Slowly understanding my situation and I'm incredibly worried

Karonher

enthusiasticsaver wrote: »

The OP has priority bills of £1930 including car and secured loan. Add the £785 for DMP and the OP has outgoings of £2715 against a salary heavily dependant on overtime.

I had forgotten the other payments would not be in the DMP. Can the car go back, as in the next 2 and a half years you will be paying £8340 and still need a balloon payment?

This shows how to terminate the PCP

http://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

It would be inconvenient for a while but if you put the money you were paying away for 4 months you could buy a cheap runaround. Having had a quick look a 10 year old car could be bought for that. If you started building up a bit of a fund before the DMP starts, you could get a newer one.

theoretica

It is very noticable to me that you got into this situation by spending money before you earned it, yet two of your three concerns are about spending more money. A DMP will impact your future ability to borrow, but not for ever if you manage to straighten your finances out and get used to spending less.

patman99

Op, you need to base your DMP on your flat hours. Overtime is not garruantteed. It is only there whilst the need exists. If your boss decides that there is a consistent need for that number of hours to be worked, he could decide it would be cheaper to employ an extra pair of hands than to continue to pay overtime.

Whilst waiting for your DMP to begin, pay your creditors £1 a month and save the rest to use to replace your car.

System

atlinford wrote: »

2) my car is on PCP with approx 30 months left. SC estimate my debt to be cleared in 42 months if I repay £785 a month. If all my disposable income goes towards my DMP repayment, I would not be able to make the final balloon repayment, and my credit file would be so poor I'd be unable to finance another car. What do other people do in this situation?

What people do in this situation is buy a secondhand car to keep you going. Plenty out there for sub-£1000 that will keep you going. It's madness to pay the balloon payment - nobody does that. Most hand back and either re-finance or buy a car outright. Hand it back asap!

I read a really insightful article on car finance. Take your monthly payments and then substract the service costs, tax and insurance % for the month, then multiply that figure by amount of months left.

If you've financed the right car for your income, it should be around £5000 - £10,000, if you've over-stretched it would be around £20,000. Most importantly, only people with six-figure salaries are comfortable enough to have a car that's worth £30,000...and how many people out there have a car on finance that's easily worth that? And on a wage of say mid-20k? Car payments of £400 like it's nothing !!

gal1961

hi,just a brief note ,once you've entered your dmp make sure your debts default as quickly as possible then the six year default clock starts.from my own experience i never really thought this was important and not all companies are the same .so from entering a dmp 8 years ago some of the last defaults are just dropping off now!