Debt management plan questions

amy12

I’m comsidering a DMP for myself. Here’s my situation.

I have around £20k of debt (including a car finance, credit cards, overdrafts and loans)

I currently live with parents and hoping to rent my own place soon. Will this be possible with a DMP in place?

I have a vehicle on finance, is this likely to be used as an ‘assett’

Also, is it going to effect my credit rating so much? It is already pretty low but just need to know this for the house really...

Thanks

findingthisdifficult

Hi,

I'm not a prolific poster so can't help you with all of your questions.
It might be a good idea to post a statement of affairs to see if there is any way you can pay down your debt quicker.

I took the below from step change website to help with how a DMP would affect your ability to rent a home.

Would my DMP stop me getting a mortgage or tenancy?

Renting; Starting a new tenancy while you're on a DMP may be more difficult because some landlords will want to check your credit file. They may be less willing to accept you as a tenant if you have negative information such as missed payments or defaults on your credit file. Landlords can only access your credit file with your permission, and you'll be asked to sign a form giving your consent first.

Smaller private landlords and letting agents wont always use information from credit reference agencies. Some will only check public records. They don't need your permission to do this, but the information they can find will only tell them if you have a recent history of court action or insolvency. It wont tell them about defaults or missed payments.

I'm sorry I can't really help you further, hopefully someone else will be along soon with more advice.

freshstart11

I had CCJs and defaults the lot when I rented my previous property. I was just very upfront with my landlord and he appreciated it, and rented me the property.

sourcrates

Hi Amy,

A debt management plan is an informal unregulated arrangement, so there are no hard and fast rules, you only have to give up assets in bankruptcy, certainly not a DMP.

The DMP itself, as it’s not a formal arrangement, will not show on your credit file, however defaults from your debts will, renting is still possible, lots of DMP’ers rent.

A bad credit record is a small price to pay to be debt free.

Edi81

If you!!!8217;re in this situation whilst living with parents and presumably having lower cost of living outgoings how in earth are you going to cope living alone?

fatbelly

Let's deal with the car first. You need to be clear about what the 'finance' is. So check your agreement.

If it is a regulated loan then the car is yours now, the loan can go into a dmp.

If it is hire purchase/conditional sale then the car becomes yours after the final payment is made, and this may be a large final payment.

If it is a lease agreement the car is never yours.

It is not clear from your post whether you are planning a dmp on the basis of your surplus income now or your surplus income after moving into a rented place. The two scenarios are likely to be vastly different and there is no point starting one now only to have it fail in a few months. My conclusion is that you might as well continue juggling until you have stable accommodation and look at the situation then.

To be clear, your credit file is not damaged by the dmp itself as the providers, should you choose to you one rather than doing one yourself, do not report to the credit reference agencies. The damage is done by the lenders who report late payments, defaults and arrangements to pay.