I need help with a DMP

sourcrates

I agree with Fatbelly here, DMP to start with, then look into the prospect of an IVA.

With regard to the re-mortgage clause, you do not always have to re-mortgage in year 5, most of the time it's not possible for people to do this, so an extra year would be added to your Payments.

fatbelly

Yes, that's good thinking above. Get the interest killed with a low-start dmp, then explore options.

If you do get on board with stepchange, and they start talking about an IVA, bear in mind that there are plenty of Insolvency Practitioners who do them, and you do not have to go with the pushiest one, or even go for one. But once you sign up you are committed to it.

Dr Watson is trying full & final settlements alongside a dmp, so worth following - another option for you.

debtisnotme

fatbelly wrote: »

Yes, that's good thinking above. Get the interest killed with a low-start dmp, then explore options.

If you do get on board with stepchange, and they start talking about an IVA, bear in mind that there are plenty of Insolvency Practitioners who do them, and you do not have to go with the pushiest one, or even go for one. But once you sign up you are committed to it.

Dr Watson is trying full & final settlements alongside a dmp, so worth following - another option for you.

You guys are amazing, thank you so much for all your advice.

Honestly, an IVA scares the pants off me, its so formal and I am aware that its very inflexible once set up. I'm not expecting any big changes in my life but the unexpected comes along... isn't there also something with IVAs that if it fails they can make you bankrupt?

debtisnotme

DrWatson1 wrote: »

First of all, getting into debt doesn't mean you are stupid. There are many people on these forums, including myself, who are well educated and otherwise healthy functioning individuals who have got into debt through a variety of circumstances. No one is here to judge, and you don't owe anyone an explanation.

Your personal circumstances are very similar to mine (I'm a single, homeowner with around 30k debt, 70k mortgage against a £140k property). A DMP has worked very well for me thus far (if you search my posts on this forum, you will get an idea of my exact circumstances and how I'm dealing with debt), and certainly gives you a great deal more flexibility to cut deals further down the line than an IVA might.

Fatbelly is spot on IMO - a DMP would give you some breathing room to fully comprehend your situation and the options available to you. My only advice would be to over-egg your expenses and probably look to pay no more than £200pm (you could probably get creditors to agree to something around £125pm) while you take stock of everything and decide how best to move forward.

It's much easier to get creditors to agree to higher payments in future, than lower ones!

Edit: This calculator will give you an indication of what is acceptable for monthly outgoings in order to enjoy a minimum standard of living.

Thanks for your thoughts. You are correct in I need to temper my wish to repay my debts as quickly and fully as I can with a need to live for the next five years or so and be able to manage my responsiblities. Those expenses in my SOA are pared to the minimum, I've opened a credit union acount so that i can save the £30 emergency fund - is that considered acceptable? I already live in fear of the boiler breaking or a roof leak etc. I will take a look at your link when I am home and redo my SOA.

debtisnotme

So if I can finalise my SOA I will upload it and wait for ND to contact me (Although perfectly capable on the surface I don't think I am in a good enough place mentally to manage it myself)

In the meantime I know I need to open a basic account and move my DDs (missed my £500 overdraft off the list which I understand I have to include), what do I do about the DDs that will be in the DMP? Just let them keep taking the money until everything is set up or cancel them ASAP?

sourcrates

debtisnotme wrote: »

You guys are amazing, thank you so much for all your advice.

Honestly, an IVA scares the pants off me, its so formal and I am aware that its very inflexible once set up. I'm not expecting any big changes in my life but the unexpected comes along... isn't there also something with IVAs that if it fails they can make you bankrupt?

Ah its not scary at all, if you budget correctly to begin with, it can be a complete doddle.

Yes, if it were to fail, a creditor "COULD" petition for your bankruptcy, but that would cost them money, so in practice, it docent happen often, you make your monthly payment, you have an annual review once a year, thats it, you wont hear from your IP most of the time, things just tick along nicely.

Its not totally inflexible, you can miss payments if it proving too much, they would need to be repaid, but the IP can go back to your creditors at any time, and ask to reduce the payments, this may extend your arrangement though, but there are options once your in it, its not too rigid.

But thats mainly why its sooo important to budget correctly before you start the arrangement !!

debtisnotme

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 1807
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1807

Monthly Expense Details
Mortgage................................ 432
Secured/HP loan repayments.............. 323
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 80
Electricity............................. 20
Gas..................................... 25
Oil..................................... 0
Water rates............................. 15
Telephone (land line)................... 15
Mobile phone............................ 22
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 180
Clothing................................ 10
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 35
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 25
Pet insurance/vet bills................. 0
Buildings insurance..................... 22
Contents insurance...................... 0
Life assurance ......................... 25
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 40
Total monthly expenses.................. 1331


Assets
Cash.................................... 0
House value (Gross)..................... 125000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 125000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 63000....(432)......4.99
Secured Debt.................. 19500....(323)......15.9
Total secured & HP debts...... 82500.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
DMP............................37000.....476.......0
Total unsecured debts..........37000.....476.......-


Monthly Budget Summary
Total monthly income.................... 1,807
Expenses (including HP & secured debts). 1,331
Available for debt repayments........... 476
Monthly UNsecured debt repayments....... 476
Amount left after debt repayments....... 0

Personal Balance Sheet Summary
Total assets (things you own)........... 125,000
Total HP & Secured debt................. -82,500
Total Unsecured debt.................... -37,000
Net Assets.............................. 5,500


Reproduced on Moneysavingexpert with permission, using Firefox browser.

debtisnotme

Can anyone advise if they think my revised SOA might be acceptable?

sourcrates

debtisnotme wrote: »

Can anyone advise if they think my revised SOA might be acceptable?

It depends if you want to go down the DMP route, or the IVA route. To be honest, i`d shave a bit more off that £476, whittle it down to about the £400 mark.

If you go DMP, you can vary what you pay to it yourself, with few problems, if you decide a more formal approach is necessary, and opt for an IVA, you dont really have that option as easily, so its imperative your budget is manageable, and not just formatted to please those who say cut it to the bone, as that wont be sustainable.

enthusiasticsaver

The payment has to be sustainable. You have built in an emergency fund which is good but I think you need something in the presents column and contents insurance. I agree with sourcrates in that £400-£450 would be more sustainable. If you offer £476 you are leaving yourself with less than £600 per month once your mortgage and secured loan and dmp payments are paid. Long term I think this may be difficult.