DMP Advice

n2k16

Hi
I am in a significant amount of debt, totalling around £12500.
I have filled in the debt remedy on stepchange which has advised a DMP, but I just thought I would see if anyone on here could offer me any advice before I send the form off.

So far I have never missed a payment, but now I have no options available.

My debts are as follows
- £6,700 - Barclaycard
- £1050 - Capital one
- £700 - Aqua c/card
- £1,300 - 118 money loan (over 12 months)
- £1,000 -Natwest Overdraft
- £1,800 - Accross 6 x payday loans (amount as of today, excluding any future interest)

Basically, I can manage to pay the minimum payments on the 3 credit cards, but there is no way that I can afford to repay the payday loans back, as they are due in between 1 and 3 months time and will have high interest added on to these.

Would I be better off just putting everything on to a DMP, or carrying on paying the minimum payments on my credit cards and speaking to the loan providers informing them that I cant afford to pay them at the moment?

Also, I know it should probably be the least of my worries at the moment, but in 3 or 4 years time I may be in a position to be able to repay everything and will be wanting a mortgage. I know that both options are going to ruin my credit rating, but realistically what would be my chances of getting a mortgage in a few years time? Is it looking like it is going to be impossible?

Any advice would be greatly appreciated.

Shakin_Steve

If you think that you will be able to clear these debts without defaulting, then you must try if you want to apply for a mortgage. However, if you know that you are going to fall by the wayside later on, then now is the time to either negotiate with your lenders of seek advice. If you keep struggling to pay and then stop later, you will have put yourself through a lot of stress to end up in exactly the same situation.

StokieBecks

If you are going onto a DMP you have to include all your debts. You will also need a basic bank account that is not linked to a bank you owe money too.

Suseka97

The best advice I can offer is for you to actually speak to one of the StepChange advisers. Each month you delay, your debts are increasing (especially the payday loans) and its best to get a grip on it now. If you pay only the minimum amounts on the credit cards for the next 3-4 years - with interest I would expect your debts to be quite significantly more -and you say that you 'may' be able to pay off the balance then, not that you can. I also doubt very much that your payday lenders will except no payments at all. Seriously - you've taken the first step and you've nothing to lose if you have a chat with SC. It's then up to you to decide what you want to do. For now I would put thoughts of a mortgage (even in the future) on hold and deal with the present

DCFC79

How have you got into this position.

Get a new account opened up, just a basic 1 if need be and have you wages paid into it and/or benefits, it must be an account with a bank you currently don't owe money or that isnt part of the same group but looking at your post maybe thats not the case.

n2k16

Thanks for all the replies. I am deeply ashamed to admit it, but i have got myself in this position due to a gambling addiction. I know i also need to address this, which i have taken steps towards doing.
I think a DMP is going to be my only option, so am going to send the form back to stepchange once i have got a new bank account set up.

Should i inform all of my creditors immediately of my situation and cancel any dd's and CPA's? As i have some due out soon and really cant afford to pay them?

fatbelly

That's very common and you do need to take steps to address the underlying issue, so well done for recognising this.

How long is it going to take you to clear the debts with a dmp?

Yes, cancel your payments. Stepchange will give you a standard letter to send.

runforlife

n2k16 wrote: »

Thanks for all the replies. I am deeply ashamed to admit it, but i have got myself in this position due to a gambling addiction. I know i also need to address this, which i have taken steps towards doing.
I think a DMP is going to be my only option, so am going to send the form back to stepchange once i have got a new bank account set up.

Should i inform all of my creditors immediately of my situation and cancel any dd's and CPA's? As i have some due out soon and really cant afford to pay them?

Please do not be ashamed to admit that you have a gambling addiction. Congratulations with recognising it and all the very best in managing it.

As for debt? It's just money and every debt problem has a solution.

My son faced up to his GA a couple of years ago and is 'managing it'. I don't think you ever beat it - but learn to manage it. Since his sister took control of his finances on a temp basis he has gone from strength to strength.

National_Debtline

n2k16 wrote: »

Should i inform all of my creditors immediately of my situation and cancel any dd's and CPA's? As i have some due out soon and really cant afford to pay them?

Hi

You can send this ‘hold action’ letter to your creditors to let them know you’re seeking advice and need to cancel your payments.

www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

James
@natdebtline

n2k16

Thanks for the kind words.
The DMP says it will take 5 years and 9 months, but I am hoping my income will increase during this time, so hopefully should be cleared before.

I have just applied for a basic bank account with HSBC, so just need to wait until that is opened so I can send the form back to stepchange with the new bank details on.

Is there some kind of template anywhere for me to send letters/emails to some of my creditors?, as I have some payments due in the next week, and I dont think I will have sent the form in to stepchange by then and dont really want to just cancel the DD's without them knowing what is happening.

Thanks.

sourcrates

n2k16 wrote: »

Is there some kind of template anywhere for me to send letters/emails to some of my creditors?, as I have some payments due in the next week, and I dont think I will have sent the form in to stepchange by then and dont really want to just cancel the DD's without them knowing what is happening.

Thanks.

Right, the usual rules go out the window now your entering debt management.

You don't pay anyone, except priority debts, until the DMP is up and running, a simple letter saying you are in financial difficulties, you have taken advice from stepchange, and that a DMP is considered your best option, is all you need to tell them.

Advise them that stepchange will be in touch within 30 days with your proposals.

That's it, short, and to the point.