Become debt free advice?

Bee125

This is my first post - hi!
I have an issue with debt and spending, I currently owe £13,358 in unsecured loans and credit cards, I have spoken to StepChange and they have recommended a DMP (£591 a month) but I’m really anxious about it, I’m terrified that my creditors will continue to chase me and slap me with a CCJ. Some of my debt is quite new (from the last couple of months), I’m unable to pay in full anymore as my living circumstances have changed. I have no assets at all and don’t own a home or car. A friend has recommended an IVA as it’s more protected than an DMP?

This is really rambling-y and I’m not sure what my question is, I’m just scared and I can’t stop googling CCJS and bailiffs! I’ve got myself in such a mess and have no idea what to do.

Karonher

Hi - First of all, CCJs and bailiffs are a long way in the future if ever. I cant say what is best, but I think a DMP is more flexible. If circumstances change again then you can alter your payments. If one of the charities run your DMP they should be able to reassure you. This is from the Stepchange website

However, while it's possible you could get a CCJ during your DMP, it's rare so long as you stick to the payments you've agreed. In the vast majority of cases your creditors won't take this type of action.

sourcrates

Hi,

Ok, forget CCJ’s, bailiffs, courts and IVA’s (you don’t have enough debt for an IVA) non of that is going to happen, arranging a debt management plan is simple, once your in it, most run like clockwork, forget the horror stories, creditors have to treat you fairly, a DMP is an accepted way to deal with your debt.

They can be set up really quickly, but it’s best to save an emergency fund first, as you won’t have access to credit any longer.

It’s a simple, straightforward solution all creditors are familiar with, no need to be scared of anything.

SuperFrank88

Hi Bee125,

I am in EXACTLY the same situation as you are and I felt exactly how you do. Then I came on this site and found these fantastic people who really do help & support us ALL. I have also taken the advice from Sourcrates and will start to build up an emergency fund before I enter into a DMP. Don’t panic and stop reading the scary stuff online! Good luck with it all and remember you are NOT on your own!

Bee125

Thank you all so much!!!

Bee125

Hi Sourcrates,

Thank you, what is the best way to set up an emergency fund? Surely if i leave my DMP while save that’ll look worse for my creditors?

bohater

Look for it on Reddit @ Personal Finance UK. There is a clear step by step guide to creating an emergency fund.

SusieT

The way most people save for an emergency fund is to stop paying the cards and put that money away for a few months, and then start the DMP. That way the accounts will hopefully default before you start the DMP and will all drop off your credit report 6 years after default date. If they do not default early the report will show arrangement to pay and at the accounts will disappear 6 years from the end of the DMP.
Make sure you put the money away though so that you are not tempted to touch it for everyday things, and use the time to train yourself to live within the budget and not use cards or loans. You will get computer generated letters demanding payment but those can be ignored at the start as its very rare that any action will be taken until further down the line.

zippygeorgeandben

Also, ask yourself the question 'Could I have done anything differently?' and try and learn from life's experiences. Good luck.