Possible self managed DMP

booksandbacon

Hey Y'all, I'm looking for some advice...

My partner and I are £36k in debt, £36,294 to be exact. Credit cards, personal loans, payday loans (absolute madness, and yes more than one). None of these days are "joint", technically, but we want to pool everything together as divided the debts in each of our names is roughly the same, we each earn about the same amount of money and we share all household bills 50/50.

I also want to set up a DMP and I really want to manage this ourselves rather than using StepChange. We've sent letters out to each of the creditors detailing that we are in financial difficulty and would like to freeze any interest for 30 days while we get things in order. I'm using the advice from StepChange and National Debtline as well as their templates. Currently working on our budget and waiting to hear back from creditors to see what the current balance is and if they'll agree to freezing the interest.

I guess what I would like to know is:
1. Is self-managing a good idea? I'd like to do it so that I can have some flexibility over paying more occasionally - we both work overtime but this can be irregular. Also when we do have the lump sums I'd like to be able to clear a whole debt out in one go
2. Will the creditors accept our "joint" DMP even though each of the debts are in single-name only?
3. I've worked out what we can currently afford to pay towards the debts and can see that some won't be paid off for 30 years. I know that I've allowed some wiggle-room in the budget, and overtime should make some heavy dents so it won't actually be 30 years, but cor blimey...(not really a question as such, just a freaked-out statement)

Any help, advice, insight, commentary welcomed...

sourcrates

Hi,


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January2015

Hi

As someone who is self-managing their DMP, I can say it's quite a simple process. However, I would say you need to make sure you have really had your lightbulb moment and understand how to live within your means first.

For me, I had one year of being in a DMP with Stepchange to learn the discipline. Others, including you, may not need that but I certainly did.

When working out your budget ensure you allocate the maximum possible for each category - when using Stepchange or NEDCAB websites, such as the debt remedy tool if you put in a figure too high it will warn you. Just adjust it down until there is no warning. If you put in a figure and no warning comes up.... adjust up until you see a warning that it's too high and then bring it down a bit - if you see what I mean.

Don't make the amount you pay to creditors leave you living with a tight budget. That's how to fail at a DMP. If it's too tight and you have no wriggle room you will struggle to stay on track.

Don't stress over the length of time forecast for a DMP to take. It's a moving target and will change as you move through your DMP. My was forecast to be 9 years and 3 years in I have got rid of over half of the debt balance. Technically that would mean I should now be clear in approx 6 years total, but I aim to bring that down to 4 or 4.5 if I can.

Good luck

Carrot007

While I think self management is the best, are you focused enough.


If you think you can pay less monthly than with stepchange I doubt you have reached your lightbulb moment!


If you just want more flexibility to pay more to the (probably lower value) ones that wont freeze interest than you are probably ok. Though remember massive unfairness may be noticed and mena action from companies.


I was with stephchange. 6 months on my own as OH had not reached teh moment and then joint after, until OH was made redundant and paid thier part and then on my own again (was not enough to pay mine as well).


You can get flixibility with stephchange. If you suddenly have extra, while they recomend letting them distribute it you can yourself and just update the balances online and no one will even notice! I had to cancel the DD once because of things, but paid a couple of the lower debts of completely instead (as well as the other ones) when I got the money myself a bit late.


I would say though a dmp over 10 years might not even be accepted by stepchange. You should really look at other options unless you expect things to change drastically.

NowInspired

I was originally going to go with Step Change and do a joint DMP with my husband but having spoken to them I realised it wasn't right for us.

I am now setting up a jointly managed dmp and although initially I was nervous, I am now starting to feel more in control and it is quite liberating. I've spent many hours doing calculations and reading up on here and I think finally I know where I am going with it. I need to feel that control is within my grasp at all times and I don't want to have to explain myself to a company or ask for their approval, this is our dmp and we will run it how we want to, paying what we feel is right for us, without judgement from anyone else.

Be prepared for lots of hours reading on here to make sure you are doing things correctly and to gather as much as knowledge as you can. Also be prepared for lots of letter writing and waiting for replies. I have set up a folder for each creditor and am doing things the old way by printing a copy of every letter and putting it in the folder so that I have a file of correspondence for each creditor. I have only corresponded in writing, I have no desire to phone any of them and I intend to keep it that way. I also prefer to have evidence of what I am saying, which obviously can only be done with written correspondence.

This isn't obviously for everyone but for me it's definitely the right approach. I've felt out of control for long enough, with creditors piling on interest and leaving me in a state of sheer panic. Now I feel I am getting the control back and mentally that has helped me a lot and I am feeling more confident now and sleeping better too.

There's a long way to go yet I know, it's early days but at the moment it seems to be going well. Hope this helps.

sourcrates

NowInspired wrote: »

I was originally going to go with Step Change and do a joint DMP with my husband but having spoken to them I realised it wasn't right for us.

I am now setting up a jointly managed dmp and although initially I was nervous, I am now starting to feel more in control and it is quite liberating. I've spent many hours doing calculations and reading up on here and I think finally I know where I am going with it. I need to feel that control is within my grasp at all times and I don't want to have to explain myself to a company or ask for their approval, this is our dmp and we will run it how we want to, paying what we feel is right for us, without judgement from anyone else.

Be prepared for lots of hours reading on here to make sure you are doing things correctly and to gather as much as knowledge as you can. Also be prepared for lots of letter writing and waiting for replies. I have set up a folder for each creditor and am doing things the old way by printing a copy of every letter and putting it in the folder so that I have a file of correspondence for each creditor. I have only corresponded in writing, I have no desire to phone any of them and I intend to keep it that way. I also prefer to have evidence of what I am saying, which obviously can only be done with written correspondence.

This isn't obviously for everyone but for me it's definitely the right approach. I've felt out of control for long enough, with creditors piling on interest and leaving me in a state of sheer panic. Now I feel I am getting the control back and mentally that has helped me a lot and I am feeling more confident now and sleeping better too.

There's a long way to go yet I know, it's early days but at the moment it seems to be going well. Hope this helps.

That is exactly the right approach, and its quite pleasing to read a post from someone so switched on to the process involved.


Its all about taking back control, people tend to fold when confronted by these large conglomerates, companies want you to do as they say, but you firmly and politely say no, i am doing it my way, and you must all listen.


Everything in writing so you have a paper trail, is the correct way to go, i wish you the best of luck, please feel free to ask if you need further advice or help.

NowInspired

Thanks sourcrates. I have to say that it is this forum that has saved my sanity and given me the confidence to be able to deal with each stage, together with the fantastic help and advice that I have received from both yourself, January2015 and others too who have posted such useful information.

I would also say to anyone who is just realising they have a problem, please do not delay, I delayed for months and months because I was literally gripped with fear and I now wish I'd started sooner. I guess it's a process that we all have to go through, to get to grips with in our own time but it does get easier once you start doing something to sort it so the sooner you can start the better.