DMP Mutual Support Thread - Part 12

January2015

Time_To_Change wrote: »

Thanks for confirming this it really helps. I think I am just about ready to take the plunge and send my letters. I am going for it on my own so just wanted to make sure I am certain of everything. I havnt mentioned in my letters that I am possibly planning to release some equity to settle my balances after 6-7 years if my credit file allows as it sounds like most will just get sold off anyway. Is leaving this out of my offer letters best? Thanks again.

:eek::eek::eek::eek::eek:

Please, please, please do not release equity to clear unsecured debt.

You are converting unsecured to secured. Once into your DMP your debts will eventually (hopefully quite quickly) become zero interest. Taking money out of your home will incur interest and probably for a significant length of time.

Once you are in a DMP your credit file is shot anyway - so don't worry about that. Look at the positives of a DMP.... zero interest on all your debts..... if mortgage interest rates, utilities, counci tax etc. go up, DMP payments go down, because your creditors can only have any funds you have available AFTER priority debts. So if priority bills go up.... DMP payments go down. Creditors know, and accept this.

Not only should you not mention you are considering taking out equity to creditors..... you should seriously rethink this idea and stick with clearing the debts through your DMP.

sourcrates

Willing2Learn wrote: »

I don't agree that the question is irrelevant. You are signing a legal documents and all answers given as part of the application should be truthful. Stating an untruth has the potential to come back and bite you...hard...

The law sees to it, that our credit files are expunged of negative information every six years, so you must ask yourself is it fair of the lender to ask if you have “ever” been in a payment arrangement with your creditors.

How far back exactly is “ever” ?

It’s quite a non specific question really, the law says information should only be held for 6 years, therefore “ever” can only relate to the last 6 years in my opinion.

So if the information has dropped off your credit file, you should not have to declare it.

Suseka97

Time_To_Change wrote: »

Thanks for confirming this it really helps. I think I am just about ready to take the plunge and send my letters. I am going for it on my own so just wanted to make sure I am certain of everything. I havnt mentioned in my letters that I am possibly planning to release some equity to settle my balances after 6-7 years if my credit file allows as it sounds like most will just get sold off anyway. Is leaving this out of my offer letters best? Thanks again.

January2015 wrote: »

:eek::eek::eek::eek::eek:
Please, please, please do not release equity to clear unsecured debt.
Not only should you not mention you are considering taking out equity to creditors..... you should seriously rethink this idea and stick with clearing the debts through your DMP.

I have to second Jan15s advice here and urge you not to release equity from your home to pay off unsecured debts, for all the reasons given. I know you've said 'possibly planning to' but please don't turn that into 'definitely planning to'. Just settle into your DMP and let it trundle along until its natural end or save your overtime or extra income for F&Fs further down the line.

Time_To_Change

January2015 wrote: »

:eek::eek::eek::eek::eek:

Please, please, please do not release equity to clear unsecured debt.

You are converting unsecured to secured. Once into your DMP your debts will eventually (hopefully quite quickly) become zero interest. Taking money out of your home will incur interest and probably for a significant length of time.

Once you are in a DMP your credit file is shot anyway - so don't worry about that. Look at the positives of a DMP.... zero interest on all your debts..... if mortgage interest rates, utilities, counci tax etc. go up, DMP payments go down, because your creditors can only have any funds you have available AFTER priority debts. So if priority bills go up.... DMP payments go down. Creditors know, and accept this.

Not only should you not mention you are considering taking out equity to creditors..... you should seriously rethink this idea and stick with clearing the debts through your DMP.

Suseka97 wrote: »

I have to second Jan15s advice here and urge you not to release equity from your home to pay off unsecured debts, for all the reasons given. I know you've said 'possibly planning to' but please don't turn that into 'definitely planning to'. Just settle into your DMP and let it trundle along until its natural end or save your overtime or extra income for F&Fs further down the line.

Hi guys this is not something I have definitely decided on I just assumed it was a good way of decreasing the length of the DMP. I was hoping you guys would give your views on this as I wasn't sure if it was a good idea or not. I certainly wasn't planning on releasing a large amount. My thoughts were more that if I am say £3000-£5000 short on getting a large decrease on a settlement it would make sense as I could set up an overpayment to reduce the interest paid as I would not be paying a DMP each month. I guess in theory it does not work out like this. I feel a bit silly for suggesting it now lol. Thanks again guys

January2015

Time_To_Change wrote: »

Hi guys this is not something I have definitely decided on I just assumed it was a good way of decreasing the length of the DMP. I was hoping you guys would give your views on this as I wasn't sure if it was a good idea or not. I certainly wasn't planning on releasing a large amount. My thoughts were more that if I am say £3000-£5000 short on getting a large decrease on a settlement it would make sense as I could set up an overpayment to reduce the interest paid as I would not be paying a DMP each month. I guess in theory it does not work out like this. I feel a bit silly for suggesting it now lol. Thanks again guys

Don't feel silly for thinking about releasing equity. I have actually consolidated my unsecured debts via secured loans twice in the past - effectively releasing equity to clear my unsecured debts. I've now learnt the error of my ways :T

Even if you are £3000 - £5000 short of getting a decrease on a settlement you are still better off waiting and plodding through the DMP. Worse case scenario - you will only pay the £3000 - £5000 because the debts will be interest free on your DMP. Secure against your property you will pay interest, you are unlikely to get a top rate loan because of your credit history, which means you will pay over the odds to borrow the money, and finally.... you are placing your home at risk.

At the end of the day it really is your choice what option you take, but the vast experience of folks on this forum would wholeheartedly tell you to avoid moving unsecured debt to secured.

Suseka97

January2015 wrote: »

Don't feel silly for thinking about releasing equity. I have actually consolidated my unsecured debts via secured loans twice in the past - effectively releasing equity to clear my unsecured debts. I've now learnt the error of my ways :T

At the end of the day it really is your choice what option you take, but the vast experience of folks on this forum would wholeheartedly tell you to avoid moving unsecured debt to secured.

This is definitely the place to explore your options -so it was definitely not a silly question. I too made the very big mistake of consolidating unsecured debts into a secured loan and so too bear the scars of what was a dreadful decision (based on supposed good financial advice, at the time). Anyways - if I had my time again I would have gone down the DMP route back then and would have been debt-free many, many years ago. I'm still paying off that secured loan

HJM

Hi, me and my husband are thinking of a DMP and have been speaking to Stepchange. I'm really nervous about agreeing the best way forward. We have unsecured debt that has just spiralled, we are currently maintaining payments, have no missed payments but will take us years to clear it and we can't afford the basics.


I work in financial services and I'm worried a DMP will affect my employment? I'm in an admin role not advisory. Can it?


I've also read that the creditors can still apply for CCJ's whilst on a DMP?


Any advice would be appreciated.

January2015

HJM wrote: »

Hi, me and my husband are thinking of a DMP and have been speaking to Stepchange. I'm really nervous about agreeing the best way forward. We have unsecured debt that has just spiralled, we are currently maintaining payments, have no missed payments but will take us years to clear it and we can't afford the basics.


I work in financial services and I'm worried a DMP will affect my employment? I'm in an admin role not advisory. Can it?


I've also read that the creditors can still apply for CCJ's whilst on a DMP?


Any advice would be appreciated.

Hi

I was in a senior financial role with signatory authority - my DMP started at £95k. It has never impacted my role (although I was made redundant earlier this year so now don't have a role :rotfl:)

Creditors can apply for CCJs but rarely do. If you watch those Can't Pay Take it Away shows on TV you will come to realise the people who raise the court orders to recover funds are mostly individuals or small companies chasing paying for goods or services given, or not received as described etc. Banks and credit card companies very rarely take court action. There is a long, long road before any action happens, and the first major action (usually after defaulting the account) is to sell the debt on to a debt collection agency (DCA).

Even DCAs try and work with people for a long time before issuing court action. Even if they did eventually decide on court action they have to issue a letter before action - which essentially gives people the opportunity to try and negotiate a bit more.

I have been on my DMP for over 3 1/2 years now. For 2 of those years I have been making token payments. Every single creditor and DCA has been okay with that because I have kept in contact and kept them up to date with my situation (as I see it ).

The important thing to remember is to always keep in contact with creditors, and always tell them you will only communicate with them in writing and do not give them permission to phone you.

Honestly - don't worry about any impact on your job as there won't be any, and don't worry about CCJs as long as you plod through your DMP and stay in touch with creditors.

2017spark

Hi all - sorry, think this may have got lost yesterday, but any advice is appreciated

2017spark wrote: »

Hi all - hope you are all doing well.
I am currently in a period of building up an EF before starting my DMP with SC in November.
My DMP Is predicted to last 8 years, with a monthly payment of around £230.
I have been thinking about an IVA and whether this would be a better option - does anyone have any advice or experience of this? SC gave me a DMP and IVA as an option and I went with DMP.
I know the IVA would be 5 years, reducing my time paying - but does have consequences. At the moment I have no assets (company car and rented house) but one day would like to get a mortgage (still hoping!!). I currently do not work in a job that needs any kind of clearance or would be affected right now but redundancy is likely in the next few years if things carry on in the same way.
Any thoughts or advice is appreciated!!
thanks xx

sourcrates

2017spark wrote: »

Hi all - sorry, think this may have got lost yesterday, but any advice is appreciated

Hi,


Post an SOA and we can see what courses of action are open to you.