DPM is it worth the risk

William1910

Good afternoon

I have a question about a subject which is causing me concern. My wife and I!have built up a huge amount of debt following a disastrous house purchase. We ended up spending £75k!refurbing!an investment property that sadly!went wrong. The debt is spread over 3 unsecured loans at £25k per loan. We are at the point where we are unable to afford the total payments of £1250 per month. Looking into our options and seeking advice, a debt management plan appears to be our best option. As mentioned we have recently changed the loan providers in order to get a better rate of interest but this was only a month ago. My concern is that if we!decide to proceed with the debt management plan the loan providers!could consider this as a fraudlent transaction!because we!have clearly taken these loans out knowing that!there was a risk of payment problems.!Has anyone got experience in this field?!is there a high!chance that the!providers (one with a building society and two with banks) will pursue us through a court or is it likely that they will take a view that as!we are able to pay them back through a Debt management plan!they will accept this method?!Also, the reason we gave for taking the loans was "home improvements" we have not used the most recent loans for this we have used them!to consolidate the!amounts!- meaning we have lied. Again could this give them reason to pursue through a criminal court as it classed as a fraudlent action. Very concerning, of course this a very messy situation and!DPM seems like our best option to move forward but i don't want to open up a can of worms by doing so.

Thanks in advance.
Will

middleclassbutpoor

You should do a SOA first on here to see whether a DMP is the correct course of action for you.

Sparx

Also when did you take out each of the loans, what length of term and how many payments have you made against each one?

fatbelly

Link to soa is here

http://www.stoozing.com/calculator/soa.php

It's most unlikely there will be a court claim and pretty much zero chance of anything criminal. I've worked in this field a long time and never seen it.

If you're going the dmp route (or bankruptcy/IVA for that matter) your first moves are to open new bank accounts with bank families that are unconnected to your debts. Get your income and essential direct debits transferred into those and walk away from the old accounts.

The new accounts will start to build up an emergency fund while you get your new arrangements sorted.

Edit: I take it the investment property is sold now but you still own the one you live in? When you list your debts can you mark them me, wife or joint.