Nervous, unsure, nauseous ....

TheDebtFretter

Hi all.....complete newbie here!
After realising slowly over the last few weeks that I probably have around 4 months max before I reach the stage where I will have no available credit, and will be unable to live after making all my debt repayments, I have deciding biting the bullet is the way to go....

I think I have almost decided that DMP is the way to go for me. I have a mortgage, on a fixed rate, but have £44K debt (mine, partner is blissfully unaware and I would like it to stay that way...although I realise this is unrealistic once the letters start to pour in!)
I have never missed a payment so no defaults, CCJs nothing. Credit score is only "Fair" due to the amount of debt, not missing payments. My credit score is reducing ever so slightly every month, so I am prepared for the hit it will take once I set things in motion.
What worries me is actually doing it. I have opened a safe account today. My hubbys salary (the part he gives me) will hit my account on 21st, so I need to switch next week. I just need to know the order to do things and the timings.
If I switch next week, when do I send my holding letters out (3 of my debts are with my present current account)
I am so scared of getting loads of phone calls, as I don't deal with confrontation well. I am committed to paying back every penny, even though I know it will take years, but worried about the scare tactics of DCA's and the like.
I am just a big 54 year old scaredy cat really, are there any soft and fluffy DCA's out there?? I am guessing not! the thought of them terrifies me.
Are my creditors likely to accept my payments, even though the DMP is written up by myself?
Thank you in advance......I am sure there will be more questions over the coming weeks.

Willing2Learn

Hi and welcome to the forum

If you are scared about potential phone calls then I suggest you add a couple of sentences to you holding letters. Something along the lines "I only authorise and consent to written correspondence by Royal Mail. I do not consent to correspondence by phone, email or SMS."

Yes, your creditors will have no choice to accept your arranged DMP payments. If they write to you with a rejection, then you would just continue to make your regular payments regardless. Don't be scared about DCAs. They are really easy to deal with on the most part, as they are regulated and know what they can and cannot do.

Incidentally, we recommend that everyone delays the start date of their DMP by 3-6 months. So for example, your holding letters could say that your DMP payments will begin xx November. You can then withhold payments during the intervening months, allowing you to put in place a sizeable Emergency Fund (EF). This increases the chance of your creditors defaulting you nice and early in the process, which means your credit file will be clean sooner. Also, when they default you, interest and charges are frozen.

By the way, are you planning to self-manage your DMP or you going through StepChange, Payplan or the CAB?

Edit: Regarding your switch of current accounts. Using the CASS switching system can cause problems if you are switching from an account with an overdraft, as the overdraft may be switched too. You don't want this to happen. It is generally a safer option to switch manually, the old-fashioned way. Also, make sure your new account is not part of the same Banking Group to whom you owe any money. (ie If you make sure the new bank is fully independent, then this will definitely not be a problem)

TheDebtFretter

Thank you for this.
I have opened an account with a bank not associated with any of my creditors. It does not have an overdraft facility, so could the overdraft from my existing bank still be transferred over?
I was planning to do this myself......would you recommend using one of the charity’s?

Willing2Learn

I and others have successfully self-managed our DMPs. It is relatively straight-forward as long as you do the necessary research to ensure that everything runs smoothly. You should choose whichever option makes you feel comfortable (charity or SM). There is an excellent resource available to wannabe DMPers from NEDCAB. The link is below:
https://nedcab.cabmoney.org.uk/dmp.asp

If you end up choosing to SM your DMP, then I believe that the NEDCAB model will auto-generate letters for you, which is kind of cool.

Have you completed an SOA (Statement of Affairs) yet?
http://www.stoozing.com/calculator/soa.php

TheDebtFretter

Thank you for the advice and links.
Sorry to be a pain, but if I use CASS to switch, will the overdraft from my existing bank transfer to the new account? The new bank account has no overdraft facility.......

Willing2Learn

That I do not know for certain. If the new account does not have an overdraft facility, then I've got a feeling that the CASS switch might fail, as they will not be able to close your old account due to there being an outstanding balance.

I suggest you ask this question on the MSE Budgeting & Bank Accounts Board. They are very knowledgeable about this stuff over there.

Suseka97

I agree with everything said thus far - but also suggest you just handle the switching manually. There's no need to use the CASS method. All you need to do is cancel all your DDs to those non-priority debts now and send off the holding letters, but don't cancel the ones associated with your bank. When you're sure your income is being paid into the new 'clean' bank account you can then send letters to your bank and those creditors associated with it (assuming its a loan and/or CCs) to let them know what's happening and close the account at the same time. Although I imagine they'll do that for you anyway once they know you're in financial difficulty and can no longer service your debts.

We had loads of debts associated with our 'then' bank (Barclays) and I just switched all the utilities, mortgage, insurances etc. over one by one. It's pretty straightforward and you can probably update your bank details with many suppliers/providers online these days. It'll take a few months and in the meantime you just carrying on paying your bank what they are owed until you're ready to flick that switch.

TheDebtFretter

Thank you both for your advice. It's just very nerve wracking all of this and I have had enough sleepless nights over it now! My poor (unaware) hubby was sat watching "Can't Pay, we'll take it away" last night and I had to leave the room as I broke out into a cold sweat! These programmes terrify me!!

Suseka97

You need to put your mind at rest on that front. Those are high court enforcement officers and not something you'll need to worry about. Just get the DMP up and running and all will be fine.

Willing2Learn

Hi again,

Just wanted to say that you have been brave in taking these initial steps forward on your debt-busting journey. I think you should be brave again and share the burden with your husband. It's not good to keep everything inside...

enthusiasticsaver

If you have opened an account with a new provider you do not want to move any overdraft over. That should be treated as a debt within the DMP. It is against the rules to take out new borrowing once on a DMP so you need an emergency fund so ask for 3 months breathing space and save one up. You should not take out any overdraft facility. The earlier your creditors default you the better.


Are you financially linked with your husband? If you are you must tell him what is going on as your debts will affect his ability to borrow at good rates too. Surely it is better you tell him than he finds out by looking at a credit report?