where to begin

haglerhagler Forumite
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hello everyone

where to begin, have been going through the forum and found posts really helpful, especially during this stressful time in my life

in total have about 18k of debt mostly spread across loans and credit cards, have always paid my minimum payments and monthlys on time

recently due to poor health and unforseen circumstances i have lost my job and once i go through my small emergency savings pot will not be in a position to pay my debts

have never been in this position before and coming to terms with the reality of what is happening is causing me alot of stress and sleepless nights

after reading through alot of the posts it looks like a dmp would be the best route to go for, i dont have any personal assets apart from a 9 year old car which is worth about 6k

im worried that going down the dmp path will send bailiffs to my door to take the car could anyone share some experiences if this would happen

also i have 2 credit cards with small credit limits which are currently not being used and have a zero balance if i go down the default/dmp path will those two cards still be available to use or will all my credit cards and loans be blocked straight away and barred

really worried right now, have been for the last 6 months hopefully will get everything together and start climbing this mountain, seems a long way off at the moment hopefully someone can help and point me in the right direction, any help would be really appreciated

steve

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Replies

  • fatbellyfatbelly Forumite
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    Bailiffs can only be appointed after a defaulted court judgement.

    Most debts don't ever see court action.

    Even if bailiffs were appointed, on consumer credit debts like cards, loans, catalogues - they would have to use the court bailiff and they're not a problem.

    Most bailiff problems are associated with the ones that act on council tax debt. Magistrate court fines (incl tv licence) would probably be in second place.
  • enthusiasticsaverenthusiasticsaver Forumite, Ambassador
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    hagler said:
    hello everyone

    where to begin, have been going through the forum and found posts really helpful, especially during this stressful time in my life

    in total have about 18k of debt mostly spread across loans and credit cards, have always paid my minimum payments and monthlys on time

    recently due to poor health and unforseen circumstances i have lost my job and once i go through my small emergency savings pot will not be in a position to pay my debts

    have never been in this position before and coming to terms with the reality of what is happening is causing me alot of stress and sleepless nights

    after reading through alot of the posts it looks like a dmp would be the best route to go for, i dont have any personal assets apart from a 9 year old car which is worth about 6k

    im worried that going down the dmp path will send bailiffs to my door to take the car could anyone share some experiences if this would happen

    also i have 2 credit cards with small credit limits which are currently not being used and have a zero balance if i go down the default/dmp path will those two cards still be available to use or will all my credit cards and loans be blocked straight away and barred

    really worried right now, have been for the last 6 months hopefully will get everything together and start climbing this mountain, seems a long way off at the moment hopefully someone can help and point me in the right direction, any help would be really appreciated

    steve

    I would first stop using emergency money to pay debts.  If you do not have sufficient income to meet minimums then putting your debts on hold by defaulting would be best.  Bailiffs are unlikely to be involved as this would mean court action first which your creditors are unlikely to action if you are unemployed, the debts are unsecured and there are no other assets.  An exception may be the car if there is HP outstanding on it and it is security for one of your loans. 

    Using your two empty credit cards is a bad idea.  If you go down the DMP route you cannot take on more debt anyway. Taking on more borrowing when you cannot service your existing debts will not sort things out.  The best thing to do is sort out what income you will receive in benefits.  Focus on keeping your emergency fund for actual emergencies not paying debt and let your creditors know you are unemployed and cannot meet debts and ask for a 6 month breathing space initially.  Then work out a budget and focus on finding work. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected] All views are my own and not the official line of MoneySavingExpert.
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  • sourcratessourcrates Forumite
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    Obviously, you are new to this situation, but it is clear from your post you have hearsay and Rumer running through your mind, Baillifs are a last resort, not a first response, fatbelly (above) lists when they can be employed, in reality, for consumer credit debts, it`s never going to happen.

    Debt management is a well-recognised way of repaying problem debt, as long as payments are stuck too, no further action will be taken, no need for stress or sleepless nights, your arrangement can be set up very easily and quickly, use a debt charity obviously, it`s free, creditors will accept what is happening, no great commotion or anything like that, just business as normal.

    Do not use your savings to pay debts, you will need that money.

    Best first step is to get breathing space, then set up the DMP when you are ready.
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  • edited 10 October 2022 at 12:53AM
    haglerhagler Forumite
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    edited 10 October 2022 at 12:53AM
    thanks for the replies which have helped me alot to understand where i seem to be in this mess

    its still not sinking in i have to go down this route as rarely ever missed a payment and just doesnt feel right even thinking about it

    if my understanding is right you are saying bailiff action is unlikely as its credit cards, im just unsure as the car is 8 years old and paid off and in my name, i really need it for the kids, that is my biggest worry they will take the car off me

    if i go down the dmp plan will my partner also have to get involved in the dmp plan, nothing is in her name its all in mine, im just worried if they take her details she'll get black listed and her cards will also be barred if this happens she wont forgive me for getting her mixed up in my mess

    my credit card with no balance has a limit of £500 i was looking to be able to use it just to give me a few extra weeks space they give to clear the balance, im just worried as soon as i miss a payment on one card and then default all the companies will find out straight away and just block and bar everything and i wont have access to see my statements or how much interest they are charging

    sorry if im repeating myself, just very worried for our future

    any help would be really appreciated

    steve
  • fatbellyfatbelly Forumite
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    Your partner will not be involved in the dmp and her credit file will only be affected if there is a joint financial product like a loan or mortgage.

    Addresses are not used to link people any more.

    Having one card that you use for purchases and pay in full each month is not a bad idea, particularly if that card gives you some bonus like Clubcard points or cashback. It obviously needs to be with a company you don't have other debts to. Similarly you need a bank account that is not with a bank group where you have debts. This is to protect your income from firms using the right of set-off.

    An 8-year old car that you own in full sounds ideal as it should have years of life left but not be depreciating much. Just make sure you budget to keep it legally taxed, insured and maintained.

  • edited 10 October 2022 at 6:37AM
    RASRAS Forumite
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    edited 10 October 2022 at 6:37AM
    Hi, you've had some good advice already.

    Just to re-iterate that it is good:

    That you have no shared debt with your partner.
    That you own a decent but old car.
    That you don't have any other assets.
    That you only have consumer debt.

    It's sad that you been using savings to pay consumer debt. STOP. Save whatever you have left for emergencies, not for "protecting your credit record."

    It is a shock when circumstances change and common to try and keep up with old ways hoping everything will come good. You and yours will be better protected long-term is you just stop paying everything. That way the creditors default you sooner and if you have any surplus (unlikely) on your budget you save that into your emergency fund until your creditors default you.

    Don't pay £1 per month, as you'll get arrangement to pay markers which do much more damage for much longer. Don't ring your creditors to discuss the situation, their telesales staff are trained to bully and cajole you into paying more than you can afford, mentioning all sorts of things that "might" happen. Some of which are technically possible way down the legal line and would result in you paying less and aren't worth their effort.

    Make sure you are claiming everything to which you are entitled and use the MSE budget planner to work out your budget, even if it is negative. 

    Finally, don't get sucked into an IVA by these "reduce your debt by 70/80/91 percent" merchants. It's totally unsuitable for someone in your financial circumstances and if your situation improves in the next year or two could cost you even more you owe. And skip those "checking for tax rebates" as well.

    Wishing you well for the future. And do come back for advice and support as you need it.
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  • SusieTSusieT Forumite
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    @hagler the majority of us here have been through  the panic, uncertainty, unbelief, worry, sleeplessness etc that you are going through, we have come out the other side of that and are able to tell you that there is a life after debt, and you can get through it. One thing most people do is to never again run up big amounts on credit cards/loans afterwards and learn to save for whatever we want to buy. 
    So, stop, close your eyes, take a few very deep breaths, stop paying (and I am very well aware that it goes against your instincts), ignorethe scary letters that will fly through your door with big black or red font at the top telling you all the dire things that MAY happen if you do not pay or contact them immediately. Then they will pass things along to the next desk/office and the same sort of thing will come from a debt collector which you also ignore just as if ther were a circular sales letter. If you want to file the letters for future reading thats fine, and you can have a celebratory ripping up and burning of them all when you are debt free :D
    When you eventually get the much awaited DEFAULT NOTICE letter keep it very safely, away from the normal debt chasing letters, and do a little dance as now your problems are a lot less, because this is when the interest stops and is the point where you can add this debt to the start paying on a DMP file.  
    Until then, save all the payments that you would have been sending to them to replenish your accounts that you have been using, these accounts will now be your emergency funds. 
    If you get any letters that scare you just put them (with personal details redacted) on a reply to this thread so that the history can be easily followed, and people can help you. Do not talk to anyone on the phone, as they are trained to extract money from you that you do not have, and which will delay the default date. Try not to worry too much, at the end of it you will see that it was not worth it. Although it may take a while you will be able to get these cleared and if you remember how you feel right now than you will hopefully never get in this position again.
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  • sourcratessourcrates Forumite
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    hagler said:


    my credit card with no balance has a limit of £500 i was looking to be able to use it just to give me a few extra weeks space they give to clear the balance, im just worried as soon as i miss a payment on one card and then default all the companies will find out straight away and just block and bar everything and i wont have access to see my statements or how much interest they are charging

    sorry if im repeating myself, just very worried for our future

    any help would be really appreciated

    steve
    Let me just add, debt collection is an extremely slow process, you could stop paying all your unsecured debts today, and aside from a few letters and phone calls, you could come back in a year, and still be in the same position.

    You are way overthinking this my man, you need to sit yourself down, and educate yourself on the actual debt collection process, and what a creditor can and cannot do, as you are coming out with all the worst case, social media induced, scenarios, that are just not ever going to apply to you.

    Your debt will only ever affect you, unless you share a financial product, then it would reflect on the other persons credit file, but not on their actual credit product itself.

    The very first thing you must do is write and inform all your creditors of your job loss, explain your current circumstances to them, do not mention how much you could pay them, as you are unemployed you will not be expected to pay anything.

    They will most likely put accounts on hold for 3 months (standard practice) after which time you will be contacted for an update, so you simply update them again as to your situation, it`s all a well-worn out process, you have no need to worry, just follow the advice.

    Good luck.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • haglerhagler Forumite
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    can not thank you all enough for the good advice, at this moment in my life its feeling like you are the 4th emergency service coming to help

    just one thing is making me uneasy, when i start this journey should i first send everyone a letter explaining what has happened and ask for the account to be put on hold for 3 months or should i just not do anything and let things unfold also if i have one credit card which has no balance and also have a bank account with that bank would i still be able to use the credit card when i go on a dmp or would it be blocked

    any help would be really appreciated 

    steve
  • GrumpelstiltskinGrumpelstiltskin Forumite
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    The point of a DMP is to reduce your debts not to have a credit card and add more to your debts.

    You probably think the credit card is for emergency use only, that is what an emergency fund is for.

    The general advice is stop paying your debts and use that money to save an emergency fund before you enter a DMP.

    You must get into the habit of saying no credit come what may, a totally different mindset.
    If you go down to the woods today you better not go alone.
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