In debt and home owner?

Norfolk_Jim

Hi, I've visited these boards many times over the years and had a lot of helpful advice (some of which I have followed). I've been feeling very depressed (yes I've sought help for that - it's a long standing issue for me) since I contacted Stepchange and found out that with their budget advice it would take me 33 years to repay my debts on a DMP. As I'm nearly 55 that does not look like it could work. They also suggested I consider bankruptcy.
But I do have quite a lot of capital in my house, though it is a house at the cheaper end of the scale (Downsizing would be to a tent). My wife is increasingly disabled as is daughter who is 22 but lives with us.
I have thought of going on the DMP Stepchange suggest and in a couple of years I would be able to access my pension and maybe use it to make F&F offers. I have a teachers pension that will help me in old age, the one I'd like to cash is one I started in my youth but didn't keep - it's grown into a tidy sum - about half what I owe.
My concern is that creditors will see that it will take 33 years on a DMP and decide to go after repayment by taking my house somehow or bankrupting me
Only I do not see any posts on these boards that reflect that. I don't see posts saying they are bankrupting the contributor or taking their home from them.
I just wondered if the people posting here are homeowners and what is your experience of owning a home and paying creditors on DMP's.
I'm about to change jobs as I can't take the stress of being a teacher any more - it's killing me. It pays the same as now but it out in the countryside.
I'm very lonely in this battle with debt. Of late it's been like I'm feeling my life is over, I will just be working to pay debt for the rest of my life. I own nothing of any value - anything I have of value I've sold. I'm now selling anything I can find on ebay to get even a little money.
All the responsibility for the family and the debt is on my shoulders and I feel completely alone even though I have a family.
Can anyone suggest a support group or chat room? Somewhere I can just share some of the burden without being judged. I really do want to repay what I owe. Defaulting would be a cause of shame to me but with no light at the end of the tunnel. I just don't want to always feel like I'm on my own, it's just me against the world and if I fail, well, as I said, my wife is increasingly disabled. Does get PIP and without it we would not be able to make even the minimum payments. Is that what the debt free diary pages are for?
Wasn't sure if I'd post this - wasn't sure if I'd admit I wasn't sure, just feeling so "on my own"

Suseka97

Hello Norfolk_Jim :hello:

I've just jumped on the board for a quick look and didn't want to read and run. So forgive the brevity of this message - will pop back later.

You should head on over to the DMP Mutual Support Thread - there's a lot of us 'debt free wannabees' there and no-one judges. In my view a 33 year DMP isn't the solution for you and can see why SC would have suggested bankruptcy. Hopefully Sourcrates or another of the forum stalwarts will be along to help you work that solution through.

Bankruptcy doesn't mean you'll lose your house, but it does mean (I think) that at the end of it you'll need to release some of its equity. But I'm no expert here. I just wanted to reach out to you and extend the hand of forum friendship. You are definitely not alone in this.

Norfolk_Jim

I didn't know there even is a DMP Mutual Support Thread

sourcrates

Hi,


You certainly do not want to go bankrupt if you are a homeowner, especially with a lot of equity in the property.


It can be difficult in your situation, but creditors have never been so flexible with payments as they presently are, you could start off on a DMP let it run until your pension matures, then try and settle each debt for as little as possible.


Unsecured debts are just that, unsecured, although the process does exist to make you bankrupt, or to force the sale of your home, these powers are very seldom used in everyday life, think about it, why would a company make you bankrupt, then get virtually nothing out of it, its a waste of there time and money, just does not happen.


If court action was taken, theoretically a CO could be put on your house, but as long as the payments were up to date, nothing more can be done by the creditor.


I would say start on a DMP and see where it leads.

January2015

Hello and welcome

I am in a DMP. I started owing over £95k and have approx quarter of a million in equity in my home. I just wanted to reassure you that despite the level of my debt and my DMP forecast to take well in excess of 30 years, all of my creditors have been supportive and helpful. There has been absolutely no mention of any requirement to sell my home or put a charge on it. I love my DMP and it is seriously the best thing I have ever done financially.

My partner and I are a bit older than you.

My advice regarding access the pension would be to not do it if it is your main pension pot. The debts will plod along at zero interest and you can save towards settlement offers over the next few years. However your pension pot will only be there once - enjoy it in your retirement.

That said, we did access a couple of small pension pots from previous jobs when we could and released a lump sum which helped us put forward some full and final settlement offers. However, I would never touch our main pensions - we need that to ensure we are comfortable in our retirement.

This is the link to the current DMP Mutual Support Forum. It is absolutely the best place to talk to others in the same situation. You will find fantastic advice and support to get you through.

Suseka97

I said I'd pop back.

Good to see Sourcrates and Jan15 are on the case, especially with regards to the 'not going down the bankruptcy route' advice. You'll see that Jan15 is very adept at managing her DMP and I am definitely in agreement with not touching your pension pot for this.

My debts were quite high but we were fortunate that due to our incomes we were not facing such a lengthy DMP term. Mind you our repayments were set too high at the outset, something I encourage others to avoid.

I see you've introduced yourself on the DMP Mutual Support thread, so I'll head over to help answer some of your questions.

You'll get lots of support there.

Pixie5740

Is your current home going to remain suitable accommodation for your wife who is becoming increasingly disabled and your daughter who is also disabled? The reason I ask is because if it's not then the council might be able to help find you more suitable accommodation. Then you could be a social tenant with a secure tenancy is a home that better suits your family's needs. It would also open up bankruptcy as an option or release some equity to make full and final settlement offers.

enthusiasticsaver

Keeping a debt free diary or posting on the DMP mutual support thread would be a way of getting support.

Do not go bankrupt if you have significant equity in your house. Even if it would take a long time to repay, most lenders will stop charging interest and payments would be set at a level you could afford on a DMP so with an asset to protect (house equity) that would normally be the route to take. Rarely would lenders enforce bankruptcy if you keep them informed and make an arranged payment through stepchange.

NeverendingDMP

Hiya just wanted to say that I am a homeowner with equity and started with a DMP that would take 18.5 years. This has gone up and down each time I've altered my budget but no one has taken it further or mentioned the house. Four of the original eight debts got sold on to debt collection agencies but to be honest that's benefitted me as I've settled three via full and final settlement for about 60 % off figure owed. I think what I'm paying now means it will take 15 years but as long as I do regular reviews no one seems to mind
Pà

DCFC79

NeverendingDMP wrote: »

Hiya just wanted to say that I am a homeowner with equity and started with a DMP that would take 18.5 years. This has gone up and down each time I've altered my budget but no one has taken it further or mentioned the house. Four of the original eight debts got sold on to debt collection agencies but to be honest that's benefitted me as I've settled three via full and final settlement for about 60 % off figure owed. I think what I'm paying now means it will take 15 years but as long as I do regular reviews no one seems to mind
Pà

Congrats on the work you have done so far to reduce the debt.

mrsjolie

I have a DMP with Stepchange and own a house that is worth a considerable amount of money. Never ever has anyone apart from Stepchange suggested I go bankrupt. As a homeowner it is a riddiculous suggestion. Not one of the 12 companies I owe money to have ever suggested I go bankrupt. Neither have they put a charge on my house. Or suggested I sell it. They are happy to receive regular payments and since I just keep on paying they don't do anything. They have all defaulted me and the last one is about to drop of my credit file any day now.

I pay only a minimal amount as I gave up struggling trying to pay it off quickly years ago. There is no point - I just pay a token amount and seven years in I am not afraid or frightened for the future. These days I pay less than I can afford - gone are the days of juggling pennies to make ends meet and trying to throw everything at my plan to keep the likes of Barclaycard at bay.. In truth you are just a number and they really don't care how much you pay. As long as you pay something they won't take action. There are millions of people out there who owe them money and they all are just like you and me and all the other lovely helpful people on these boards. These people won't single you out and come after you - they really won't. They don't have the resources.

My advice is to keep paying but only pay the bare minimum. Don't let anyone (including Stepchange) convince you that you need to pay it all back asap. You really don't.

I have been in a DMP with them since 2011 and at the rate I am paying (less than £50 a month) it will never be paid off. In the beginning we owed £79k and now it's down to just under £40k.

Every year at review time Stepchange tell me to go bankrupt or sell my house. I refuse - tell that my circumstances may change and they say - ok and I carry on
paying my DMP for another year. I hardly notice the payment now - my life is back to normal and apart from the annual review I don't have anything to worry about.

I have just sent off CCA's as I may finally be able settle with a reduced figure - but that's another subject.

Keep strong OP - you need to stop stressing about this and enjoy family time. You have come to the right place for help and support. Life is too short for worrying.