DMP Mutual Support Thread - Part 12

Maverick87

January2015 wrote: »

Hi and welcome

I think we all thought we could afford our credit payments until the point we realised we needed help. I, for one, was definitely making full payments to my loans and credit cards right up to the point I admitted I was working and living just to pay the creditors and there was nothing left for us to live. Everything we did was done on credit

You are definitely not wasting your time. When you work out your budget make sure you put the maximum you are allowed for each category and don't try and skimp and save money to give more to creditors. It's important you are realistic or you are more likely to fail in your DMP if things are still too tight for you to live reasonably comfortably.

Keep posting and we will all help with your journey. Welcome to the wonderful world of DMP :beer: Seriously we all love our DMPs

Thank you so much, already love this place! You are right when I say I have £40 a week after food shopping that is purely covering direct debits out of my account and doesn't allow for any kind of spend like clothing/days out/birthdays/car maintenance etc.

It's very daunting but I am slowly piecing together the required steps which appear to be something like the below at the moment.

1) Visit step change and fill out their budget to work out what you can afford to repay (don't make this too tight)

2) Open a basic bank account with Nationwide (I don't owe them anything) and move my wages and any other type of income (childcare) to that bank, along with Direct debits for Mortgage/utilites/car. (anything other than my unsecured loan and credit cards)

3) Write/email/online message all credit card companies, and loan and explain I am in financial difficulty, I am unable to make the necessary minimum payments and request that all interest and charges are frozen while I liaise with SC to put a repayment plan in action. Notify them that I will be making a £1 token monthly payment until this repayment plan begins. (Scary!)

4) The aim of the above is to get them to default the account? (Even more scary!) At which point, 6 years on from this default date, my credit rating will be clean of this default.

5) Do not get the ball rollingwith Stepchange for 3 months, (in which time - save the £1200 currently going on credit cards to a savings account for an emergency fund - What is the purpose of this? If the boiler need replacing for example?

6) Start the DMP with SC - Is this just a simple procedure or do you have to be accepted?

Questions at the moment which hopefully I will come across reading through this thread is, I had my wife take out some balance transfer cards to spread some of the debt, didn't really want to include her in this but as £15k of the debt is in here name it sounds like I will have to?

My fixed mortgage term comes to an end in 4.5 years, guessing I will just have to move over to the variable rate until I hit the 6 year mark since defaults on my credit file before I will be able to remortgage for another fixed term?

The_Analyst wrote: »

Well done for coming clean and facing up to your debt. As others have suggested, working out a budget is a really good idea as all DMP Companies will look very closely at your affordability and will look to take every penny of your disposable income so its essential you document everything.

7 years ago I was in a DMP with close to 50k of debt. 2 years or so ago I switched to direct payments with my creditors and will be debt free 6 months..

I have a budget template you might find useful. Its one I've used with my creditors to confirm disposable income (and therefore agree monthly payments)
Let t me know if you have any use for it and d I'll post it on here or send directly

That would be brilliant if you could. I already have one but I made it myself and it's a bit messy.

Well done! I fully expect my salary to increase over the next 2 years, an you increas the amount you owe or are you better off saving it up for the day you want to try a F&F with one of the cards? Why did you go over to direct payments, is there a benefit?

DMP_Tiger

Maverick87 wrote: »

2) Open a basic bank account with Nationwide (I don't owe them anything) and move my wages and any other type of income (childcare) to that bank, along with Direct debits for Mortgage/utilites/car. (anything other than my unsecured loan and credit cards)

If your credit file is still ok at the mo, Nationwide do a Flex Plus current account and for a £13 per month fee, you get Travel insurance, car breakdown recovery and mobile phone insurance. If it's a joint account, you will both get car breakdown recovery.

They will check your credit file first but as long as it's in reasonable shape and you are not applying for an overdraft you should be ok.

[Deleted User]

Maverick87 wrote: »

5) Do not get the ball rollingwith Stepchange for 3 months, (in which time - save the £1200 currently going on credit cards to a savings account for an emergency fund - What is the purpose of this? If the boiler need replacing for example?

Welcome to the thread and well done on taking the first scary step on the road to debt freedom:T:beer:. We've all been there so know what it feels like.

In a rush but will just answer this query for now. The point of the emergency fund is to have a safety cushion behind you for whatever life throws your way. Once on a DMP all the credit card accounts that are included in the DMP will be closed and you'll not be able to use them. I found that having to budget and spend only the money that actually belonged to me was a sobering but strangely uplifting experience. So the EF/ Savings, or whatever you choose to call it is to cover anything extra/unusual/urgent which isn't covered by your budget that you'd normally just pay for with your plastic.

Some people save this money towards Full and Final settlement offers but you aren't far enough down the line for that yet. The best settlement offers tend to come after a few years of reduced payments

Billy12345

Hi


I know this is a very busy place and posts drop down really quick but could someone give me advice on my last post about a DRO.


Hope someone can help

[Deleted User]

Billy12345 wrote: »

Hi


I know this is a very busy place and posts drop down really quick but could someone give me advice on my last post about a DRO.


Hope someone can help

Sorry, no experience or knowledge of this so can't help you.

sourcrates is probably the person best placed to help you but I haven't seen him posting for a while. Maybe send him a PM.

Maverick87

:beer: Call made to step change :beer:

Can't believe how much my outlook has improved in less than 24 hours.

Took advice from here and made sure we could still live comfortably and not make it too tight, with 50k of debt the repayment time is coming in at 14 years with £300 per month. Sounds low and too long for me, anybody else had that level of payment accepted before without issue?

Another quick question - Stepchange advise adding my budget to the notification to my creditors that I am working with them, surely I don't need to send that to them?

DMP_Tiger wrote: »

If your credit file is still ok at the mo, Nationwide do a Flex Plus current account and for a £13 per month fee, you get Travel insurance, car breakdown recovery and mobile phone insurance. If it's a joint account, you will both get car breakdown recovery.

They will check your credit file first but as long as it's in reasonable shape and you are not applying for an overdraft you should be ok.

It's poor at the moment, had to go for a basic

carbootcrazy wrote: »

Welcome to the thread and well done on taking the first scary step on the road to debt freedom:T:beer:. We've all been there so know what it feels like.

In a rush but will just answer this query for now. The point of the emergency fund is to have a safety cushion behind you for whatever life throws your way. Once on a DMP all the credit card accounts that are included in the DMP will be closed and you'll not be able to use them. I found that having to budget and spend only the money that actually belonged to me was a sobering but strangely uplifting experience. So the EF/ Savings, or whatever you choose to call it is to cover anything extra/unusual/urgent which isn't covered by your budget that you'd normally just pay for with your plastic.

Some people save this money towards Full and Final settlement offers but you aren't far enough down the line for that yet. The best settlement offers tend to come after a few years of reduced payments

Ok thanks that all makes sense thanks, I'll be suggest 3 months of £1 followed by the standard DMP payments

floridajen

Had a further letter today from PRA. This one says " we enclose documents as requested. Please contact our office within 10 days to discuss the account further and to help come to a mutually acceptable agreement in order to settle the outstanding amount"

The only enclosure was a copy of a statement of the account. No signature or date etc.


I am sorry to ask but if anyone can advise me what I should do I would be very grateful.

sourcrates

Billy12345 wrote: »

Hi all


I have a DRO query and was hoping someone here could help.


I have a DMP which is ticking along nicely however my wife's has her own debts for which she is seeking a DRO. She has no income as she looks after the kids and we have decided to go down the DRO route with the help of SC.


SC have gone through everything but have to check to see whether she is a beneficiary of our house. The mortgage is solely in my name but obviously we are married so she would have rights to the property. SC are checking with their insolvency practitioners but, following the criteria for a DRO, this shouldn't make a difference as all the bills are in my name, the house is in my name so on paper she has no asset.


I'm a tad confused by this and SC appear to be taking ages to answer this query.

Hi,

Sorry, you are right, this thread is getting very busy.

I am not 100% sure on this one, I have PM’ed Fatbelly, who is an intermediary, hopefully he will answer the question for you.

sourcrates

floridajen wrote: »

Had a further letter today from PRA. This one says " we enclose documents as requested. Please contact our office within 10 days to discuss the account further and to help come to a mutually acceptable agreement in order to settle the outstanding amount"

The only enclosure was a copy of a statement of the account. No signature or date etc.


I am sorry to ask but if anyone can advise me what I should do I would be very grateful.

What exactly did you ask for ?

fatbelly

Billy12345 wrote: »

Hi all


I have a DRO query and was hoping someone here could help.


I have a DMP which is ticking along nicely however my wife's has her own debts for which she is seeking a DRO. She has no income as she looks after the kids and we have decided to go down the DRO route with the help of SC.


SC have gone through everything but have to check to see whether she is a beneficiary of our house. The mortgage is solely in my name but obviously we are married so she would have rights to the property. SC are checking with their insolvency practitioners but, following the criteria for a DRO, this shouldn't make a difference as all the bills are in my name, the house is in my name so on paper she has no asset.


I'm a tad confused by this and SC appear to be taking ages to answer this query.

Hi

If you search the DRO board you will find that this is something Stepchange often get their knickers in a twist about.

We have pointed out repeatedly that the guidelines refer to established beneficial interest.

Looks like I last wrote about this in March, in this post, and your situation is the same.

https://forums.moneysavingexpert.com/discussion/5809534/dro-living-with-my-partner-who-is-a-homeowner