What are the reasons to NOT go on a DMP

jbkmum

I'm considering doing a DMP just because we're on the very edge of not being able to afford our debts, we manage but it's moving slowly with absolutely no breathing room.


But I just don't want to do it. My head is telling me that this will mean I can never own a house or whatever. Even though I know, in reality I could because once the 6 years are up I can then look to do so and its not the end of the world.



Are there any genuine reasons to not go on a DMP? I can't really risk CCJs is my only legitimate thought.

[Deleted User]

Have you looked to see if you might qualify for a DRO? (debt relief order)

jbkmum

My debt levels too high - I have 52k debt and my household earnings are about 50k

sourcrates

Hi,

Reasons to not go on a DMP.

Can you answer Yes to the following questions:

(1) I pay all my financial commitments every month, and leave myself with sufficient disposable income to live within my means.

(2) I pay more than the minimum payment each month to pay down the debt quicker.

(3) I have plenty of available credit, but never use it.


Answer yes to all 3, you don’t need a DMP, answer no, you do.

Debt solutions are provided for a very good reason.

jbkmum

sourcrates wrote: »

Hi,

Reasons to not go on a DMP.

Can you answer Yes to the following questions:

(1) I pay all my financial commitments every month, and leave myself with sufficient disposable income to live within my means.

(2) I pay more than the minimum payment each month to pay down the debt quicker.

(3) I have plenty of available credit, but never use it.


Answer yes to all 3, you don’t need a DMP, answer no, you do.

Debt solutions are provided for a very good reason.

Thank you Sourcrates, that really helps - dialing Stepchange now!

karencks

Great advice from sourcrates.

I had this conversation with national debtline a couple of weeks ago when I was feeling stressed about a potential hike in monthly interest when our next promotional rates expire.

Their advice was that if we could afford our minimums and ESSENTIAL living costs then a DMP wouldn’t be appropriate as there would be no incentive for creditors to reduce payments and freeze interest/fees.

We have realised that the DMP route isn’t for us as we can cut back on non essential spending quite significantly

I totally agree that you should go for a DMP if it’s right for you. ��

jbkmum

A lot or most of my debt is 0% but the ones that have expired are kicking us in the butt, and after doing a Debt Free Diary over the past couple of months I've been able to spot a few trends, basically robbing Peter to pay Paul. It's remarkable how stress free I felt after the call this morning. I phoned Stepchange at 9am and came off the call feeling pretty darn light. Ironically two of our creditors will get paid more than the minimum payment under the DMP.



Our DFD is in 7 years and 4 months time, but that doesn't account for DH's overtime that he will start getting in November, or my quarterly bonuses or the fact that I expect my income to increase by £300 a month in two years time (qualifaction dependant). Now defaulting means I can't get credit so this hopefully should be the start of something good.

sourcrates

Pop that credit bubble and take back your life.

Good luck with it all, any questions you just have to ask.

Kitten868

Wow jbkmum! Im really impressed by your initiative. Let the deep breath out. You've done it! 7 years 4 months! You now have a realistic timeline and budget. Not oh no £52k massive impossible mountain. Do all the reading up about DMPs on this forum about getting your emergency fund going before you start. Keep up the amazing work xxx

sharpeye

I agonised over starting a DMP, in a very similar situation to yourself. Once i set it up I felt much better. Stress reduced, able to organise and actually start paying debt off instead of just moving money around, and i've cleared a decent amount in the last two years.

I ended up with a number of defaults, and we are currently trying to arrange a mortgage with Precise. Although getting a mortgage to move house has been difficult, its not an impossibility, and if it goes through we will be debt free apart from the mortgage.

I feel gutted we are locked out of 'normal' mortgage deals, but none the less overall I think I did the right thing, and have felt much better about things since starting it.

Good Luck!