DMP Newbie.....Questions.

Farmer_jones

Hi all

I have started a self managed DMP using the Step Change & North East Derbyshire CAB websites.

I have written & posted the holding letters to the non priority creditors, stopping all payments, requesting balances and interest rates reduced to zero.

My priority debts I can pay and bring them back into credit / clear within 12 months, the priority creditors seem content with the plan.

However the non priority (NP) creditors are not at all content. My non priority creditors are 3 Credit card companies; my solicitor (divorce work) and another solicitor. Total NP debt of about £50K.

Once I have brought the priority debts back into a positive condition I will be able to redirect those payments onto the non-priority debt. This will be about half of what these creditors will want as normal minimum payments.It will take me about 10 years to pay off the NP creditors at that rate.


I have some questions:

How do I deal with the NP creditors .. offer them a £1 a month until I can start paying in 12 months time or something else ?

Emergency fund: how much should I have ? At the moment I have no savings, and am tightly managing my money on a month to month basis. It gets a bit tight the last few days before pay day.

FJ

Fireflyaway

In my experience credit card companies are the hardest to please. Write to them explaining your situation and make it clear you only have x amount. You can't pay what you don't have. Stress you are offering the max that you can and any more would mean you can't meet your basic needs. Agree to contact them to up the payment as soon as you are able.
I had one particular company refuse to accept my offer and they really pushed me to 'accept' that I had to pay more. When I couldn't pay they just used that to prove I had broken the ' agreement' ! So don't be forced into something unaffordable. Work out your numbers and stick to your offer.

sourcrates

Are you a homeowner?

50k a lot of money, added to your priority debts, most likely a lot more in total.

Would insolvency be an option for you ?

Farmer_jones

Hi

Thanks for the advice.

The priority debts are actually quite low, mortgage arrears of around £3k and Tax around £1700, although the Tax bill may change for the worse.

The house is up for sale and once we settle the divorce, will give me enough money through equity to pay off the non priority debts, although it won't leave me with enough for a deposit.

I am in the situation were I can pay, although not right now. !

FJ

sourcrates

Farmer_jones wrote: »

Hi

Thanks for the advice.

The priority debts are actually quite low, mortgage arrears of around £3k and Tax around £1700, although the Tax bill may change for the worse.

The house is up for sale and once we settle the divorce, will give me enough money through equity to pay off the non priority debts, although it won't leave me with enough for a deposit.

I am in the situation were I can pay, although not right now. !

FJ

In that case you just need to explain your current circumstances to your creditors, and they will either wait, start legal action, or assign or sell to a DCA.

Either circumstance can be easily dealt with, so no worries there, chances are in a years time, things will still be as they are now.