DMP Mutual Support Thread - Part 12

[Deleted User]

:wave:Welcome to Fo19nz, Rogue6 and anyone else who has joined our supportive group recently. Please keep posting your questions and experiences and we'll do our best to help. There's sure to be someone who's 'been there, done that' and first hand experience of a situation is invaluable:T.

Most importantly though, try not to worry about how a SC will affect you. The general concensus on here is that it was the very best thing we ever did once we'd admitted to ourselves that our debt situation was so bad. Facing up to our debts, even just totting them up and realising maybe for the first time just how bad things are, is a very big achievement:beer:. It's onwards and upwards from here, and I don't mean the debts escalating upwards;)


You've received excellent advice and reassurance from January and Suseka, 2 of our stalwarts who have made great strides to address their own debt situation and are always here to help others as they start on what seems like a very scary road. Everything we've always tried to do is suddenly turned on it's head, such as never failing to keep up with monthly payments, frequently by the skin of our teeth, even if they were only minimums. It's important to develop a different mindset now.


I can't stress too strongly how important an emergency fund at the outset will be to you. I hadn't found this wonderful support group before diving into my DMP and hadn't a penny to my name when I started. Massive mistake as all lines of credit are closed on a DMP, creditors cancel all credit cards and so on. Most of us had become adept at juggling our debt repayments, robbing Peter to pay Paul and managing somehow to squeeze a few pounds out of various credit cards as we live dangerously at their limits. On the DMP you will have to rely on money that you actually have in savings or wherever. I know I had several major panics in the early days when genuine emergencies occurred and I had absolutely nowhere to turn for help. SC were very amenable and dropped my repayments but they don't like it happening too often.



Don't be like me and go hell-bent at repaying your debts in the shortest time possible. A DMP is a marathon not a sprint. Of course, we all want to be debt free but not at the expense of having no life and being totally miserable for several years. That's the way for DMPs to fail as people just throw in the towel. Make sure you live a normal life especially if you have children but do it economically. Luxuries really should go but not the little pleasures that make life worth living.



I know this might be obvious (although I didn't do it at the start:o) but make sure you work out your income and expenditure really carefully. Don't miss a single thing out and make sure your figures are accurate. I underestimated some of my outgoings, and this came back to bite me as my DMP got underway. Then, before you fill in the SC form, as you've been advised, add a bit to all catagories and try to claim for more than you actually spend even if it's only by a few pounds. This will give you a bit of leeway. SC will assess your DMP repayments on the disposable surplus you appear to have after all bills, expenses and outgoings are paid. Make sure this isn't too high IYKWIM;). Some people have claimed for cigarettes even though they don't actually smoke, or pets that they don't have. I know it isn't strictly honest but people are making a genuine effort to do the right thing and repay their debts not just walk away from them. There is no harm in taking it slightly slower though whilst you have a relatively normal life.


Good luck:beer:

sourcrates

Rogue6 wrote: »

Fortunately, I've not missed a payment yet on any of my accounts but I've taken my DMP out to prevent that from occurring as I simply cannot afford my minimum payment amounts alongside my living costs (which I am now also reducing!).

Thank you in advance,

- Rogue6

Hi,


I`m not sure you fully understand how a debt management plan works, basically you repay what you owe, at a rate you can afford, so the fact you will not be making contractual repayments anymore, will in itself, lead to late payment markers, then defaults, or arrangements to pay markers.


That is par for the course, and cannot be avoided, best advice, is to cancel all your recurring payments straight away, save up an emergency fund, using those payments, then start your DMP when you are ready, whilst always keeping your creditors in the loop.

sourcrates

Fo19nz wrote: »

(1) I've read these threads and wondered about a DMP but equally am scared. I don't want to lose my house, or put that in danger in anyway.


(2) My son has his birthday next month and we are approaching Christmas - if I set up a DMP will my monthly payments literally be everything I can afford apart from the bare bones for food etc?


(3) How is the monthly sum that goes to creditors decided? Will I be able to pay £25 for my little girls ballet each half term, for example?


(4) If I do have one of these DMPs will my mortgage company know? And could these make them want to stop me having my mortgage with them? I have a fixed rate one now, the rate expires in a few years.


(5) I read on the threads that people suggest an emergency fund - how do you do this?

(6) Also, will I have to phone the credit card companies? Would I be better ringing them and asking for help from them directly before contemplating a DMP?

(1) All unsecured credit debts are non priority debts, the mechanism exits to lose your home, but there is a long court process to follow first, and you would have to be not paying anything to even be considered for this option, which is extremely rare, and in reality does not happen.


(2) A debt management plan is a totally informal arrangement between you and your creditors, you work out your budget, making sure you budget for everything, and i mean everything, what is left is called your disposable income, this is used to repay your creditors, on a pro-rata basis, it can be changed, up or down, at your discretion, should circumstances change.


(3) As above.


(4) With any kind of debt management you will get late payment/arrangement to pay markers/defaults etc, which will show on your credit file, most people in debt management stick with there current mortgage provider, as no credit check is usually required to change to a new product.


(5) Emergency fund is usually accumulated by with holding payments to your creditors, and topped up monthly from your budget set aside for that purpose.


(6) Individual credit card companies will only make temporary payment arrangements with you, if the problem is more long term, they will refer you to one of the free debt charities such as stepchange, which is of course, the right thing to do.


Hope that has helped you to understand the process a little better.

Steff90

Hi everyone (again!) :rotfl:

After adjusting my income and expenditure sheets with Payplan the advisor has recommended I enter a Trust Deed.

I have been trawling the internet for advice/experiences but not really getting anywhere so thought I'd jump back to DFW for advice! :D

Has anyone been in a trust deed/currently in one?
One of my worries is my car. I have my car on PCP finance which I have only just taken out in May this year and ends in 4 years time (May 2022). My question is when this ends, there is usually the option to pay the balloon payment which I most likely won't be able to pay, or take out a new PCP deal. I'm worrying now as even if I do just hand the car back I'll be left carless and this is something I rely on for work and getting my son to school.
Has anyone ever taken car finance out while being in a trust deed? I'll still be in one when my car finance ends if I do decide to go ahead with a TD.

Also - if I do decide to go ahead with a TD, can I tell Payplan I don't want this to start until another 3/4 months? I know people can hold off a DMP for a few months while they build up an emergency fund, but can I also do this with a trust deed?

As always thanks for any advice. I'm not taking the possibility of a trust deed lightly believe me! But since it's been recommended to me by Payplan I am doing my research to make sure it's the right decision! And I trust the advice I receive on this forum;)
:j

BeingDebtFreeStartsHere

Quick query if that is ok.......

Moving to self managed and all creditors have accepted our offers

We have one creditor - Nationwide - who we have an unenforceable debt with. I sent a letter to them a month ago when we decided to go self managed informing them that we would be paying a token payment of £1 per month as we are prioritising enforceable debts and asking for standing order details to make payments.

As yet we have not received any correspondence back - would you write another letter or just wait until they decide to contact us?

Thanks,

BDFSH x

sourcrates

BeingDebtFreeStartsHere wrote: »

Quick query if that is ok.......

Moving to self managed and all creditors have accepted our offers

We have one creditor - Nationwide - who we have an unenforceable debt with. I sent a letter to them a month ago when we decided to go self managed informing them that we would be paying a token payment of £1 per month as we are prioritising enforceable debts and asking for standing order details to make payments.

As yet we have not received any correspondence back - would you write another letter or just wait until they decide to contact us?

Thanks,

BDFSH x

Hi,


If its unenforceable why are you paying it at all ?


They appear to of lost interest in it, so why should you show any ?


Anyone contacts you about it in future refer them to its status, until then forget about it.

January2015

BeingDebtFreeStartsHere wrote: »

Quick query if that is ok.......

Moving to self managed and all creditors have accepted our offers

We have one creditor - Nationwide - who we have an unenforceable debt with. I sent a letter to them a month ago when we decided to go self managed informing them that we would be paying a token payment of £1 per month as we are prioritising enforceable debts and asking for standing order details to make payments.

As yet we have not received any correspondence back - would you write another letter or just wait until they decide to contact us?

Thanks,

BDFSH x

I agree with Sourcrates - if it's unenforceable stop corresponding with them.

I did this with my one and only UE debt. They kept writing to me offering reduced settlements. I could have ignored it completely, but decided to settle once they got down to 10% of the balance to settle.

I never answered a single letter until I got the one offering an amount I was willing to settle for.

BeingDebtFreeStartsHere

sourcrates wrote: »

Hi,


If its unenforceable why are you paying it at all ?


They appear to of lost interest in it, so why should you show any ?


Anyone contacts you about it in future refer them to its status, until then forget about it.

January2015 wrote: »

I agree with Sourcrates - if it's unenforceable stop corresponding with them.

I did this with my one and only UE debt. They kept writing to me offering reduced settlements. I could have ignored it completely, but decided to settle once they got down to 10% of the balance to settle.

I never answered a single letter until I got the one offering an amount I was willing to settle for.

Thank you both so much

I will wait until they potentially offer a massively reduced settlement figure otherwise ignore the debt completely and concentrate on driving my enforceable debts down.

BDFSH x

angelrach8

Hello, have been reading all your very good information and advic on DMP’s and trying to get my head around it all.
StepChange have recommended a DMP for me, currently have £25k of debt. Mostly on credit cards and one personal loan with an outstanding balance of £11k. All payments are currently up to date but will more than likely not be from this month onwards.
Unfortunately my circumstances changed this month and I have had to start paying out £850 in childcare out. So this hasnt helped with me trying to keep afloat with all my payments going out and has made my situation much worse.
I just had a couple of questions for you all before I start on my DMP journey.
I have a few smaller credit card debts and a small overdraft currently.
One of my credit cards (MBNA) still has nearly £3000 of available credit. Am I best off to do a money transfer from this card to pay off the smaller debts and my overdraft first? If I did, would they question why I made a transfer before then starting a DMP?
Also although I haven’t spoken with anyone at StepChange yet but have completed their online debt tool, do I need to send letters to all my creditors ASAP?
Thanking you in advance!

January2015

angelrach8 wrote: »

Hello, have been reading all your very good information and advic on DMP’s and trying to get my head around it all.
StepChange have recommended a DMP for me, currently have £25k of debt. Mostly on credit cards and one personal loan with an outstanding balance of £11k. All payments are currently up to date but will more than likely not be from this month onwards.
Unfortunately my circumstances changed this month and I have had to start paying out £850 in childcare out. So this hasnt helped with me trying to keep afloat with all my payments going out and has made my situation much worse.
I just had a couple of questions for you all before I start on my DMP journey.
I have a few smaller credit card debts and a small overdraft currently.
One of my credit cards (MBNA) still has nearly £3000 of available credit. Am I best off to do a money transfer from this card to pay off the smaller debts and my overdraft first? If I did, would they question why I made a transfer before then starting a DMP?
Also although I haven’t spoken with anyone at StepChange yet but have completed their online debt tool, do I need to send letters to all my creditors ASAP?
Thanking you in advance!

You will just be moving the debt by do a transfer from MBNA to other cards. You will still owe the same amount of money, but to a single creditor. I, personally, wouldn't bother transferring.

If you have made your mind up you are entering a DMP, the first thing to do is to stop all payments to your creditors, then write to them and let them know you are seeking support from Stepchange to deal with your debts and will keep them updated with your progress, tell them you are unable to make any payments at the moment (don't bother with token payments), request they freeze all interest and charges, and state that all communication regarding the account(s) must only be done in writing and you do not give them permission to contact you by phone.

Start putting any money you could have afforded to pay your creditors to one side to start an emergency fund. This is important as you will no longer have any access to credit.

When I started my DMP, I raided my credit cards by drawing cash out wherever I could. Yes it raised the debt balance but it gave me a start to my emergency fund. The debt balance went up a bit, but none of my creditor ever commented. I did what I needed to just to survive at the beginning of my DMP.