DMP Mutual Support Thread - Part 12

Puzzcat

Misswelsh84 wrote: »

Hi I have finally had to admit I cant deal with my debts on my own and have took the step and asked for help from Step change with a DMP. I have a question I cant find an answer to. I owe a loan, credit card and overdraft to the bank my wages are paid into. As I'm now doing a plan are they likely to close my accounts? I'm worried they could take my wages to cover the debt. I doubt i would get a bank account anywhere else.

Hi Misswelsh84,

You will need to open a basic bank account with a bank you do not have any current debts with and get your wages swapped to this account. Have you already started your dmp?

Puzz

motivated

Misswelsh84 wrote: »

Hi I have finally had to admit I cant deal with my debts on my own and have took the step and asked for help from Step change with a DMP. I have a question I cant find an answer to. I owe a loan, credit card and overdraft to the bank my wages are paid into. As I'm now doing a plan are they likely to close my accounts? I'm worried they could take my wages to cover the debt. I doubt i would get a bank account anywhere else.

Hi misswelsh

I too thought I would struggle to get a new bank account. However I opened a Santander basic account online. The application was easy It was up and running within a few days. I have since opened online savings accounts with the same bank. Again all opened online.

There are many basic accounts around and I think it's fairly easy to get a basic account opened
M

Misswelsh84

No i have only filled in the form today with them. I wasnt sure of what I needed to do. Will look at a basic account first before sending anything off and get my wages transferred. Thanks

StopIt

Misswelsh84 wrote: »

Hi I have finally had to admit I cant deal with my debts on my own and have took the step and asked for help from Step change with a DMP. I have a question I cant find an answer to. I owe a loan, credit card and overdraft to the bank my wages are paid into. As I'm now doing a plan are they likely to close my accounts? I'm worried they could take my wages to cover the debt. I doubt i would get a bank account anywhere else.

You're describing the right to set off.


It can be used, but isn't very common, especially with agreed payment plans in place.


However, I would still advise you to open a BASIC bank account with another bank ASAP anyway, just in case they reject the payment plan proposed.


Basic bank accounts do not require credit checks, and you should not have any problems opening one.


http://www.moneysavingexpert.com/banking/basic-bank-accounts

Puzzcat

Misswelsh84 wrote: »

No i have only filled in the form today with them. I wasnt sure of what I needed to do. Will look at a basic account first before sending anything off and get my wages transferred. Thanks

I wouldn't rush to set it up, you need an emergency fund in place first.. try and read back as much of this and previous threads as you can its full of useful information and really helped me when I started out.

Puzz

Misswelsh84

I have opened one ready. it will take a while for me to sort out direct debits etc. I have read some of the thread but i am just getting more and more confused as I read.

Misswelsh84

Thanks. I opened one now as i want to get things in place ready. I still have DD I have to pay and need to be sure these are covered as don't want any added pressure on top of the debts I already have. I thought setting up the plan would be the start but now I'm seeing there is a lot more i need to do.

sourcrates

Misswelsh84 wrote: »

I have opened one ready. it will take a while for me to sort out direct debits etc. I have read some of the thread but i am just getting more and more confused as I read.

Hi,

What part of it do you find confusing ?

Misswelsh84

All of it tbh. I thought setting up the DMP was the first step but I have no idea what an emergency fund is (i know what it is but not in a DMP context). I have no spare savings etc. The steps i have taken is to open a basic account and applied for the DMP. Is there anything else i should be doing before any of this?

Thanks for all the advice. I've been fooling myself that i can sort it but feel like I'm going round in circles.

sourcrates

Misswelsh84 wrote: »

All of it tbh. I thought setting up the DMP was the first step but I have no idea what an emergency fund is (i know what it is but not in a DMP context). I have no spare savings etc. The steps i have taken is to open a basic account and applied for the DMP. Is there anything else i should be doing before any of this?

Thanks for all the advice. I've been fooling myself that i can sort it but feel like I'm going round in circles.

Ok, its really simple, you have already taken the first step of opening a new bank account, (ticks off the list).

Now whilst your in a DMP access to credit will likely be zero, so before you send in those DMP papers, you need to stop all payments to your creditors, and save up some cash to keep as an emergency fund, most recommend about 3 months payments, but its up to you.

At the same time, write to each creditor telling them your in financial trouble, that you are contacting stepchange, and that you will be in contact in the near future with repayment proposals, ask for all future contact to be in writing only, that will (hopefully) stop recovery action calls, thats all you need to do with regard to creditors.

Save up your EF, then send your paperwork to stepchange, doing it this way makes you more prepared if any unforeseen financial crisis should pop up, you will hopefully be able to deal with it, rather than have it derail you.

Stepchange wont tell you any of this, they are funded by the banks, and there sole aim is to get you paying ASAP, its not always the right approach for everyone.

I hope that clears the fog a little.