Debt assistance

MovingForwards

Work through this site as it gives you loads of info and templates:

https://tools.nationaldebtline.org/yourbudget/

Technically you cannot keep your Amex as it's deemed to be preferential treatment to a creditor.

New bank account - depends, if you owe them any money as they have the right to offset any monies in your account towards your debts with them.

As you are looking to get a mortgage or loan next year you will probably struggle in a DMP.

Can you snowball your debts instead?

fatbelly

onthefencepost wrote: »

I agree, if they can offer some options for the next few years to keep things as they are i.e in my parents name so I can get my debt under control.

However if I go down the DMP route this will remain as a marker on my file for the next 6 years or so? But equally chopping my debt down will be impossible at my current income as most is interest on the credit cards i'm paying off. Also my monthly payments end up increase as im having to take out more cash advances to make ends meet.

I've slept on some of the comments and think that a DMP will be the best solution.
I can free up alot of cash and will allow me to save alot more money. Cash is king ultimately.

The DMP itself won't show as a mark on your file but the individual debts will do, as they default (3-6 months in).

onthefencepost wrote: »

Hi,

What are the next steps for me to set up a DMP?

Can I keep my Amex card during a dmp? It needs to be paid of monthly as it’s a charge card and can count towards some good credit reporting? I’ve recently renewed it and have around 52000 membership points

Do I need a new bank account? Also my Tesco credit card has the smallest credit limit of £1250 if I can pay this off over the coming months I’d like to keep this as a emergency card.
I’m just planning safety net - don’t want to be left venerable.

Thank you.

A dmp is an informal solution so you can do what you want. If you want to retain your amex card, use it for purchases and clear it each month, no-one can stop you - it's not bankruptcy. Likewise preferring one creditor over another is only an offence in insolvency.

But you can forget about having a good credit history if you go down that route.

You will need a bank account that is not with anyone you owe money to.

If you look at my earlier post #9 you will see that I did mention a dmp if your parents get a longer term deal on the mortgage.

If things don't work out, would the three of you be prepared to move into the rented sector?

onthefencepost

So paying off Tesco / Amex and only to retain them is a no no? Will having a DMP revoke my credit lines I’ve paid off?

I’m going to await for the options from the mortgage company they should arrive this week. Renting/ moving is out of the question.

enthusiasticsaver

If you want to get the interest frozen then a DMP may be your only solution. That will ruin your credit file for 6 years though.

Alternatively you cut all spending to minimum, cut up the cards and tackle the debts one at a time starting with the most expensive. I would stop using Amex. You are not financially solvent enough to use credit at the moment so getting to grips with budgeting is better done without cards especially if you are an ex gambler.

You will not get a mortgage with that debt and securing it on your parents house would be extremely unwise. Clear the debt then sort out the mortgage. I assume it is interest only? How old are your parents?

On those interest rates though I think a DMP is a good option.

onthefencepost

As some of my credit cards have got super high interest is it worth me contacting them directly to see if they can reduce the level off interest? Maybe something by writing?

onthefencepost

Hi,

Never rains just pours!

My employer has a new payroll company meaning that they haven’t fully processed my expenses and I’m around £200 short.

Furthermore I’ve had a few unforeseen expenses this month which I was looking to offset next month.

Need some advise as I simply don’t have enough money to pay all creditors even if I don’t eat out and spend money on entertainment etc.

I’ve wrote to three of credit card companies last week (high balance and interest ones) ago regarding a interest rate reduction, and haven’t had a response. Is it worth me calling them explaining my situation?

As you know I can’t have missed payment(s) on my file given the house mortgage situation.

Look forward to an advice / suggestions.

Thank you.

lopsyfa

May be better to call them but they may wan't to mark your credit file with some file form of marker if they agree to reduce/freeze the interest.

I would have thought it will be better to start your DMP now and start making a dent on the debt balance rather than delaying the almost inevitable. Your chance of mortgage is even likely better (or the same) on a DMP with some defaults but lower debt balance compared to high debts and no DMP with time.

Your parents may also be able to get a new fix mortgage without any credit application if staying with the same lender.

fatbelly

onthefencepost wrote: »

Hi,

Never rains just pours!

My employer has a new payroll company meaning that they haven’t fully processed my expenses and I’m around £200 short.

Furthermore I’ve had a few unforeseen expenses this month which I was looking to offset next month.

Need some advise as I simply don’t have enough money to pay all creditors even if I don’t eat out and spend money on entertainment etc.

I’ve wrote to three of credit card companies last week (high balance and interest ones) ago regarding a interest rate reduction, and haven’t had a response. Is it worth me calling them explaining my situation?

As you know I can’t have missed payment(s) on my file given the house mortgage situation.

Look forward to an advice / suggestions.

Thank you.

An interest rate reduction is not going to change the minimum payments, and it is those that you cannot afford.

You need to look at alternative plans other than the plan for you to buy your parents' house with a mortgage. What options did their lender give them for when their interest only mortgage finishes next year?

katsu

Can your parents help you financially by paying more of the house expenses for a few months so you can clear a debt or two? They may even need to help you clear a little bit of your debt because of the mortgage plan.

Can you temporarily take a second job delivering pizzas, mowing lawns in your neighbourhood even or something to earn some money towards clearing a debt or your other "unexpected" expenses?

On that note, I think you need to learn to budget as they were probably expenses you might need to anticipate? There are apps like You Need a Budget that some people here find really helpful in keeping track of spending but a notebook or spreadsheet can do it too.

I think you and your parents may need to discuss your joint financial situation and desire for you to take on the mortgage. Do your siblings expect to get money from the house when your parents die?

I would aim to see a broker soon to give you a goal to work towards.

onthefencepost

Hi all,

Some GOOD NEWS! Some LIGHT!

Little update on the mortgage situation.
The mortgage company are happy to extend my patents mortgage for 40 months - just under 4 years. My siblings are happy to assist with this and they briefly know my situation and its for the good our parents.

With this in mind I think a DMP would be a good option as the mortgage worry isn't there.
My argos card and my tesco are something I can clear off over the coming months with direct payments. Also my Amex is a recurring charge which I use which i will like to retain. Also this will allow me to have some positive reporting on my credit file - isnt worth much but it all helps.

However my other cards and loans need to go down the DMP route. Also if I can free up a few hundred pounds a month to pay the mortgage company this will be great. My siblings are happy to contribute.

Also i'm worried about nationwide demanding overdraft repayment. I have another bank account I can use which i will request my wages to go in. is this a good idea or am i being over paranoid?