Debt management help.

Welshie13

Hi guys.
I have been in a DMP with stepchange for 14 months paying £292 per month towards 2 loans. One with HSBC and one with Hitachi which has been taken over by Cabot.
Last month I started a new job and I am on a lower wage which is actually £400 less a month. I am definitely going to have to rethink my budget with stepchange and decrease my payment amount however I am worried that my creditors wont accept a much smaller amount and that this may involve them starting court proceedings. I have never missed a payment and have always paid on time. Does anyone know how I stand with this and what may happen if they don't accept a lower payment offer?
Im having sleepless nights over this, worrying.

Thank you.

fatbelly

On a debt management plan you pay what you can afford. Have a chat with stepchange and get a new plan.

You then start paying it. Creditors either accept it (which is the most likely option) or don't. If they don't then they have the option of a court claim. You fill in your income and expenditure on the claim form and the court makes an instalment order. So most likely they would gain nothing from the exercise.

However the concern from your post is that in your old situation you had £292 surplus. Now you earn £400 less. Can you afford anything at all? Should you be considering insolvency?

sourcrates

If your new job pays £400 a month less, first question has to be why take a lesser paid role when you have debts to service, if it was a necessary move, then according to your figures you are in a negative balance with your payments, so cannot afford anything.

How much is your total debt ?

you may want to consider a debt relief order, if you qualify, or possible bankruptcy (dependent on your debts and home situation).

Welshie13

Hi both,
Thank you for the response.
It was necessary to take a lower paid role as I was made redundant and just needed a job there and then. I am looking for a new role however it is difficult at the moment due to my son only being in school part time.

I recently paid off my car finance so that is saving me £190 a month however I can't get a debt relief order as I need my car for my job role as a carer and its worth over £1000.

By lowering my payment and entertainment expenses, I was hoping to pay £190 towards my debt which was previously my car payment.
My debt is now £13,000 in total.

fatbelly

It's difficult to advise further without more detail. Could you complete a statement of affairs?

If you were paying £190 per month plus your surplus (as determined by stepchange) of £232 then a cut of £400 is still going to leave you with very little - probably not enough worth setting up a dmp for. I wonder how much your car is actually worth on Parkers Guide (Private poor) and how long it would take to depreciate to under £1000 at a depreciation of 30% per year.