Token Payments with StepChange has now come to an end

londonsmiles

Hi All, 

Happy New Year to you! Looking for some advice, I have been with Step Change for the last few years but last year I was on maternity, so they changed my DMP to token payments due to mat pay. Now it has been a year they have advised that I either contact my creditors to ask if they would accept token payments or go for DRO. I have tried to read as much as I could regarding DRO but getting conflicting messages say I shouldn't. I have 2 children (5 and 1) and work part time. I won't be able to make big payments towards my 13 creditors but with my job there are opportunities for bonuses...would that effect an DRO? Just need some help on what to do next. How do I check if any of my payments have defaulted etc?

TIA

MalMonroe

Hi, and a very happy New Year to you too.

You could look at your credit reports to see if any of your payments have defaulted. Free reports at Clearscore (by Equifax), Karma (by TransUniuon) or Experian via this very site, link here - https://www.moneysavingexpert.com/creditclub/

You could do worse than contact Stepchange again for information about a DRO. I realise you started out with Stepchange but their advice, I found, was excellent.

With their help I took out a DRO in 2013 and I always say it saved my life as I was at the end of my tether with debts I had absolutely no hope of repaying.

In this link is a list of info threads  - https://www.stepchange.org/search-results.aspx?search=debt relief order

You say Stepchange also advised a DRO. Many of us on this site have had a DRO and come out the other end. It's nothing to be scared of.

I wouldn't worry about your job opportunities for bonuses just now because they may or may not transpire.

Why not have a chat with an advisor at SC? Get all the facts and info and then make your decision. For me, a DRO was the very best thing I've ever done. But you have to come to your own decision, obviously. 

You could contact Citizens Advice or National Debtline if you don't want to continue with StepChange but I always recommend SC as they're the ones who got me out of a very big jam. 

Good luck!   

sourcrates

Your credit accounts will show on your credit files, they will also show their status.

The main requirement of a DRO is that your monthly disposable income must not be more than £75.

So any regular bonus that takes you over and beyond this amount, well, your arrangement would likely fail, yes.

For a DRO to be successful, you need a stable income that does not fluctuate that much, as you have to meet this criteria for a full year, if you can just work normally without much fluctuation in income, then you would be fine.

A statement of affairs is a good starting place, then we can better advise you.

sammyjammy

MalMonroe said:

I wouldn't worry about your job opportunities for bonuses just now because they may or may not transpire.

Easy to say but this would cause OPs DRO to fail which would not only put them back to square one would probably be detrimental to their mental health.

fatbelly

As an intermediary I would be concerned about the bonuses and we'd have to have a conversation about when they came over the past 12 months and whether that pattern would be likely to continue over the next. 

I'd then try to factor them into your income in order to check whether on average your surplus income was less that £75.

Stepchange is correct that token offers are not a long-term strategy. Advice above is good - post a soa on the dfw board and let us have a look at it.

Edit: for a job where irregular bonuses form a large part of the income, it's often best to have a dmp based on basic salary, save the bonus payments into a 'fighting fund' and use that for full & final settlements