry to hear about the terrible time you both have had.

The good news is, those times should be behind you now, you have read about possible steps creditors could take, but in the end its down to pure economics and guidelines how they deal with you.

As long as your paying down your debts via a DMP, its very unlikely any further action will ever take place, under FSA guidelines, creditors are obliged to treat you fairly, they do this by looking at your SOA (statement of affairs) either provided directly by you, or by stepchange.

This shows them what you can afford to pay them each month, why would a creditor go to the expense of taking legal action, and obtaining a charging order, when at the end of all that, they will still get the same monthly payment ?

99 times out of 100 they wouldn't bother, unless you owe them a substantial amount of money and they feel like they need some collateral to guarantee payments.

So i understand these first few weeks, or months, may be a bit surreal, but you will soon come to understand the inner workings of these things, you will find you were worrying for nothing, and the world does not end if you cant pay your debts.

Good luck with it all, there is a specific DMP thread on this forum, full of people in the same boat as you are now, its a great place to go if you have any questions, however trivial they may seem.

The link is here :

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