DMP Mutual Support Thread - Part 12

Summer12

January2015 wrote: »

Move your bank account asap.... never bank where you have debt :eek:

I've never been asked for wage slips or bank statements by anyone other than Stepchange. Once we went self managed, no-one asked and if they did I would have ignored them

Over 2 years in self managed, paying token £1 per month to each creditor and happy to keep doing so

Yep already have one different account set up and just applied at the weekend for another. Accounts thing at work down at the moment so can’t change account number for wages to go into! New accounts already set up for OH. Direct debits being transferred. CCAs letters gone out and financial difficulties letters waiting to go as soon as confirmation of wages being set up into new accounts - i have certainly listened and taken all your great advice. Taking one month “on hold” then hopefully 6 months token for emergency fund set up time (maybe 12 if I can manage it). Just also need to formally set up the I&E. So much to do it’s a full time job in itself! Thanks again to everyone who advised against a secured loan to clear it all glad I didn’t go down that route now ( not that I probably would have got one anyway!)

System

Summer12 wrote: »

Can I ask if you have ever been asked to supply wage slips etc to back up your i&e sheet when going self managed. Our problem is most of our enforcable debt is with our bank so they know everything we spend on :eek:

No not at all. As others have already said though...first rule of DMP, set up a basic bank account where you have no debts. We went with N/wide. Basic account but with a debit card and no facility for overdraft so you can't get into trouble again.

mrsdann

Hi Newbie here so any advice would be gratefully received.
I have been robbing Peter to pay Paul for a while now and then to top it all I split from my partner and my wages decreased by a considerable sum each month. This has had a huge knock on effect on my ability to afford my debt payments.
To cut a long story short I currently have unsecured debts of 38K. These are through a bank loan, 3 credit cards, 3 catalogues, a large overdraft and a debt to DWP for an overpayment many moons ago. Currently my minimum payments on all but the overdraft are equal to nearly £1200 per month. I have been paying my loans and credit cards and then using the cards to pay for food and bills etc.
Anyway the constant worry is affecting not only my mental health but also my well being. (High blood pressure/anxiety/depression on top of a heart condition) I have now taken the first step and looked at my finances through step change and they advised a DMP. Reading through some of this thread though has now left me wondering what my first steps should be.
I have opened a new bank account to transfer my wages and bills into as my loan and 1 credit card is with my current bank.
What should I do now? Currently due to how I have been juggling I have only defaulted on one account. When I change my wages into my other account this will also default the overdraft.
Should I be sending letters before starting a DMP with Step Change?
Should I stop my payments and offer token payments?
Do I wait for all accounts to default and build an emergency fund with my disposable income?
Where do I start???? I feel so confused !!!

January2015

mrsdann wrote: »

Hi Newbie here so any advice would be gratefully received.
I have been robbing Peter to pay Paul for a while now and then to top it all I split from my partner and my wages decreased by a considerable sum each month. This has had a huge knock on effect on my ability to afford my debt payments.
To cut a long story short I currently have unsecured debts of 38K. These are through a bank loan, 3 credit cards, 3 catalogues, a large overdraft and a debt to DWP for an overpayment many moons ago. Currently my minimum payments on all but the overdraft are equal to nearly £1200 per month. I have been paying my loans and credit cards and then using the cards to pay for food and bills etc.
Anyway the constant worry is affecting not only my mental health but also my well being. (High blood pressure/anxiety/depression on top of a heart condition) I have now taken the first step and looked at my finances through step change and they advised a DMP. Reading through some of this thread though has now left me wondering what my first steps should be.
I have opened a new bank account to transfer my wages and bills into as my loan and 1 credit card is with my current bank.
What should I do now? Currently due to how I have been juggling I have only defaulted on one account. When I change my wages into my other account this will also default the overdraft.
Should I be sending letters before starting a DMP with Step Change?
Should I stop my payments and offer token payments?
Do I wait for all accounts to default and build an emergency fund with my disposable income?
Where do I start???? I feel so confused !!!

Hi and welcome :beer:

Don't panic - we've all been where you are and it get's so much easier quite quickly

Firstly stop all payments to your creditors. Do not worry about making token payments.

Then be brave and pick up the phone and call your creditors and tell them you are seeking financial support and advice from Stepchange. They will be fine with you. They will immediately put a 30 hold on all contact and hold interest and charges as well. They might ask for your Stepchange reference number - if you have it then fine to give it to them but don't panic if you don't - just tell them you are still sorting things out with SC and don't have it yet. They will be fine.

Then take a deep breath and come and chat on here. We will all help you muddle through the setup of your DMP and dealing with creditors

Edit: Don't be scared to tell your creditors you cannot pay them whilst you are sorting things out with SC. Again - they will be fine with this. They are used to this happening.

If you don't feel able to phone then use the online account messaging that some accounts have. If not then if you really can't phone them, then put this information in a short letter.

This is the only time I recommend phoning creditors - when initially starting a DMP. After that, everything in writing

mrsdann

Thank you so much for your reply. I have had a few text messages today asking me to call but I think I will take your advice and contact by online messaging as talking about it on the phone is still making me very anxious.
I have a new bank account and have transferred the balance from my old account into it. Do I cancel all direct debits now? The ones set up are for my mobile, insurances, prescription costs, rent, council tax etc. I was going to cancel each one after payment and then ring and set them back up in my new account.
Part of me is still terrified of taking this step whilst the other is totally relieved. Its a very strange feeling but hopefully it can only get better.

January2015

mrsdann wrote: »

Thank you so much for your reply. I have had a few text messages today asking me to call but I think I will take your advice and contact by online messaging as talking about it on the phone is still making me very anxious.
I have a new bank account and have transferred the balance from my old account into it. Do I cancel all direct debits now? The ones set up are for my mobile, insurances, prescription costs, rent, council tax etc. I was going to cancel each one after payment and then ring and set them back up in my new account.
Part of me is still terrified of taking this step whilst the other is totally relieved. Its a very strange feeling but hopefully it can only get better.

Will there be sufficient to cover the Direct Debits in your old account (either cash or overdraft) ? If so, let them go through on the old account. If you are worried about it then cancel them and contact each company and arrange to pay either over the phone for this month or set up a new direct debit.

It really, really does get better very quickly. You will soon not be panicking about making ends meet each month and you will not be scared of creditors.

NewbieNat

Hi Mrsdann

I'm at the same stage as you, and it is such a worry. I've just received my new basic bank card & account. I think I will arrange for my wages at the end of the month to go to my new account but pay the DD's from my old account & then close it. It's the timing that is making me panic!! I have money going into my account in 2 weeks time so will just withdraw that & pay into my new account. Does anyone know how long it takes to make a new DD active? Is there a template letter to send to my current bank regarding closing the account? Apologies for all the questions, I feel that I've taken on another full time job:eek:

January2015

NewbieNat wrote: »

Hi Mrsdann

I'm at the same stage as you, and it is such a worry. I've just received my new basic bank card & account. I think I will arrange for my wages at the end of the month to go to my new account but pay the DD's from my old account & then close it. It's the timing that is making me panic!! I have money going into my account in 2 weeks time so will just withdraw that & pay into my new account. Does anyone know how long it takes to make a new DD active? Is there a template letter to send to my current bank regarding closing the account? Apologies for all the questions, I feel that I've taken on another full time job:eek:

Don't send your existing bank a letter about closing the account - especially if you have existing debts such as credit cards or loans with the same bank. I assume you do if you have opened a new bank account elsewhere.

Leave the bank account to just idle away whilst you are setting up your DMP. Cancel the DDs etc after the last payment you want made from that account, cut up your cards, cancel any standing orders.... and then leave the account alone.

Once the dust settles and your DMP is up and running you can close it if you want to. Most of us couldn't close our bank accounts because we had overdrafts with them which went into the DMP pot... can't close an account that has a debt associated with it :rotfl:

[Deleted User]

January2015 wrote: »

Don't send your existing bank a letter about closing the account - especially if you have existing debts such as credit cards or loans with the same bank. I assume you do if you have opened a new bank account elsewhere.

Leave the bank account to just idle away whilst you are setting up your DMP. Cancel the DDs etc after the last payment you want made from that account, cut up your cards, cancel any standing orders.... and then leave the account alone.

Once the dust settles and your DMP is up and running you can close it if you want to. Most of us couldn't close our bank accounts because we had overdrafts with them which went into the DMP pot... can't close an account that has a debt associated with it :rotfl:

Very useful advice, as always, January:T

Still on the subject of bank accounts I have a Nationwide basic account now since starting my DMP and couldn't be happier with it:j. However, I still have my Lloyds full account (not sure what it's called:o) as I never closed it and neither did they. They have withdrawn my small arranged overdraft facility because I hadn't used it for 3 years, or at least that's what they told me. It featured on my DMP at the beginning but I paid it off asap:j. They sent me a new contactless bank card for this account fairly recently so I assume they still want me as a customer. There is no money in this account, I haven't used it since starting my DMP in 2013 but I'd like to hang onto it just in case. Getting a 'proper' bank account when I've a trashed credit record would be nigh on impossible:eek:.


I keep seeing various switching offers on MSE and elsewhere and wonder whether that might be possible. The money would certainly be a big help;). I assume they credit check in these cases but wonder whether they are so stringent when switching from a top bank to another. Any ideas please, or should I just sit on it for now until my defaults start dropping off my file during 2019?


You said at the end of your post that you can't close an account that has a debt associated with it. I still have a big Lloyds credit card debt and wonder why this is why they have left the bank account open. Not sure if the two things are related though.

January2015

carbootcrazy wrote: »

Very useful advice, as always, January:T

Still on the subject of bank accounts I have a Nationwide basic account now since starting my DMP and couldn't be happier with it:j. However, I still have my Lloyds full account (not sure what it's called:o) as I never closed it and neither did they. They have withdrawn my small arranged overdraft facility because I hadn't used it for 3 years, or at least that's what they told me. It featured on my DMP at the beginning but I paid it off asap:j. They sent me a new contactless bank card for this account fairly recently so I assume they still want me as a customer. There is no money in this account, I haven't used it since starting my DMP in 2013 but I'd like to hang onto it just in case. Getting a 'proper' bank account when I've a trashed credit record would be nigh on impossible:eek:.


I keep seeing various switching offers on MSE and elsewhere and wonder whether that might be possible. The money would certainly be a big help;). I assume they credit check in these cases but wonder whether they are so stringent when switching from a top bank to another. Any ideas please, or should I just sit on it for now until my defaults start dropping off my file during 2019?


You said at the end of your post that you can't close an account that has a debt associated with it. I still have a big Lloyds credit card debt and wonder why this is why they have left the bank account open. Not sure if the two things are related though.

Hi CBC :wave:

I wouldn't risk using your Lloyds account until the CC debt has been cleared because of the right of set-off .... but I'm sure you know that already However, nothing to stop you keeping the account open for a point in time when you can use it. Perhaps Lloyds have left it open in the hope you deposit money in it one day that they can then quickly nab towards clearing the CC debt..... we'll always wonder, but never really know :rotfl:

Regarding switching offers..... not available to us DMPers unfortunately. They do credit check as they are for accounts with lending facilities (aka overdrafts ) and they run a credit check when applying for them. I would have been switching whenever I could for the free money if they were available to us :rotfl: I will happily wait to see you post about switching and get paid to move banks as soon as your defaults disappear and you have a shiny, clean credit file

Have a great day :beer: