DMP Mutual Support Thread - Part 12

sourcrates

Plucky_Lion wrote: »

.

The one issue that I have is the overdraft that I have with HSBC. I have now gone over my overdraft and they have started to charge me a daily charge of £5. I have sent a letter to HSBC, letting them know that I am in financial difficulty and have asked for all charges to be stopped while I sort myself out. I was wondering if anyone knows if they will stop these charges. I do not have the money to get back into my overdraft at the moment and I am worried that the situation will get worse.

Thanks

Hi,

The overdraught is just another unsecured debt that will form a part of your DMP.

Its slightly more difficult with overdrafts, as you are not required to make regular repayments to them, they are repayable "on demand" so to speak, so can take a long time to default, but once defaulted, as with any CCA regulated debt, the balance is frozen, and no further charges or interest can be added.

Best to keep on badgering the bank to freeze interest or default you, either has the same effect, lots of folk are scared to contact there creditors and ask these questions, but thats what you should do, they wont bite you.

Hope your DMP journey goes well.

determinedtobedebtfree_2

Hi, please can someone give advice as the Co-Op team I need to speak to isn't open on a Sunday.

I have a DMP that my boyfriend doesn't know about. We moved in together last year, but we're young and have no joint finances. I pay the rent and bills out of my account (as when he moved in I had a job and he didn't, although he does now) so each month he transfers me half the rent and utility bills. You may say that this isn't a good idea with me being on a DMP, but I've never ever got behind on things like rent, utilities, phone bill etc. My debts come from store cards and catalogues.

I told him when I started my DMP that I was moving banks as I'd decided that I needed to concentrate on paying back my overdraft on my Co-Op one (which isn't a lie!) and gave him my new details. For the past 3 months he's transferred his half to my new account with no problem.

This morning he transferred £600 for rent and utilities but I didn't get it. I thought because it was a sunday maybe, but he checked the details - and has sent it to the wrong account!! The money has gone into my Co-op and has reduced my o/d by £600, but because the o/d has been turned into a debt due, I can't transfer the money back out.

All the articles I've read online say that there is a faster payments query system since January 2016 where his bank contacts my bank to try reclaim it and it should work as long as the recipient plays ball, but I was wondering if it's different here because of the DMP? Will the Co-op be rubbing their hands together that my debt has reduced by £600, or will they return for the money??

Freaking out a bit as cant speak to them until tomorrow.

Zenboor

Hi all,

I have finally decided to accept that I am in deep financial trouble so I would really appreciate your advice on how to sort this mess. This is the first time in my life I find myself in this situation. I am getting really desperate to be honest. I'm constantly worrying about our financial problem. I can't sleep or eat well. Even my work is beginning to suffer which I can't afford to lose!

I am 39 years old, married and a father to three wonderful kids aged 9, 7 and 3. I work full time as an IT professional earning £38000 a year. My partner has recently started working part time but earns just about enough to pay for her car insurance/petrol etc..

Our current outstanding mortgage stands at £125000 and our property is worth between £190000 - £205000 according to Zoopla so we don't have a lot of equity in the house. Our current fixed rate of 1.99% deal ends in October and we can renew around September time.

We recently had the Kitchen and Bathroom replaced and most of the downstairs re-plastered / redecorated so hoping this would have added some value to the property.

The debt is all in my name and I started this mess about 2 years ago and it is as follows: (Please note that the minimum payments will have to be paid around the 15th of each month with the next one being 15th June.




high res image hosting

As you can see, my current total debt stands at a massive £45000 with my next monthly payments totalling almost £1600. I have managed to secure a 2 month mortgage holiday plus I also did some overtime at work so I'm hoping to pay off a couple of the payday loans on the 15th June to save having to pay the interest. But as you can see from the below, I'm still not going to have enough to cover the payments and I don't know what to do!!!



I know a DMP is perhaps the best solution for me as all my debt is unsecured but I just don't know where, when and how to start. Can somebody experienced here please assist me with this mess? I've read this thread in its entirety but I have so many worries!

If I cancel the direct debits now, what will the payday loan companies do especially as the loans are all new (less than 1 month old)?

What kind of mortgage deal will Halifax offer us if I default on my overdraft ans credit card?

I've tried to workout a budget but as a family of 5 people on pretty much a single income I can't see myself affording to pay more than £400 per month towards my debt. At this rate it would take about 10 years to pay off but I guess I would have less stress and I can begin to enjoy my life again.

Please help me I just don't know what to do! Part of my doesn't want to ruin my credit history but then again I'm not in a hurry to get anymore credit for a very long time.

Thanks and apologies the long read.

torheb

Give stepchange a call they are so helpful and you can fill in the online debt remedy form, I'm no expert and we have only just started our DMP we also have £45k of debt and we are going to be paying £589 a month, they have said anytime you have any extra for whatever reason you can make one off payments to them and it brings down the term of repayments. The thought of no access to credit petrifies me but we really had no other option. I also spoke to national debt line through the online chat and they had suggested what many suggest here to drop to token payments while you weigh up your options then you don't have the stress of thinking how to pay everyone - there's lots about token payments in the thread at least it would give you time to think what the best option is for your family.

Sazzie23

Zenboor wrote: »

Hi all,

I have finally decided to accept that I am in deep financial trouble so I would really appreciate your advice on how to sort this mess. This is the first time in my life I find myself in this situation. I am getting really desperate to be honest. I'm constantly worrying about our financial problem. I can't sleep or eat well. Even my work is beginning to suffer which I can't afford to lose!

I am 39 years old, married and a father to three wonderful kids aged 9, 7 and 3. I work full time as an IT professional earning £38000 a year. My partner has recently started working part time but earns just about enough to pay for her car insurance/petrol etc..

Our current outstanding mortgage stands at £125000 and our property is worth between £190000 - £205000 according to Zoopla so we don't have a lot of equity in the house. Our current fixed rate of 1.99% deal ends in October and we can renew around September time.

We recently had the Kitchen and Bathroom replaced and most of the downstairs re-plastered / redecorated so hoping this would have added some value to the property.

The debt is all in my name and I started this mess about 2 years ago and it is as follows: (Please note that the minimum payments will have to be paid around the 15th of each month with the next one being 15th June.




high res image hosting

As you can see, my current total debt stands at a massive £45000 with my next monthly payments totalling almost £1600. I have managed to secure a 2 month mortgage holiday plus I also did some overtime at work so I'm hoping to pay off a couple of the payday loans on the 15th June to save having to pay the interest. But as you can see from the below, I'm still not going to have enough to cover the payments and I don't know what to do!!!



I know a DMP is perhaps the best solution for me as all my debt is unsecured but I just don't know where, when and how to start. Can somebody experienced here please assist me with this mess? I've read this thread in its entirety but I have so many worries!

If I cancel the direct debits now, what will the payday loan companies do especially as the loans are all new (less than 1 month old)?

What kind of mortgage deal will Halifax offer us if I default on my overdraft ans credit card?

I've tried to workout a budget but as a family of 5 people on pretty much a single income I can't see myself affording to pay more than £400 per month towards my debt. At this rate it would take about 10 years to pay off but I guess I would have less stress and I can begin to enjoy my life again.

Please help me I just don't know what to do! Part of my doesn't want to ruin my credit history but then again I'm not in a hurry to get anymore credit for a very long time.

Thanks and apologies the long read.

Hi

Welcome to the thread,

Really sorry I'm so rushed this morning,, have you tried the Stepchange on line debt remedy, it's free and can be anonymous if you wish. Fill it in honestly and it'll give you the best idea of what you should be able to afford to pay, but it'll stil be tough if you are used to having credit on tap. Get everyone, wife and kids etc, on board if you can.

Don't beat yourself up about getting to this point, we all did for various reasons, but do consider how your life needs to change.

Stay on the thread, we'll help you,

Saz

[Deleted User]

Zenboor

A very warm welcome to the thread. Please keep posting and asking questions as we've pretty much all been where you are now and have lots of combined wisdom (probably couldn't be described as 'wisdom in my case:o) which everyone is always willing to share. The motivation and encouragement from this thread makes a stressful situation so very much easier.


Don't panic about the size of your starting debt. Presumably it didn't amass overnight so you have to expect that it will take several years to pay off. To quote one of the political parties, there is no magic money tree;)


I started my DMP journey with a smidge under £57000 of unsecured debt:eek:. I am a pensioner with an OAP and a smallish work pension and have managed to repay well over half in 4 years. That has included a few months mid-term of paying token payments when I had massive emergency expenses that had to be met. The estimated length of my DMP was 6.5 years at the start, the estimated end-date at the outset would have been the end of 2019. This would have been unsustainable though as I'll explain . Incidentally, I haven't updated my signature for a couple of months so my totals will be slightly different, having paid more and owing less now:j


I am now self-managing and have built some flexibility into my payments as I started off like an express train, not claiming for a lot of the allowable things in a budget. My payments via Stepchange were far too high, but don't blame them as they just acted on what I'd told them I could afford. I started off paying over £720 a month (from my incomes alone) which was crippling, I was existing rather than living. There were times when I regretted going on a DMP at all. I hadn't discovered this wonderful thread then or I would have done things very differently. All I wanted was to be debt free at the earliest possible opportunity as, being a pensioner, time isn't a commodity I have unlimited supplies of:(.


After the first year when doing my annual review with Stepchange we adjusted the budget considerably giving me some much-needed leeway and only extending the lifetime of the DMP by about 6 months. They are there to help us and know that if people cut things back too severely their DMPs will likely fail. I recommend you give them a call, you're under no obligation at this stage. The phone lines are very busy though so be prepared for a very long wait.


I see that, like very many of us including me, credit cards, loans and the like feature very heavily in your debt list. Just be aware that once on a DMP all your credit accounts will be closed and you'll have no access to credit at all. Getting credit from new lenders will be nigh impossible as your credit rating will be very low indeed. This was the thing that scared me the most when setting up a DMP as, although too much credit had landed me in this mess, I didn't think I could manage without access to it, especially in an emergency. But I really must say that it became very liberating and having to budget and just spend money I actually had has become a very welcome way of life.


I realise that as pretty much the only bread-winner and with a young family you will find this lack of credit availability a major problem. You can only do what's right for your own situation, we all wear different shoes so to speak.


You've taken a major and brave step in confronting your problem and coming on here and talking about it. You should feel proud of yourself for that, warm congratulations:beer:


I really wish you the very best of success in deciding what course to take and in ridding yourself of this debt burden forever. Please read as much as you can of this thread and previous versions and keep posting and asking questions. There's no such thing as a dumb question, we've all been there. At certain times the thread is a bit quiet as some of the regulars don't post so often for various reasons. Someone will come along and help eventually though.


Good Luck to you and your family:)

determinedtobedebtfree_2

determinedtobedebtfree wrote: »

Hi, please can someone give advice as the Co-Op team I need to speak to isn't open on a Sunday.

I have a DMP that my boyfriend doesn't know about. We moved in together last year, but we're young and have no joint finances. I pay the rent and bills out of my account (as when he moved in I had a job and he didn't, although he does now) so each month he transfers me half the rent and utility bills. You may say that this isn't a good idea with me being on a DMP, but I've never ever got behind on things like rent, utilities, phone bill etc. My debts come from store cards and catalogues.

I told him when I started my DMP that I was moving banks as I'd decided that I needed to concentrate on paying back my overdraft on my Co-Op one (which isn't a lie!) and gave him my new details. For the past 3 months he's transferred his half to my new account with no problem.

This morning he transferred £600 for rent and utilities but I didn't get it. I thought because it was a sunday maybe, but he checked the details - and has sent it to the wrong account!! The money has gone into my Co-op and has reduced my o/d by £600, but because the o/d has been turned into a debt due, I can't transfer the money back out.

All the articles I've read online say that there is a faster payments query system since January 2016 where his bank contacts my bank to try reclaim it and it should work as long as the recipient plays ball, but I was wondering if it's different here because of the DMP? Will the Co-op be rubbing their hands together that my debt has reduced by £600, or will they return for the money??

Freaking out a bit as cant speak to them until tomorrow.

The Co-operative were amazing! I rang and they completely understood that if I didn't get this money back that I wouldn't be able to pay my rent; they transferred it to my new account, pretty much no questions asked. I'm so happy this morning to have it sorted!

Zenboor

carbootcrazy wrote: »

Zenboor

A very warm welcome to the thread. Please keep posting and asking questions as we've pretty much all been where you are now and have lots of combined wisdom (probably couldn't be described as 'wisdom in my case:o) which everyone is always willing to share. The motivation and encouragement from this thread makes a stressful situation so very much easier.


Don't panic about the size of your starting debt. Presumably it didn't amass overnight so you have to expect that it will take several years to pay off. To quote one of the political parties, there is no magic money tree;)


I started my DMP journey with a smidge under £57000 of unsecured debt:eek:. I am a pensioner with an OAP and a smallish work pension and have managed to repay well over half in 4 years. That has included a few months mid-term of paying token payments when I had massive emergency expenses that had to be met. The estimated length of my DMP was 6.5 years at the start, the estimated end-date at the outset would have been the end of 2019. This would have been unsustainable though as I'll explain . Incidentally, I haven't updated my signature for a couple of months so my totals will be slightly different, having paid more and owing less now:j


I am now self-managing and have built some flexibility into my payments as I started off like an express train, not claiming for a lot of the allowable things in a budget. My payments via Stepchange were far too high, but don't blame them as they just acted on what I'd told them I could afford. I started off paying over £720 a month (from my incomes alone) which was crippling, I was existing rather than living. There were times when I regretted going on a DMP at all. I hadn't discovered this wonderful thread then or I would have done things very differently. All I wanted was to be debt free at the earliest possible opportunity as, being a pensioner, time isn't a commodity I have unlimited supplies of:(.


After the first year when doing my annual review with Stepchange we adjusted the budget considerably giving me some much-needed leeway and only extending the lifetime of the DMP by about 6 months. They are there to help us and know that if people cut things back too severely their DMPs will likely fail. I recommend you give them a call, you're under no obligation at this stage. The phone lines are very busy though so be prepared for a very long wait.


I see that, like very many of us including me, credit cards, loans and the like feature very heavily in your debt list. Just be aware that once on a DMP all your credit accounts will be closed and you'll have no access to credit at all. Getting credit from new lenders will be nigh impossible as your credit rating will be very low indeed. This was the thing that scared me the most when setting up a DMP as, although too much credit had landed me in this mess, I didn't think I could manage without access to it, especially in an emergency. But I really must say that it became very liberating and having to budget and just spend money I actually had has become a very welcome way of life.


I realise that as pretty much the only bread-winner and with a young family you will find this lack of credit availability a major problem. You can only do what's right for your own situation, we all wear different shoes so to speak.


You've taken a major and brave step in confronting your problem and coming on here and talking about it. You should feel proud of yourself for that, warm congratulations:beer:


I really wish you the very best of success in deciding what course to take and in ridding yourself of this debt burden forever. Please read as much as you can of this thread and previous versions and keep posting and asking questions. There's no such thing as a dumb question, we've all been there. At certain times the thread is a bit quiet as some of the regulars don't post so often for various reasons. Someone will come along and help eventually though.


Good Luck to you and your family:)

carbootcrazy, your reply is very much appreciated!

So far I've taken the dreaded first step and worked out exactly how much I owe in total. Something I've been putting off for months!

I've also completed the debt remedy application on the SC website and based on the budget I can afford to pay £323 every month which means it will take 11 years to pay off the debt (assuming no interest and charges are added!).

My partner is aware of the situation and she has been very supportive. I think she just wants the old me back to be fair as I've been so stressed recently that family life has suffered. Even the kids are asking me why I look so sad and miserable all the time.

I get paid again on the 15th and with the overtime and mortgage holiday I have an extra £1400 to pay off some of the Payday loans and my other credit commitments. However, I have the below questions so would really appreciate if you or anyone else can help provide answers.

1) The general advice here is to build up an emergency fund before starting the DMP. Do I cancel the direct debits then contact all my creditors to inform them that I will not be able to make the payments?

2) How many missed payments do I need before requesting the application pack from SC?

3) I have an overdraft and a credit card with Halifax our mortgage lender. The current fixed rate ends in October. Will defaulting on the overdraft and credit card affect our switch to another mortgage deal?

4) In the event we're forced to switch to the Halifax SVR, our monthly mortgage payment will go up by £115. Do I have to include this in my SC budget? This will mean a further reduction in the monthly debt repayment amount.

5) How do I make sure that all my creditors add default notices to my credit report?

6) What's the best way to deal with the Payday loan companies as they're the ones who charge the most interest?

Thanks for all your help in advance.

[Deleted User]

Zenboor wrote: »

carbootcrazy, your reply is very much appreciated!

So far I've taken the dreaded first step and worked out exactly how much I owe in total. Something I've been putting off for months!

I've also completed the debt remedy application on the SC website and based on the budget I can afford to pay £323 every month which means it will take 11 years to pay off the debt (assuming no interest and charges are added!).

My partner is aware of the situation and she has been very supportive. I think she just wants the old me back to be fair as I've been so stressed recently that family life has suffered. Even the kids are asking me why I look so sad and miserable all the time.

I get paid again on the 15th and with the overtime and mortgage holiday I have an extra £1400 to pay off some of the Payday loans and my other credit commitments. However, I have the below questions so would really appreciate if you or anyone else can help provide answers.

1) The general advice here is to build up an emergency fund before starting the DMP. Do I cancel the direct debits then contact all my creditors to inform them that I will not be able to make the payments?

2) How many missed payments do I need before requesting the application pack from SC?

3) I have an overdraft and a credit card with Halifax our mortgage lender. The current fixed rate ends in October. Will defaulting on the overdraft and credit card affect our switch to another mortgage deal?

4) In the event we're forced to switch to the Halifax SVR, our monthly mortgage payment will go up by £115. Do I have to include this in my SC budget? This will mean a further reduction in the monthly debt repayment amount.

5) How do I make sure that all my creditors add default notices to my credit report?

6) What's the best way to deal with the Payday loan companies as they're the ones who charge the most interest?

Thanks for all your help in advance.

Good Morning, Zenboor.

Sadly, I can't help with most of your queries, fortunately having paid off the mortgage many years ago and never having had a Payday loan.

You don't need to miss any payments before requesting an application pack from Stepchange. Neither do you need to complete all the banking details etc and return it to SC straight away. The longer you can eke out the first stage the better. I went straight from managing to make full payments (by the skin of my teeth and robbing one credit card to pay another and relying on credit cards for even the basic groceries every month:o) to starting my DMP. If only I'd seen the advice on here and built up an emergency fund before diving in then things would have been much easier at the outset.


There's lots of good advice given about taking a few months out so I recommend reading the thread. Look for posts by such people as January2015 who has explained the stages very clearly. I'm sure someone will be along to give you some advice on this, better than I can.


You need to keep your creditors 'in the loop' though, don't just stop paying and disappear off their radar as they'll be phoning you non-stop:eek:. Write to/contact your creditors and inform them that you are taking advice from SC and are in the process of setting up a DMP. Some will ask for your SC reference number which you won't have yet, but they will (should) all agree to stop interest and charges for 30 days. There's more information on this on the thread so please search for it as there's bound to be more clarification.


As for defaults, there seems to be no rhyme or reason to if/when creditors will default. Collective wisdom is that by paying nothing for as long as possible before starting your DMP the creditors will default after 3-6 months. This is not guaranteed though, some (like Barclaycard I gather from reading of people's posts) take years to default. Again, please try to find some time to read this thread in it's entirety. Daunting I know but well worth it. If you have already been defaulted and it is not showing on your credit report then contact the individual creditors. Be aware that some creditors don't report to the CRAs all that speedily. Also, just because a creditor sends a Default notice to you it doesn't necessarily mean you have been defaulted. It's a case of 'we might default you', probably to scare people to pay up;)

One of the very first things you need to do is set up a 'clean' bank account with a bank that you have no debts with. This is to have your salary etc paid into and for your DDs to go out of. Lots of financial institutions are involved with each other in some way so make sure your new account is not under another one's 'umbrella' so to speak. Once on a DMP you will only qualify for a Basic account. A lot of us have the Nationwide FlexBasic account, it's very good and does everything I need it to do (without an overdraft, obviously, and with no chequebook but they are of no interest to me anymore). Maybe, pre-DMP you can still get a 'normal' account but I'm sure I've seen people advise not to use the switching procedure, but enter account details yourself. I expect someone will advise more on this. The bit below is taken fron the National Debtline website which I recommend your looking at for the wealth of onformation about debt and the various options for repaying it.

If you are struggling to pay your non-priority creditors, your bank may use any income that comes into your account to pay towards any debts you have with them. This is known as their 'right of set off'. The Financial Conduct Authority's Banking: Conduct of Business sourcebook (BCOBS) contains guidelines about how creditors should use this right. If they do not follow these guidelines, you could make a complaint. You should also consider opening a new bank account which is separate from all your debts to get your income paid into. Once your income is being paid into this new account, cancel any old direct debits and standing orders on your old account. Only transfer direct debits and standing orders for essential bills to the new account. We have a list of basic bank accounts that do not offer any credit facilities

I hope this helps a bit. Someone else who has experience of your specific problems will help you more I'm sure:)

Julie67

Zenboor Just to add, we are on a Self managed DMP having previously been with Stepchange. If you intend to remortgage with the same company it seems to be fairly straightforward even on a DMP. I think it would be different if you tried to move your mortgage elsewhere.
It's so hard making that leap from being someone who can use credit whenever and knowing that once you take this step you can't, and its not an option for the foreseeable future. But that in itself is very freeing once you get the initial stages over and your living on a sensible budget you will feel so much better , happier and in my case, able to sleep at night.
Our debt was almost £50,000 when we started and we are down to the low twenties. Good luck with your journey, loads of wonderful people and advice on here.:)