Starting a DMP advice

forestcub

Hi there,

I’ve got to a point where I’m feeling a DMP would help me sort my debt out (currently £11,000 spread between a start up loan and credit cards/small overdraft) 
with rising costs and losing my 0% periods and being unable to transfer I just want to be able to pay things off in the most effectives/stress free way. 

I work 4 days at week and also support myself with self employed income so think as I work full time also that can help set up a DMP through SC. 

I have been on a DMP before about 10 years ago when student loans said I owed them money from living abroad - I didn’t btw -  (and at the time a friend said go to SC and they said it was the best thing to do as I had a small credit card and no job at the time) I since won my case with student loans and stayed on the DMP for the credit card anyway and my file recovered. I’ve since found myself in debt again for various reasons over the past few years and now with a small business start up loan (classed as personal loan).

Questions -

I never knew about not paying your creditors to go into default, I just started my DMP within a month of finding a job last time. After reading these threads, is it better to effectively ‘not pay’ and ignore your creditors for a few months and then begin a DMP?
OR
should I contact SC and begin again within a month or will that negatively effect my file for longer?
I’m not interested in borrowing credit again but if I do ever manage to be in a position to get a mortgage etc it would be good to know where I stand. 

Also would rather not manage one myself as I find it quite difficult and stressful to do it alone (I’m also adhd which makes it harder too!) is SC a good option again? 

Thank you everyone

Grumpelstiltskin

Number 1 Don't  rush into anything.

If you put a honest SOA on here you will get advice on what is the right way to go about this.

SOA Calculator (stoozing.com)

Format for MSE

forestcub

Grumpelstiltskin said:

Number 1 Don't  rush into anything.

If you put a honest SOA on here you will get advice on what is the right way to go about this.

SOA Calculator (stoozing.com)

Format for MSE

Here it is, I’ve just done one on SC too so can see where I’m at. Find the text a little hard to navigate on phone but give it take this is about right. My SC one is accurate and looks about the same but you get an idea!

Monthly Income Details[/b]

Monthly income after tax................ 1295

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 154[b]

Total monthly income.................... 1449[/b][b]

Total monthly expenses.................. 1193.75[/b]

[b]

Total Assets............................ 1800[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Credit ........................5266......150.......29

Personal loan .................4766.59...98........6

Overdraft .....................450.......0.........0

DWP............................100.......10........0

Family - car ..................1740......50........0[b]

Total unsecured debts..........12322.59..308.......-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,449

Expenses (including HP & secured debts). 1,193.75

Available for debt repayments........... 255.25

Monthly UNsecured debt repayments....... 308[b]

Amount short for making debt repayments. -52.75[/b]

Thanks for your help  

RAS

Can you complete the SOA fully, format it for MSE and post it in it's entirety, please.

How many in the household,  housing costs, what is "other income"?  Child benefit, SE profit, or takings? Any savings towards SE tax etc?

fatbelly

On the basis of what's there, a dmp looks ok - it would take around 4 years to complete.

Yes, allow loan and credit card (if that's what it is) to default first. 3-6 months should do it and this would allow you to save £1000 -1500 into an emergency fund.

Important point is not to do your banking where you have debts - so a different bank to the loan and credit card and overdraft.

Is family car something that you borrowed from a family member to buy a car? Do you want to repay them first before starting the dmp? Or make their £50 payment an essential payment and pro-rata the rest?

forestcub

fatbelly said:

On the basis of what's there, a dmp looks ok - it would take around 4 years to complete.

Yes, allow loan and credit card (if that's what it is) to default first. 3-6 months should do it and this would allow you to save £1000 -1500 into an emergency fund.

Important point is not to do your banking where you have debts - so a different bank to the loan and credit card and overdraft.

Is family car something that you borrowed from a family member to buy a car? Do you want to repay them first before starting the dmp? Or make their £50 payment an essential payment and pro-rata the rest?

Yes stepchange have said 5 years. I’m trying to see why it’s different on this calculation but I know the one I have for step change is correct.

It was a loan from family to buy the car I have so I’m keep that payment essential and happy with that as not fair to them. 

Thank you for clearing up when to start DMP too as I was a bit concerned about not having much of a fund if I started it next month. It feels scary ignoring them but I guess that’s the better option? 

Also do you mean have separate bank accounts for the loans and then another for the credit cards or just one new one? Last time I was on a DMP I opened a fresh account (which I already have 2 extra so can use one of them?) 

Thanks again  

forestcub

RAS said:

Can you complete the SOA fully, format it for MSE and post it in it's entirety, please.

How many in the household,  housing costs, what is "other income"?  Child benefit, SE profit, or takings? Any savings towards SE tax etc?

Sorry I do have it fully on my phone but left out everything that was blank. My other income is some self employed earnings which fluctuate each month (as does my full time earnings as on hourly and we don’t get things like sick pay etc) 

no benefits, children. One partner in household and we are financially independent of each other apart from sharing bills. 

Thanks  

sourcrates

Basically don`t bank where you have outstanding debts, the bank "could" use the right of "set off" to take the money you owe.

I have said this a million times in other posts, but I`ll say it again, debt collection is not a quick process, it can and does drag on for months, even years sometimes, yes there will be phone calls, yes there will be letters, but all can be ignored, once a debt defaults no further interest is charged, and you have a clear 6 year window till your credit file recovers.

You also need to have that emergency fund, that is a priority.

forestcub

sourcrates said:

Basically don`t bank where you have outstanding debts, the bank "could" use the right of "set off" to take the money you owe.

I have said this a million times in other posts, but I`ll say it again, debt collection is not a quick process, it can and does drag on for months, even years sometimes, yes there will be phone calls, yes there will be letters, but all can be ignored, once a debt defaults no further interest is charged, and you have a clear 6 year window till your credit file recovers.

You also need to have that emergency fund, that is a priority.

This is so helpful and also puts me at ease about things. Thank you for sharing this information again