where to begin

hagler

thanks grumple, the card has a small limit of a few hundred, its not to take on debt just to help me budget

i know it may seem like i drowned myself in debt in the first place, but i was fine i could handle my payments and was able to switch balances around with offers on

unfortunately unforseen and sudden ill health and losing my job has just knocked me off, in over 2 decades my payments were on time but as they say the tide can turn any time

if anyone could help me to understand whether i should first explain what is happening and get breathing space as sourcrates suggested above, which is what i feel is the the right and moral way to go or just stop paying and wait until they contact me as susiet said

cant thank you all enough for the help already given

Grumpelstiltskin

Hagler If you spend on a credit card and don't pay it off fully before the end of the account period you are accruing debt.

It doesn't matter how you think of it it is debt and on a DMP you can't do that.

I am afraid morals don't come into it.

hagler

thanks grumple, that's exactly what I want to do just use it for budgeting, pay it off on the payment date, is this possible or will all the cards get cancelled once I'm on a dmp

sourcrates

hagler said:

thanks grumple, that's exactly what I want to do just use it for budgeting, pay it off on the payment date, is this possible or will all the cards get cancelled once I'm on a dmp

You don`t want to be relying on credit, or the goodwill of one provider, because it can be withdrawn at any time, if for any reason they do a search on you, and see other defaulted accounts, that line of credit can be stopped, and it`s not good practice to continue one line of credit whilst in debt management anyway.

You work out a budget that is financed from your income, and/or benefits, and use that, that promotes good financial behaviour, and allows you to retain control, not your credit card provider.

You must learn to do without credit, in all its forms, for the duration of your DMP.

Rob5342

I have been on a dmp for the last 18 months. When you have been using credit cards for years it can feel very unnerving to think of living without them.Its what you need to do though, and start living within a budget, planning your money and maintaining an emergency fund for any surprises. You soon get used to it,

hagler

thanks rob and sourcrates, what you are both saying makes sense and i think will be best to avoid all cards and credit lines

im just confused on one thing now which is should i notify the companies of my situation as sourcrates previously advised or not do anything as susiet said, which way should i go, i feel contacting them and telling them is the right thing to do but will it make things worse for me

any advice would be greatly appreciated

steve

RAS

hagler,

There's no absolutely right way to do this; although there are wrong ways.

Either send them all a letter, and risk getting AP markers which may take longer to turn to default, or just stop paying and respond to their first letter. Both are fine.

Make sure you explain that you have been ill, unexpectedly no longer work and are on benefits. If you get anything labelled letter before action, come back here with the redacted letter.

The important thing is that you put your energy into learning as a family how to live on a more limited budget and build up an emergency fund to cover things like car maintenance. And learn the life hacks that help you stick to budget.

Start with a new safe basic bank account and a long talk with OH.

Do an SOA and post here if you wish; people can suggest ways of managing the money better.

SOA CALCULATOR (for DFW newbies): SOA Calculator

 And going forward consider a debt diary to share and refine your skills. Like everything it takes time to learn new ways and get confident in your new situation, and that on-line support can be valuable.

PurpleMouse5

I contacted all my creditors in writing to tell them I was talking to Stepchange to set up a DMP. I also used the breathing space scheme https://www.stepchange.org/how-we-help/breathing-space-scheme.aspx  to stop the creditors contacting me for 60 days which took some of the stress off. I feel like communicating regularly has made them more sympathetic and saved me the hassle of threats. It made the situation a bit more predictable.

But it might mean it takes longer to default. So far my largest creditor has just defaulted 5 months in and will backdate the default to when I first stopped making minimum payments.

So yeah either are fine I think it's a question of what's more important for you - faster defaults or less creditor hassle/more predictability.

EssexHebridean

You ask where to begin - I seem to recall some words from a book from my childhood advised “begin at the beginning, and keep going until you reach the end…!” - and to be honest that about sums it up. You’ve taken the hardest step now just asking for the help - so the next thing now it to do the keep going bit - that being cancelling the DD payments for the debts, working out your ongoing budget, saving your emergency fund and then getting a DMP in place.

I’d honestly say you have little to lose by just stopping payments - the key thing is going to be to get the debts to default and the easiest way of making that happen is to stop paying. Use the time while you wait for the defaults constructively to get everything organised so you know exactly where you stand - so your SOA which in turn gives you your monthly budget - it also tells you how much you should be able to accumulate into that emergency fund. Assume you have 3 - 4 months for that but in the first instance - although it’s to be hoped you can continue to add to it once your DMP starts too, just in a smaller way.

As Susie says, you’re likely to get some contact from creditors - letters trying to frighten you with the things that “could” happen (spoiler alert - the ones that matter won’t happen, the ones that matter - impact to your “credit score 🙄” etc - will, but as they don’t matter, that’s fine! 😆) You may also get some phone calls - if that happens just politely tell them that you are not willing to discuss anything over the telephone, and anything they have to say to you must be sent by hard copy in the post, tell them also that any further telephone contact will be treated as harassment and reported accordingly. Then put the phone down and block the number. (Or mark it clearly in your contacts for future reference so you can just let it ring out.) 

Get the SOA sorted as suggested - it will be a really useful exercise and will leave you feeling that you know where you stand. 

fatbelly

This thread illustrates why debt advice is part art, part science.

There's no absolute one way to do things though there are definite mistakes to avoid.