Advice please

enthusiasticsaver

Jude57 said:

enthusiasticsaver said:

The £144 is correct as for some reason the income figure is showing as £2400 when it should be £2200 leaving a disposable income of £634 and remaining £144 after the £490 debt repayments. 

If you really do have a £144 surplus then that would indicate you are managing ok but I guess you do not have money left at the end of the month so you need to find out where that missing money goes.  You also need to put the interest rates on that soa.  Why is your partner only earning £500 or is that their contribution to the household expenses and their  income is kept separate?  The groceries figure is huge for just 2 of you so that would be easy to reduce that. You definitely should not add it to your mortgage.  Did you have debt before your dad died or has this just happened since your reduced income? 

Whether or not you go down the DMP route depends on how disciplined you can be and the interest rates you are paying.  If the rates are very high and the debt is not coming down then asking them to freeze the interest will impact on your credit record which presumably is not great anyway.  That is the biggest disadvantage of a DMP in that you will need to default and your credit record will be disadvantaged for 6 years. I personally think you should reduce the groceries spend and throw as much at the debt as possible starting with the overdraft.  Stopping using this and the cards is essential though. 

I always feel like a lone voice when I point out that no reputable debt advice charity will offer a DMP to anyone who can, if only on paper, afford their contractual debt repayments. In a DMP, creditors are asked to accept a reduced monthly payment, suspend interest and suspend recovery action. If a creditor sees that a debtor can afford their contractual payments, they have no incentive to suspend interest or recovery. Why should they when an SOA, which they do see, shows reasonable living expenses, contractual payments and still a balanced budget or surplus? A firm offering a DMP or other managed debt solution in this case would only be interested in the fees they could charge.

I'd also point out that you don't HAVE to default to enter a DMP, although it's generally recommended by posters here. Some creditors will agree not to mark an account as in arrears or as AIP (arrangement in place) so long as payment is made via a DMP through a debt charity. Vanquis were, surprisingly, one of the best for this when I worked in the sector. Not all creditors will do this though, hence the advice to default and save an emergency fund before starting a DMP.

If OP answers the questions raised, more appropriate advice will be given but can we please move away from implying that DMP's are available to anyone who wants one?

I will reserve commenting on that until we have seen where the missing £144 is going, what interest rates are being paid and the situation with the £500 income from the partner and whether that is to cover bills or is available to cover debt repayments. 

I do agree though that a DMP organised through  a debt charity may not be agreed if contractual payments can be made and a reasonable soa included but people can and do self managed DMPs even if on paper they can afford repayments and the creditors reserve the right to refuse or accept depending on how likely they are to get any more money out of the borrower.