DMP Mutual Support Thread - Part 12

Hopeforthefuture

Hi everyone. Can I start by saying how useful it has been to read and read through all your posts. It feels a little overwhelming at the moment with all the information to digest but I am hoping it will get easier over time.
I am looking to start a DMP with Stepchange soon but having read all the posts, am considering delaying that a few months in order to ensure I have an emergency fund behind me for things like MOT, boiler etc as it's inevitable something could happen once no access to credit anymore.
I have a ridiculous amount of debt at the moment and reached the point where it is a struggle to simply pay my minimum payments. I have never missed one yet though so that will come first I guess.
Would your advice to me to start by cancelling my direct debits for loans and credit cards and requesting the 30 day interest freeze...from there try to extend for two more months or so-in that time, building up an emergency fund?
Also, I have already used debt remedy to plan everything out but there is one thing that is unclear-I have a full time job so put in earnings from that but I also earn a little on the side from writing for kindle...I have included some of these earnings in the 'additional income' but as it differs every month, I just put the lowest I receive on the average month-would this be okay do you think?
Many thanks for your help in advance, I can't tell you much hope I have already simply by reading your progress and stories :T

January2015

Hopeforthefuture wrote: »

Hi everyone. Can I start by saying how useful it has been to read and read through all your posts. It feels a little overwhelming at the moment with all the information to digest but I am hoping it will get easier over time.
I am looking to start a DMP with Stepchange soon but having read all the posts, am considering delaying that a few months in order to ensure I have an emergency fund behind me for things like MOT, boiler etc as it's inevitable something could happen once no access to credit anymore.
I have a ridiculous amount of debt at the moment and reached the point where it is a struggle to simply pay my minimum payments. I have never missed one yet though so that will come first I guess.
Would your advice to me to start by cancelling my direct debits for loans and credit cards and requesting the 30 day interest freeze...from there try to extend for two more months or so-in that time, building up an emergency fund?
Also, I have already used debt remedy to plan everything out but there is one thing that is unclear-I have a full time job so put in earnings from that but I also earn a little on the side from writing for kindle...I have included some of these earnings in the 'additional income' but as it differs every month, I just put the lowest I receive on the average month-would this be okay do you think?
Many thanks for your help in advance, I can't tell you much hope I have already simply by reading your progress and stories :T

I would leave out the Kindle income - use it to save for emergency fund and eventually for full and final settlements. No one will ever know.

Cancel direct debits and standing orders for payments to creditors now. If you have debts with your bank (or an associated credit card) then open a new bank account somewhere you do not have any debts associated to. Don't use bank switching services. It's not hard to sort out setting up new payments for your priority bills.

Contact all creditors and tell them you are being supported by Stepchange to set up a DMP. Ask them to freeze interest and charges.

Let things start ticking over and then in a few weeks (before interest starts being added again), write to all creditors and advise you will commence DMP payment is XXXXX month. You decide when you are ready start. Explain that you have been struggling financially and have unexpected bills to pay (car, boiler - whatever you want) and to save a small fund for emergencies.

If you think 2 or 3 months will be sufficient, that's fine, but do not be afraid to stretch this for longer - up to six months if you need to. Nothing bad will happen and in reality your debts are more likely to be defaulted more quickly the longer you delay starting the DMP. The important thing is to keep in touch with you creditors and let them know you are setting up a DMP.

Start the process with SC, but agree a start date that allows you time to sort out your emergency fund. It's your DMP. SC are just there to support you - they do not dictate when it starts.

Suseka97

Hopeforthefuture wrote: »

..........Would your advice to me to start by cancelling my direct debits for loans and credit cards and requesting the 30 day interest freeze...from there try to extend for two more months or so-in that time, building up an emergency fund?
Also, I have already used debt remedy to plan everything out but there is one thing that is unclear-I have a full time job so put in earnings from that but I also earn a little on the side from writing for kindle...I have included some of these earnings in the 'additional income' but as it differs every month, I just put the lowest I receive on the average month-would this be okay do you think?

Firstly welcome

Regarding cancelling unsecured debt payments (Loans, CCs) the answer is yes - to stop paying now. But also you need to ensure you don't have any debts associated with your current bank (to avoid their 'right to offset'). Contact all creditors and advise that your financial circumstances are such that you are no longer able to sustain minimum payments and that you are seeking advice from a debt counselling service. Most tend to put the account on a 30 day hold as a matter of course. Also, its sensible to not launch into a DMP and give yourself a few months grace to set up that emergency fund.

As to the 'extra' income you mentioned - personally I wouldn't include in your I&E because it sounds as if its not guaranteed and therefore if you went a period of time with no additional income, you would cause yourself more hardship during those months. What you could do is set that money aside in a separate savings account so that you could build funds towards full and final settlements further down the line.

Hopeforthefuture

Suseka97 wrote: »

Firstly welcome

Regarding cancelling unsecured debt payments (Loans, CCs) the answer is yes - to stop paying now. But also you need to ensure you don't have any debts associated with your current bank (to avoid their 'right to offset'). Contact all creditors and advise that your financial circumstances are such that you are no longer able to sustain minimum payments and that you are seeking advice from a debt counselling service. Most tend to put the account on a 30 day hold as a matter of course. Also, its sensible to not launch into a DMP and give yourself a few months grace to set up that emergency fund.

As to the 'extra' income you mentioned - personally I wouldn't include in your I&E because it sounds as if its not guaranteed and therefore if you went a period of time with no additional income, you would cause yourself more hardship during those months. What you could do is set that money aside in a separate savings account so that you could build funds towards full and final settlements further down the line.

Thank you for the advice. Will Stepchange not look at my bank statements then to check income coming in? I thought I would have to include it. The trouble is that it varies so much from month to month to having a really low paying month in the likes of February to a much bigger amount in August when everyone is reading!
How would you advise to get in contact with creditors? Phone, email or letter? I also don't want to be contacted as much as possible by phone so should I include the instruction to please not contact me in that way?
Many thanks again!

Hopeforthefuture

January2015 wrote: »

I would leave out the Kindle income - use it to save for emergency fund and eventually for full and final settlements. No one will ever know.

Cancel direct debits and standing orders for payments to creditors now. If you have debts with your bank (or an associated credit card) then open a new bank account somewhere you do not have any debts associated to. Don't use bank switching services. It's not hard to sort out setting up new payments for your priority bills.

Contact all creditors and tell them you are being supported by Stepchange to set up a DMP. Ask them to freeze interest and charges.

Let things start ticking over and then in a few weeks (before interest starts being added again), write to all creditors and advise you will commence DMP payment is XXXXX month. You decide when you are ready start. Explain that you have been struggling financially and have unexpected bills to pay (car, boiler - whatever you want) and to save a small fund for emergencies.

If you think 2 or 3 months will be sufficient, that's fine, but do not be afraid to stretch this for longer - up to six months if you need to. Nothing bad will happen and in reality your debts are more likely to be defaulted more quickly the longer you delay starting the DMP. The important thing is to keep in touch with you creditors and let them know you are setting up a DMP.

Start the process with SC, but agree a start date that allows you time to sort out your emergency fund. It's your DMP. SC are just there to support you - they do not dictate when it starts.

Yes, I have a large overdraft with my bank so have opened a Nationwide current account and am going to start transferring everything over now.
In regards to stopping the DD's my loans/CC's etc, do i simply stop them and send out letter about financial hardship? Can I really not pay for 6 months so as to build up an emergency fund? I like the idea of going into the Stepchange DMP but it would be great to have some money behind me first for the things which crop up.
Sorry for all the questions, I just want to do this right and get myself sorted once and for all.

pinkpunto

Hi, This forum has been such a great help and have been following it and have had great advice. I!!!8217;m hoping someone can give me some advice though as in a real panic and worried sick.

I!!!8217;d notified my creditors that I am in financial difficulty and seeking advice from StepChange a couple times and had been trying to get an emergency fund together but had both car and boiler problems everything that an emergency fund should be for. I was also waiting for debts to default and go to debt collection agencies. All have been going that way except for my Marks and Spencer!!!8217;s credit card which is a Debt for £2,700 one of my lower debts! They advised that my debt was being referred to HSBC litigation department.

I received a letter from HSBC from a solicitor. Advising that they are now considering legal action against me and will send a letter of claim and if they are unable to agree a suitable solution with me they will start legal action.

I contacted StepChange again and they advised token payments and advised that I contact all creditors with this offer which I have done including my I&E and list of creditors.

All creditors have written back to me so far and have accepted a token
payment. I had said in my letter that all communication to be in writing which it has been so far.

My real worry now though is the action that HSBC have said they are going to take. I missed a call from them yesterday.

Has anybody had this experience with HSBC and can offer any advice as I don!!!8217;t know what to do and am worried sick now. Hoping someone can help! Thanks.

sourcrates

pinkpunto wrote: »

My real worry now though is the action that HSBC have said they are going to take. I missed a call from them yesterday.

Has anybody had this experience with HSBC and can offer any advice as I don!!!8217;t know what to do and am worried sick now. Hoping someone can help! Thanks.

Hi,

Every now and again a creditor will try to pursue legal action, why exactly are you worried sick ?

Unless a CCJ will affect your job, you have nothing to fear.

You do not actually go to court, its all done by post and online, if they send a claim form, you simply fill it in, and propose the same token payment you are proposing now, backed up by your budget.

All the court will do is ratify that amount to the creditor, and you pay it, much the same as you would in a DMP, the only difference is that payment will become a priority payment, as a pose to a non priority one, as they will have a county court judgement to make you pay, rather than you pay it voluntarily.

Nothing to worry about, all will carry on as normal, you may find this can all be sorted out with a simple phone call advising your about to enter debt management.

pinkpunto

Hi Sourcrates thanks for your advice. It was just the threat of legal action that scared me. I thought as I!!!8217;d sent them a letter with my I&E and list of creditors they would just reply by letter and accept the offer as my other creditors have.

I just built up the courage to call them and had a message that there was an emergency so call back.

So I!!!8217;ll see if I get chance later. If not will try again on Monday. Thanks again for your advice.

sourcrates

pinkpunto wrote: »

Hi Sourcrates thanks for your advice. It was just the threat of legal action that scared me. I thought as I`d sent them a letter with my I&E and list of creditors they would just reply by letter and accept the offer as my other creditors have.

I just built up the courage to call them and had a message that there was an emergency so call back.

So I`ll see if I get chance later. If not will try again on Monday. Thanks again for your advice.

Legal action is not a quarter bad as it sounds, you still pay the debt at an affordable rate, but the court sets the amount, using your budget as a guide, they make it sound like an old Baily trial, when really its no more than men in suits pushing around bits of paper.

Your not going to get arrested, your not going to prison, you do not appear in a court room, unless called in to explain something.

MA61

Have used the Stepchange tool and they are recommending asking for a Moratorium. I still have a bit go hope that I can get my finances back on track - I am wondering if anyone has any experience of asking for these? When I first got into debt in my 20s, I seem to remember all creditors were pretty good except HSBC who tried to get me to take out a loan and then got the bully boy debt collectors in to harangue me.

These are my big creditors:
AmEx, MBNA, Santander

Thanks as ever