DMP mutual support thread part 13 !!

Hstyhst

Hi Suseka and thank you for your advice.  I have completed the online debt advice tool on step change putting in £0 income for my partner to see how this will leave us and realistically we would have £400 per month to put towards paying our debts off each month.  Current debt payments per month are £1200 on £40,000 of debt.  Step Change's top suggestion is looking at re-mortgaging and then next a DMP so I need to look more into both options.  I don't want to jump the gun, I have no idea how long this process could take with my partner's employer and currently he is receiving occupational sick pay so the current budget I have put forward on there is not taking this into account, and I understand that his employer will be managing the situation carefully because of his mental health.  Dismissal due to ill-health will be our best 'out' to his employment as he will be entitled to notice and notice pay, which may leave us with some money to start offering full and final settlement on one or two of the debts.  I'm hesitating at this first step as ideally would like to get things in place before he loses his job but dont want to set up the dmp with his current sick pay income as we are taking this on a month by month basis not sure when his entitlement to SSP will end and occupational sick pay will change.  It all seems 'big' at the moment and want to chose the right time to jump I guess.

Suseka97

Hstyhst said:

Hi Suseka and thank you for your advice.  I have completed the online debt advice tool on step change putting in £0 income for my partner to see how this will leave us and realistically we would have £400 per month to put towards paying our debts off each month.  Current debt payments per month are £1200 on £40,000 of debt.  Step Change's top suggestion is looking at re-mortgaging and then next a DMP so I need to look more into both options.  I don't want to jump the gun, I have no idea how long this process could take with my partner's employer and currently he is receiving occupational sick pay so the current budget I have put forward on there is not taking this into account, and I understand that his employer will be managing the situation carefully because of his mental health.  Dismissal due to ill-health will be our best 'out' to his employment as he will be entitled to notice and notice pay, which may leave us with some money to start offering full and final settlement on one or two of the debts.  I'm hesitating at this first step as ideally would like to get things in place before he loses his job but dont want to set up the dmp with his current sick pay income as we are taking this on a month by month basis not sure when his entitlement to SSP will end and occupational sick pay will change.  It all seems 'big' at the moment and want to chose the right time to jump I guess.

Okay, good to know you've taken that advice - although I have to admit I'm a little surprised at the suggestion that you should consider re-mortgaging.  I personally would never turn unsecured into secured debt.  To put this into perspective - me and my partner had debts in excess of £85k back in 2013 and used a DMP to dig our way out of it.  I had equity in my home and never once considered a re-mortgage, nor do I recall SC suggesting as much - but perhaps times have changed!

I wouldn't jump straight into a DMP too quickly, not given the unknowns you are dealing with regarding your partner.  I would, however, start the ball rolling by contacting your creditors to let them know the situation and start putting money aside for the essential emergency fund.  Also, if you read back on this thread you'll see that we recommend making no payments for a minimum of 3 - 6 months so that you have more chance of obtaining the ever important defaults and put money aside in that EF.  Defaults mean that your creditors will stop charging interest on the outstanding balances and it puts you in a good place to start paying down those debts.  

Penguin_

When asking a creditor for a copy of the CCA, do I have to provide a stamped address envelope? Is there anything else I need to provide?e

sourcrates

Penguin_ said:

When asking a creditor for a copy of the CCA, do I have to provide a stamped address envelope? Is there anything else I need to provide ?

Lol, no, just fill in the template letter on the National Debtline website, and enclose the £1 statutory fee in the form of a postal order.

Hstyhst

Afternoon, so after my initial wobbly post and prompt advice from Suseka, I have been reading through this thread to get myself more up to speed and my head on a little straighter!!  We had a meeting with my partner's employer and now know that we can either mutually agree his resignation and get 12 weeks pay or wait for them to dismiss him due to ill-health and get the same pay.  I am awaiting some advice from our mortgage insurance to see if the mutual agreement would still allow us to receive the monthly pay out or not before deciding which option to take, however, this is imminent now (within 4-8 weeks).  So my plan is, any any advice or pointers in a different direction would be helpful:
1)  As advised by Suseka....write to all creditors with a holding letter explaining why
2) Set up new basic bank account to prepare for DMP and get my wages paid in and priority bills/debts transferred to this
3) Budget already completed using SC (I have been slightly generous to us meaning we have £250 to pay creditors), next step speak to SC and finalise budget and get the ball rolling although I am also considering self managed.
But I do have some questions:
1)  I am planning on making a zero or token payment to creditors for 3-4 months to build up an EF and fund for F&F payments  in the future, as well as force defaults (hopefully!)- my only worry here is will my house be at risk as we have a mortgage and equity?
2) I am planning to set up 2 x new basic bank accounts, one to get my wages paid into and priority bills and debts paid out of, the other one will be for the EF which will receive 1 or 2 more sick pay wages my partner will receive, plus his severance payment of 12 weeks pay, our mortgage insurance payment (do I have to declare this as income as it will only be up to a year we will receive this?), also any extra money I put in the budget (such as the excess I have put on groceries) will be paid into here.
3) Do step change/creditors ask for bank statements?  Can I keep this EF account separate or will I need to declare it?  Looking at my estimates by paying the last of partner's wages, severance payment and anything else extra that we have from budget we could have about £7000 saved in 3 months before starting the DMP, meaning down the line we would have some F&F money as well as an EF.

sourcrates

Hstyhst said:

Afternoon, so after my initial wobbly post and prompt advice from Suseka, I have been reading through this thread to get myself more up to speed and my head on a little straighter!!  We had a meeting with my partner's employer and now know that we can either mutually agree his resignation and get 12 weeks pay or wait for them to dismiss him due to ill-health and get the same pay.  I am awaiting some advice from our mortgage insurance to see if the mutual agreement would still allow us to receive the monthly pay out or not before deciding which option to take, however, this is imminent now (within 4-8 weeks).  So my plan is, any any advice or pointers in a different direction would be helpful:
1)  As advised by Suseka....write to all creditors with a holding letter explaining why
2) Set up new basic bank account to prepare for DMP and get my wages paid in and priority bills/debts transferred to this
3) Budget already completed using SC (I have been slightly generous to us meaning we have £250 to pay creditors), next step speak to SC and finalise budget and get the ball rolling although I am also considering self managed.
But I do have some questions:
1)  I am planning on making a zero or token payment to creditors for 3-4 months to build up an EF and fund for F&F payments  in the future, as well as force defaults (hopefully!)- my only worry here is will my house be at risk as we have a mortgage and equity?
2) I am planning to set up 2 x new basic bank accounts, one to get my wages paid into and priority bills and debts paid out of, the other one will be for the EF which will receive 1 or 2 more sick pay wages my partner will receive, plus his severance payment of 12 weeks pay, our mortgage insurance payment (do I have to declare this as income as it will only be up to a year we will receive this?), also any extra money I put in the budget (such as the excess I have put on groceries) will be paid into here.
3) Do step change/creditors ask for bank statements?  Can I keep this EF account separate or will I need to declare it?  Looking at my estimates by paying the last of partner's wages, severance payment and anything else extra that we have from budget we could have about £7000 saved in 3 months before starting the DMP, meaning down the line we would have some F&F money as well as an EF.

A DMP is an informal arrangement, you can do as you wish, keep secret bank accounts a secret, i should not have to tell you that !!.

The debt collection process can be quite a long drawn out affair, six months down the line the creditors you had may not be your creditors anymore, they will most likely have sold the debts on, or at the very least passed them to a collection company.

Your house is not at risk from this process, many homeowners are in debt management, because they have an asset, they can`t go bankrupt, so debt management is the only informal arrangement there is.

Suseka97

Hstyhst said:

...............
1)  I am planning on making a zero or token payment to creditors for 3-4 months to build up an EF and fund for F&F payments  in the future, as well as force defaults (hopefully!)- my only worry here is will my house be at risk as we have a mortgage and equity?
2) I am planning to set up 2 x new basic bank accounts, one to get my wages paid into and priority bills and debts paid out of, the other one will be for the EF which will receive 1 or 2 more sick pay wages my partner will receive, plus his severance payment of 12 weeks pay, our mortgage insurance payment (do I have to declare this as income as it will only be up to a year we will receive this?), also any extra money I put in the budget (such as the excess I have put on groceries) will be paid into here.
3) Do step change/creditors ask for bank statements?  Can I keep this EF account separate or will I need to declare it?  Looking at my estimates by paying the last of partner's wages, severance payment and anything else extra that we have from budget we could have about £7000 saved in 3 months before starting the DMP, meaning down the line we would have some F&F money as well as an EF.

Great, sounds like you have things in order and you are now on the road to debt freedom

So, just a few observations - firstly it's not necessary to make tokens payments.  Just write to them, as you have said, and let them know the situation.  You can say that you will be back in touch in 3 mths with an update on your situation.  They'll no doubt respond with the usual blurb about putting your account/s on hold for 30 days, after which they will likely contact you again for an update and to encourage you to set up some sort of payment plan. When they do you just write back thanking them for their interest and say that you are still in the process of sorting out your financial affairs blah....blah...blah.  You can pretty much do that for several months and eventually they'll default and/or sell the debt on.

Personally I wouldn't bother setting up two accounts, especially if you plan to self-manage because you do not need to share your bank statements with anyone.  I think SC may ask to see them initially, perhaps to get a sense of what your outgoings are and to ensure you are covering all your essential costs - but, as has been said by sourcrates, a DMP is an informal arrangement and so its totally up to you how much you disclose (and to whom).

When we started out I had no idea how DMPs worked and I worried about 'hiding' extra money and we gave ourselves very little wriggle room in our expenses - so much so the first few years were very tough, tougher than perhaps they should have been.  By then I had started doing my research and learned a lot from this forum and the DMP thread - which gave me confidence and a better sense of how I wanted to manage things going forward.  By year 3 (and it should have been sooner) we decided to go self-managed and I never looked back.  I've since cleared several accounts through F&Fs and set aside 3 that are unenforceable.

What I'm trying to impart here is that this is a journey and its yours to control  

Hstyhst

Thank you both. This thread has been a great help in getting to an informed  starting point, particularly the advice from both of you throughout the many pages. Thank you again for taking the time to respond. I feel very much in control for the first time in years...my partner losing his job has been the best thing to happen to us because it was the kick up the bum we needed

19ryanh93

Hi all
So I’m about 12 months into my self managed DMP. However I have been getting overpaid by work. Which my own stupidity I didn’t realise. I now have to pay it back £200 a month for 9 months. Would it reflect badly if I asked creditors to accept a token gesture of a reduced amount for that period of time?

thanks in advanced. 

sourcrates

19ryanh93 said:

Hi all
So I’m about 12 months into my self managed DMP. However I have been getting overpaid by work. Which my own stupidity I didn’t realise. I now have to pay it back £200 a month for 9 months. Would it reflect badly if I asked creditors to accept a token gesture of a reduced amount for that period of time?

thanks in advanced. 

Who cares ?

Needs must, don’t they, they are non priority debt remember.