New to dmp

Hbellis83

Hi all - I have decided to do a dmp I have about 37k in debt over loans and credit. I originally consulted with freeze but now have done the step change thing. However, the monthly payments are super high on stepchange. Basically what I pay now! Should I go relook at my budget? I’m super scared but I’m having such financial anxiety I want to get my life sorted! I have a new separate bank account on monzo and have created all my pots! Any advice is welcomed! Going to created an emergency fund of at least £1.5k. However, I do ad hoc work over summer and will make some money. Should I start dmp after this! I also enrolled in breathing space which may have been a mistake. I will make about 2k in the next 3 months’ do I pay off the little debts or add to emergency? Thank you for your help

Grumpelstiltskin

You must budget very carefully and take into account now all possible increases in food, utilities, fuel etc. over the next 12 months.

Also build your emergency fund up as high as possible.

Do not rush into the DMP without being 200% sure you can afford the payments.

StepChange_Aidan

Hbellis83 said:

Hi all - I have decided to do a dmp I have about 37k in debt over loans and credit. I originally consulted with freeze but now have done the step change thing. However, the monthly payments are super high on stepchange. Basically what I pay now! Should I go relook at my budget? I’m super scared but I’m having such financial anxiety I want to get my life sorted! I have a new separate bank account on monzo and have created all my pots! Any advice is welcomed! Going to created an emergency fund of at least £1.5k. However, I do ad hoc work over summer and will make some money. Should I start dmp after this! I also enrolled in breathing space which may have been a mistake. I will make about 2k in the next 3 months’ do I pay off the little debts or add to emergency? Thank you for your help

Hi,

The monthly payment in a DMP is based on your budget. The amount left over after you’ve covered your priority bills and living costs would be what we recommend offering to the creditors. Please bear in mind that you'd only be expected to pay what you can realistically afford towards your debts.

If those payments look too high, I’d definitely suggest going back to look at the budget, making sure that you haven’t missed or underestimated any of the expenses. You should be able to return to debt advice and review your budget online, or if you’d like some more help with budgeting, you could call in to speak with an advisor.

We tend to recommend offering each creditor a fair share of any available money but when you have a lump sum available, StepChange may be able to help in making settlement offers to your creditors.

Kind regards,

Aidan

sourcrates

Do it yourself if you want too, its not difficult to self manage.

The debt charities do a good job, but their criteria for administering your DMP may not suite everyone.

If you self manage, your in the captains chair, you decide who gets what and when, in essence, you have much more freedom.

Creditors won`t be interested in lump sum offers at this stage, they work best after your debt has been sold a few times and is long since defaulted.

Hbellis83

So best to either self manage to go through step change! Reworked budget a bit and have got it to a manageable amount for me! I think some people have a full and final account I could put extra money I get in, it’s looking like my dmp would be 4 years, initially it was saying 1k a month and about 2 and a big big I genuinely think. I would struggle that high! 

Rob5342

You need a budget that is realistic and sustainable. You'll need to cut down in certain areas, but you should ensure you have enough to cover everything. Once you have done that then your creditors get what's left over. Don't forget annual or irregular expenses you'll need to cover, getting your car serviced or boiler repaired etc.

This site is very good for doing a self managed dmp. I started with Stepchange initially who were very good and got everything set up and dealt with my creditors. After a while i grew more confident about the process and wanted more control over stopping payments to debts that were unenforceable so I went self managed.

https://nedcab.cabmoney.org.uk/dmp.asp