DMP Mutual Support Thread - Part 12

StopIt

manue1970 wrote: »

Hello
Hope someone can help.
I have 25k worth of debt :

Barclay Card : 11k
Natwest Card : 5.5 k
NatWest Overdraft : 6.5 k

I would like to do a Debt Management program to clear my debt but worried about few things :

My Mortgage is with Natwest so if I need to close my account with them will I be able to renew my mortgage with them when the time come and if I cannot stay with them will I found it difficult to move my mortgage with another company. Will I need to pay high interest rate?

Which bank should I use? I have been told that it should not be a bank link with NatWest. Any Advice on bank please?



Many Thanks in advance

Emmanuelle

Being in a DMP generally involves accounts being defaulted. This will seriously affect your chances of re-mortgaging so I'd seriously be on the line to StepChange or the National Debtline for advice before you proceed. Remember you don't need to do checks to go from a deal to the SVR, but of course the DMP will likely stop you from getting the best deals.


It is generally advised to use a different bank from ones you owe, because of the (not often used) right of set-off.


In your case, opening a Basic bank account with the Co-Op, Santander, the Lloyds Group or TSB would be fine.


While 25k sounds a lot, we only know the debt side. If you were open to posting a full SOA, maybe there are ways to deal with this that are not so drastic, have you spoken to anyone about a DMP yet? Again, aside from the mortgage bit, it is essential to get advice from a debt charity or the CAB before committing to a DMP because the effects are long lasting (Defaults affect your credit files for 6 years post default, AR markers 6 years after you clear the accounts affected) and while useful, should not be a first resort.

sourcrates wrote: »

Hi,

Nat-west are a stand alone bank, not linked to any other bank, so you can pick any other bank offering a basic bank account (there are many) as long as you have no other debt with the bank you choose.

Slight correction to this, NatWest are linked to RBS (Same owner), but hold different banking licenses. Still probably a good idea to avoid that link however and there's plenty of other banks around.

sourcrates

StopIt wrote: »

Slight correction to this, NatWest are linked to RBS (Same owner), but hold different banking licenses. Still probably a good idea to avoid that link however and there's plenty of other banks around.

That`s correct, RBS subsidiaries NatWest, Ulster Bank and Coutts all have their own, separate banking licences and are not covered by the RBS license.

So you would be safe with most any bank, but avoid if you don't want to take the risk.

manue1970

Hello


Many thanks for your reply.
My SOA is :


2903.41 salary / month (husband and me)
Outgoing :


Mortgage £628.00 Rent 2nd charge Council Tax £109.00 Life insurance £0.00 Buildings & contents insurance £14.06 Water rates £27.90 Gas Electricity £44.00 Other Fuel £44.00 TV Licence £12.33 Telephone £12.50 Internet £12.50 Mobile telephone £45.00 Housekeeping (food & toiletries) £400.00 Clothing and footwear £60.00 Public transport "son" £40.00 Car petrol *husband and me* £280.00 Car insurance £68.00 Car road tax £18.00 Car repairs & servicing £15.00 Medical expenses £7.50 Optical expenses £0.00 Dental expenses £0.00 Sky £0.00 Laundry & dry cleaning £0.00 Hairdressing £20.00 Pocket money *kids* £60.00 Newspapers £0.00 Cigarettes £215.60 Meals at work £100.00 Pets £10.00 Other Outgoings: Specify daughter and son hot dinner £88.00 Other Outgoings: Specify scouts £22.00 Other Outgoings: Specify Daughter afterschool activity £100.00 Other Outgoings: Specify Son afterschool activity £50.00 Other Outgoings: Specify Total Outgoings £2,503.39



Creditor Information (Debts) Creditor Balance % Monthly Payment 1 NATWEST MASTERCARD £5,737.91 24.61% £130.00 2 NATWEST OVERDRAFT £6,576.98 28.21% £121.00 3 BARCLAY CARD £11,000.00 47.18% £295.33

manue1970

hope this makes sense
Salary : 2903
Outgoing : 2503
Credit : 546

zenshi

I have a small credit card debt with the same bank as my mortgage. It is only small debt ie low hundreds. When it came to getting a different mortgage rate, I had to disclose all my debts etc and they were no problems at all

So, it's not always an issue but keep all options open just in case

kram

I checked with my mortgage broker before I started my dmp, they said as long as I was just doing another like for like fix the with same lender I would not get any surprises & be ok. If I wanted to change lender or borrow more then that would be a different story.

I hope you get it sorted, so its one less thing to worry about.

StopIt

manue1970 wrote: »

Hello


Many thanks for your reply.
My SOA is :


2903.41 salary / month (husband and me)
Outgoing :


Mortgage £628.00
Rent 2nd charge
Council Tax £109.00
Life insurance£0.00
Buildings & contents insurance £14.06
Water rates £27.90
GasElectricity £44.00
Other Fuel £44.00
TV Licence £12.33
Telephone £12.50
Internet £12.50
Mobile telephone £45.00
Housekeeping (food & toiletries)£400.00 Considering the £100 per month of school lunch, this is at least £100pm too high.
Clothing and footwear £60.00
Public transport "son"£40.00
Car petrol *husband and me*£280.00
Car insurance £68.00
Car road tax £18.00
Car repairs & servicing£ 15.00
Medical expenses£7.50
Optical expenses£0.00
Dental expenses£0.00
Sky £0.00
Laundry & dry cleaning£0.00
Hairdressing £20.00
Pocket money *kids*£60.00 Have you got 2 children? £30 a month each? As well as paying for lots of activities? Can be cut down a bit I think.
Newspapers£0.00
Cigarettes£215.60 You cannot afford this, so stop, yesterday.
Meals at work£100.00 Make your own lunches, save at least £50pm right off the bat.
Pets £10.00
Other Outgoings: Specify daughter and son hot dinner £88.00
Other Outgoings: Specify scouts£22.00
Other Outgoings: Specify Daughter afterschool activity£100.00
Other Outgoings: Specify Son afterschool activity£50.00
Total Outgoings £2,503.39



Creditor Information (Debts)
Creditor Balance%
Monthly Payment
1NATWEST MASTERCARD £5,737.91 24.61% £130.00
2NATWEST OVERDRAFT£6,576.98 28.21% £121.00
3BARCLAY CARD £11,000.00 47.18% £295.33

Comments in Red. Formatting fixed as the forum mangled it and it hurt my Brian.


You do not need a DMP, you need to look at some significant overspending on day to day spending, and to look for any many 0% balance transfers you and your partner can manage to scoop out that CC debt as the interest rate is very high. You can save at least £350 a month here while not affecting day to day living in any significant way, along with any 0% deals can see you snowballing the debt, rather than a DMP.

sourcrates

StopIt wrote: »

Comments in Red. Formatting fixed as the forum mangled it and it hurt my Brian.
.

Poor Brian !!!!!

manue1970

I know I should stop smoking and I think about it every day
I will start making my own lunch and cut down on pocket money for the kids. I do cook every thing from scratch so how much do you think we should be spending on food per week? who would take me on 0% balance transfers when I have 16k of debt with cc...I am a bit confused

StopIt

manue1970 wrote: »

I know I should stop smoking and I think about it every day
I will start making my own lunch and cut down on pocket money for the kids. I do cook every thing from scratch so how much do you think we should be spending on food per week? who would take me on 0% balance transfers when I have 16k of debt with cc...I am a bit confused

After tax, you're on £36k a year, so you potentially could make some 0% applications as well as your partner. Even if you don't get ALL of the CC debt onto them, you can get some and it'll save significant sums.


For food and groceries, you should aim at £3 per person, per day. So £360, but that would include being able to scrap school meals and getting it done "In house". If you're making stuff at home, not making any lunches because you're paying for them separately, you're paying £13 a day between you for your food and grocery spending and not even getting lunch in the deal.


I'd suggest starting a spending diary as you're likely overspending on nice things but not realising the total cost at the end of the month.


I am not saying this out of malice. This summer, preparing for my DD first birthday party caused a £1,000 overspend over 3 months. I had to pull the emergency brake to avoid credit card overuse and getting into paying interest (Boo!).