Step by Step DMP

Sorry if this is a silly question. I couldn't find the answer on the forum. But please can someone advise me step-by-step how exactly I would go about organising a DMP.

I would rather self manage and be in control. Rather than go through stepchange or another organisation. Just because I think it would work better for me doing it myself.
But not sure where/how to begin and how it works initially.

Thank you.
2017- 5 credit cards plus loan
Overdraft And 1 credit card paid off.

2018 plans - reduce debt
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Comments

  • fatbelly
    fatbelly Posts: 22,688 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
  • So I just send them letters saying that I want to offer reduced payments and ask them to freeze interest. And that's it?

    But then how do you stop them phoning you. Do you phone them. Some of mine have my old work phone number and I don't want them phoning my old work and letting all my colleagues know what is going on.

    I do really appreciate the link genuinely. But I was kind of hoping for maybe a human answer if possible because it's very tricky to understand.
    2017- 5 credit cards plus loan
    Overdraft And 1 credit card paid off.

    2018 plans - reduce debt
  • sourcrates
    sourcrates Posts: 31,205 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    So I just send them letters saying that I want to offer reduced payments and ask them to freeze interest. And that's it?

    But then how do you stop them phoning you. Do you phone them. Some of mine have my old work phone number and I don't want them phoning my old work and letting all my colleagues know what is going on.

    I do really appreciate the link genuinely. But I was kind of hoping for maybe a human answer if possible because it's very tricky to understand.

    You send a letter, and ask them to contact you in writing only, and to erase all contact numbers from there data base, they must comply due to data protection laws.

    That’s how you do it, it is that simple.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • jwil
    jwil Posts: 21,562 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I'm using NEDCAB in Fatbelly's link. It's brilliant, generates all the letters for you and you can edit them to add a line in about telling them not to call you. I did it, and have not had a phone call since.

    Simply - fill out the income/expenditure forms - there is guidance about how much to allow for some categories if you are not sure. Make sure your budget is not too tight as you won't have access to credit.
    Complete your debt details and the NEDCAB site will determine how much you have left and allocate the payment proportionally between your creditors.
    It will generate the letters, you edit if required, print and post them with your I&E.

    Once the creditors send you the payment information, you just pay as arranged. I send my payments over on payday by bank transfer and then forget about it for another month.

    Take some time to save an emergency fund first.
    "If you can dream it, you can do it". Walt Disney
  • Poor_Single_lady
    Poor_Single_lady Posts: 1,527 Forumite
    1,000 Posts Combo Breaker
    Thank you.
    2017- 5 credit cards plus loan
    Overdraft And 1 credit card paid off.

    2018 plans - reduce debt
  • StokieBecks
    StokieBecks Posts: 4,997 Forumite
    Part of the Furniture 1,000 Posts Photogenic Xmas Saver!
    You can speak to National Debtline and Stepchange for advice on how they feel is best to proceed with your situation, they will tailor advice to the information you give them. That then gives you an idea on your options - just because you seek advice doesn't mean you have to use their services.
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  • enthusiasticsaver
    enthusiasticsaver Posts: 16,018 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Even if you don't use stepchange you can still ring them for advice. There is a DMP thread which is useful. Lots of people manage their own and as sourcrates says you need to contact them asking them to contact you in writing only. The first thing is to write to your lenders asking them to freeze interest.

    A couple of things you will need to bear in mind. Firstly doing a DMP, self managed or not will show as defaults on your credit record which may affect remortgages. Is your mortgage due for renewal soon? Do you have any defaults showing yet? Secondly you will need a clean basic bank account with no links to any of your creditors. Thirdly you will need to save an emergency fund as you will have no access to credit. Once you have decided a DMP is what you want to go for you need to default immediately and save up an emergency fund. Do an soa and don't forget to build in allowances for everything before deciding what to offer your creditors.

    Many people have said doing it was the best thing for them but it is scary having no access to credit having relied on it for so long. It means though you are forced to live within your income and hopefully gets you to a place where you are managing to do that.

    Can you no longer get 0% balance transfers?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • System
    System Posts: 178,311 Community Admin
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    I used NEDCab.
    At tge start i only paid £1 to my creditors, and saved up a £1k EF over 3 months as not paying c.c payments.
    I then provided soa showing what I wanted to pay and padded my budget out to ensure I was properly budgeting for car maintenance and every eventuality. I was never called and I never had to speak to anyone. You get a tonne of mail as they have to send you so many set letters, but basically after the initial set up, it calms down and now the debts are defaulted I get a 1 per year check in. I've had defaults just over 18 months. And I'm already getting settlement offers.

    The main things that you need to consider are getting a new bank account if you hold any debt with your bank.

    It's scary, but it's also scarily simple. Xx
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • Poor_Single_lady
    Poor_Single_lady Posts: 1,527 Forumite
    1,000 Posts Combo Breaker
    So if a did a DMP and then tried to remortgage next year. But credit file showed defaults. What would happen then.
    2017- 5 credit cards plus loan
    Overdraft And 1 credit card paid off.

    2018 plans - reduce debt
  • System
    System Posts: 178,311 Community Admin
    10,000 Posts Photogenic Name Dropper
    You might struggle to get a deal - or you might get a really high interest deal - but worth posting this on the mortgage board and see what they say?
    I think after you have been on a DMP 2 years and keeping up payments etc, it's better ( that was from someone I spoke to at a bad debt mortgage company.) but NOTHING is impossible.

    The other option is you just let your current offer lapse, and then wait to get a new mortgage deal when your DMP is more settled in (but you are at the risk of rate rises in the interim as if interest rates rise your mortgage payment will go up.....
    It's possible that your mortgage payment might go down when you let your offer lapse anyway as if you fixed at 4.5% for example, the variable rate which you get when your offer lapses may be currently lower (e.g 3.99%) - but you'd need to work out if the variable rate goes up by 0.5% or 1% , could you afford the mortgage repayments even with your DMP.

    Another option (which someone might shout me down for saying!) is if you have equity in your mortgage which could release funds to clear your debt - your mortgage would go up, but hopefully less than servicing the credit card payments each month. The key thing with this is that if you add it to your 25 year mortgage, you will be paying a bonkers amount of interest to pay off that addition - so it should only be considered if you know you are not going to get yourself back into further debt - and if you ideally could manage the mortgage payment and make an overpayment to reduce your mortgage term - and pay back the debt that way. I'm not sure this last para is viable or good advice so hopefully someone here can put me straight!

    Another place to post your question is on the DMP sticky thread - many there have remortgaged.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
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