Getting started getting sorted

LemonHead0102

Hi,

I wanted to pop on here so that I can record my journey for my own personal reflection mainly but also for anybody in a similar situation so that hopefully this can help.

A little background, a couple weeks ago now, my debts and excessive spending finally caught up to me and I realised the trouble I was in with around 24.5K in debt to various loans and CC's. After all was paid in a month I would usually be left with just over £100 to support myself, my partner and our 1 year old daughter. My parter doesn't know about any of this and for my own sanity, at least for now, I won't be telling her (just while I get everything set up and get started sorting everything, I know I can't hide from it forever).
Before settling on my chosen solution (DMP via StepChange) I did a LOT of reading and research to find out about all the different options on what help was available and what things I could do to cut down my spending.

If you are someone reading this looking for help or even just some friendly, non-judgemental advice, I cannot recommend StepChange enough. I used their online budgeting tool so that I could see all of my essential spending laid out as well as my current debt repayments and from that StepChange recommended a DMP as the best solution to get everything sorted. At present I have submitted my application and am currently waiting to hear back from them (I've been advised after calling them that the current wait time to get set up is just over a week so this lines up with when I submitted my application).
My DMP is set to last 13 years and 7 months but I'm well aware from a previous post I made that this length of time is likely to be reduced as I may be able to up my payment amount at some point or even just give a lump sum payment if I win or make any extra cash at any point that I want to use to pay my debts off.


Things I've done since applying:

I've had my first payday since setting up my new budget and I've made sure to stick to it as rigorously as possible. One thing I've found helpful is to set up a savings account with my bank and move all the money for upcoming payments later in the month into that account so that I don't risk spending it accidentally. I've also split the amount of money I had left over after paying bills or putting bill money aside by the number of weeks until my next payday.
Doing this allows me to put X amounts of weeks away in the savings account and then give myself a weeks pocket money so to speak. This might sound silly but I know what I'm like if I've got money so this makes sure that I can't just spend spend spend.
One last thing I'm doing with the weekly money is that any I've got left over at the end of each week gets transferred into a separate savings account with a 45 day notice period. This 1-Stops me being able to withdraw it at a moments notice and 2- Allows me to build up a savings pot to use as either an EF or to one day use to make a lump sum payment into the DMP and bring the time down on it.

I've also set up a spreadsheet of my budget so that when things like the MOT come up I can adjust my weekly amounts accordingly.

Reduced my car insurance payments by £20 p/m - I've updated StepChange of this.

Unsubscribed from unnecessary or unused services as well as multiple mailing lists from brands that I know I'm particularly susceptible to.

Cancelled DD's to my creditors to stop them from being paid and to get the process of defaulting to start. I know a lot of people say to default before starting DMP but for my situation I felt better getting help in place before that happened so that I didn't have to worry about anything.



Aims for the future:

I would like to reduce the time on my DMP at least to be only 10 years long, less if possible but I'll think about that later.

Create a lump sum/EF of at least £1000 or more.

Have my first NSD and aim to have at least 1 a week for every week after that. I'm going to be keeping a log on my phone for personal record and also so I can update this post.



As far as this post goes, my plan with updating it is to come back once my DMP is set up and underway and then come back once a month for the first few months or when there's a major update. After the first few months I'll come back every year with a review around the time of my DMP annual review.


Sorry for the rambling but like I said this is for my personal record first and foremost so it'll be good to come back here in the future to see where I was against where I will be.

Thanks 

joedenise

Good luck.

enthusiasticsaver

Good luck with the DMP and well done on the changes you have put in place. I look forward to seeing your progress. 

[Deleted User]

Big respect to you @LemonHead0102
Once we've had our 'lightbulb moment' and we 'own it' things become much clearer in our minds and it gives us the strength to get the job done.

Many of us, on here, have been where you are now and have emerged the other end with heads held high and a certain degree of smugness because it's damn hard work and not many choose to address it - we know exactly what we've achieved though.

mnkone

Hi LemonHead0102, I recently came back on here and from what you have listed, your situation sounds very similar to what I was and am still somewhat in. 

I have to say, the one thing which really helped for me, is that for a long time I never told my wife, partly embarrassment, partly fear of ruining things between us and her leaving with the little ones, but when we spoke about things, talked through how this all happened, she somewhat understood and I am now able to work on everything with a clear head. For a long time it seemed impossible for me to talk to her about it, which I can imagine is something you feel too. But I would say when you feel comfortable to, just break that news to her. I think she will prefer that, than to find out herself randomly. 

Other than that, I hope things get better and better for you as you focus and work through it all.

LemonHead0102

mnkone said:

Hi LemonHead0102, I recently came back on here and from what you have listed, your situation sounds very similar to what I was and am still somewhat in. 

I have to say, the one thing which really helped for me, is that for a long time I never told my wife, partly embarrassment, partly fear of ruining things between us and her leaving with the little ones, but when we spoke about things, talked through how this all happened, she somewhat understood and I am now able to work on everything with a clear head. For a long time it seemed impossible for me to talk to her about it, which I can imagine is something you feel too. But I would say when you feel comfortable to, just break that news to her. I think she will prefer that, than to find out herself randomly. 

Other than that, I hope things get better and better for you as you focus and work through it all.

That's exactly the situation I'm in, I think I'm also hesitant because we're still quote young so I've got extra embarrassment from being in this situation at our age. But I really appreciate your comments and will definitely talk to her once I'm more comfortable with my situation. I think once everything is in place and I feel happy that things are going to plan and not spiralling any more I'll be able to talk about it.

LemonHead0102

So I've got my first major update since initially posting. I received an email yesterday regarding my DMP stating that some details were required due changes with my outgoings in December. I was initially confused so called StepChange and the advisor noted that I put on my credit file that I'd put in about my mortgage rate changing which I'd completely forgotten about 😅 After going back through my emails I found the new amount and called back today to provide it.

The advisor I spoke to today advised me that with that new figure my monthly payments will be brought down a bit which is fine, I feel like after some time I'll up it to my original amount again once I've got my feet. The new figure means that my plan is set to last for 15 years and 2 months which is scary but still better than having to repay my creditors with the higher repayments and I'm sure once I up my monthly payments again It'll decrease again.

I've also had my first NSD and have set up a savings account with a different bank (my current interest was only 0.4% p/a but the new one is 2% p/a). As well as putting away what's left of each weeks budget I'm also going to tilly tally every Wednesday just to get a little extra in the pot along the way.

In slightly more concerning news, after cancelling my DD's one of my creditors sent a letter to confirm it had gone through and they wanted me to pay via postal check. My other half saw the letter before me due to her not working Thursday/Friday and she then asked me what it was all about. I'm ashamed to admit that I couldn't tell her the whole truth. I told her it was in regards to an old loan that I had years ago which isn't completely false as I did have a loan years ago that I did pay off but it wasn't to that creditor. I feel awful having lied to her but I really just don't feel comfortable having that conversation yet while my plan is still being set up and I'm yet to build a somewhat stable savings pot. Once I've been on the plan for a bit and the savings look tidy I'll feel a lot better because I'll be able to justify and explain a lot better.
I know there'll probably be some people reading this saying that if we trusted each other then I could just tell her and I understand that side of the arguments but for me it's not the case. She's grown up in more of a countryside village where the attitude to money is a lot more strict and rigorous than what I grew up with in a city, especially with my parents and other family members always getting new loans and credit cards. I have now applied for breathing space, which with hindsight I should've done earlier, so now my creditors shouldn't contact me anymore via post and I won't have to worry about getting any other letters for the time being.

As before, thank you to anyone that reads this, I hope if you're in this situation now or reading this in the future then it can help to know you're not alone. I'll update again once the DMP is active and everything is on the go.

LemonHead0102

Time for a nice update. I received an email today to say that my DMP has been approved and is all set and ready to go from December 1st 🎉

I will admit that the panic set in when I saw in the email that my account password would be sent out via post as I don't know how the envelope would look and I didn't want to have to have a situation like last week where my partner almost found out the truth before I'm ready to tell her. But after a call to StepChange the advisor confirmed me me that 1-I'll receive the password via email and 2-Any mail that does come from StepChange is completely blank so I'd have no need to worry anyway about mail being intercepted.

I'll pop back on here once I'm into my first month on DMP or if anything major happens in between now and then.

enthusiasticsaver

Good that the DMP is set up and ready to go and hopefully your budget is working ok.  Setting up savings is also a good start.  As for when you tell your partner it needs to be before she applies for any credit as presumably you are financially linked so any credit report will flag up your defaults. It is important to realise that this is joint debt you have both built up and I would strongly recommend going forward you both work together to tackle this. Her abdicating financial responsibility to you does not excuse her. Does she work and do you have separate bank accounts? 

Makingabobor2

Will subscribe to your diary and wish you lots of luck. My only worry is that you have not told your wife the truth and are possibly telling her a few lies here & there in order to cover your tracks. A DMP and a future frugal life style is not something you can do alone. You both need to be onboard with this and tackle it together. She needs to understand that she can no longer use credit cards, apply for loans etc and that you have to cut your daily spending and only live on money you actually have, 

LemonHead0102

@enthusiasticsaver
I appreciate your comments. In regards to telling my partner I defiantly will soon enough once I've had some time to get settled on the DMP and get the savings pot built up somewhat. I understand that she would be financially linked to me through the mortgage but apart from her credit card which she barely uses she doesn't have any debts of her own. She does work all be it only half a week due to child care requirements and we do have separate bank accounts for our personal spending but all bills for the household go out of a joint account.