Searching for a Debt Free Happy ever after

sourcrates

Well you can take the "hybrid option", go with stepchange for now, get into a routine, once you are satisfied you can do this alone, cut your ties with them and move to self management.

Lots of people choose this approach, as it gives them much more flexibility and control over matters.

All creditors ask is that you take advice from an organisation such as stepchange, so you have already ticked that box.
If an account has already defaulted, then interest and charges stop automatically, and your debt is frozen, creditors will also stop interest if your monthly payment is below the contractual minimum.

Self management is not a reason for them to start charging you again, but paying too high a monthly payment on a non defaulted debt is, which is why we recommend getting defaults first, although that is not always possible due to regulations concerning the fair treatment of customers in debt.

So you do have choices here.

gwynlas

Stepchange are very understanding you can ring them and tell them you are finding things impossible and need to redo your monthly payments but need a break in order to repay loan to friend for car repair. It does not matter if you only owe £250 on something Stepchange apportions your payments all you need to keep an eye on is total amount owed and this will decrease year on year. Do not stress if this takes you upto 2030 or beyond you need to not be stressing. What you appear to have done is agree a payment plan that might be achievable if you tighten your belts but that is an uncomfortable way to live. I know you are both working but would there be any mileage in either of you taking on something like a domestic cleaning role or pet sitting to add to your income?

enthusiasticsaver

Firstly do not go for an IVA.  I have noticed a worrying trend in these being advertised more.  They usually cost and are far less flexible than a DMP.  

As a start I would contact Stepchange and tell them you cannot pay more than £500 a month.  If they argue the toss then go self managed.  This is an informal arrangement  and companies will not automatically start charging interest if you move to a managed plan to self managed.  The very fact you are unable to make things work paying over £600 a month indicates you still need some sort of  debt solution. Have all the debts defaulted or are you on arrangements to pay on some of them? If you have no emergency savings you could suspend payments for a month to get something in reserve.  As said the ideal thing would be for the payment not to be set too high so you have leeway for savings.  There is little any of these creditors can do if you decide not to pay for a month or two. 

sourcrates

enthusiasticsaver said:

Firstly do not go for an IVA.  I have noticed a worrying trend in these being advertised more.  They usually cost and are far less flexible than a DMP.  

This article from Debt Camel in 2022 on the IVA failure rate, and common reasons why they fail, is worth a read -

More than a third of IVAs fail - and this may get worse · Debt Camel

Winkflower

Just got back from the park with the children. 
Was so nice to get some fresh air and Vitamin D, to not be worrying about money.

Home now and am so grateful and thankful for the help and replies on here.

Having had our DMP for just over a year we are struggling mentally with the last  weeks of the month when there is more month than money. Have sold.things on market place,, clothes on vinted, changed put food shop habits and last month even pawned a necklace (got it back on pay day to make ends meet).

So we do  really need to look at our DMP budget. 

DH wanted to consider an IVA but going to show him all the helpful info on here re those - thankyou so much, especially for the article.

I'm going to speak to stepchange but head spinning thinking about whether I should pause or a month, self manage to get back on track as well as a new lower monthly payment. 

I work school hours and ferry the children around to different settings before and after. Hubby works shifts and a mixture of days ans nights. We don't have family around which makes additional jobs.tricky childcare wise as his days change but we both do overtime wherever we  can. I'm doing surveys too.

So I really need to do a SOA's but as a starting point as the children still need me here are pur debts laid bare for accountability.

I've been brave and had a rifle through letters and have some defaults but I'm not sure which I have defaults on.

Al ot of these were where we didn't have money for birthdays, clothes, Xmas, carpets, washing machine and ended up getitng credit upon credit - so stupid and so annoyed and ashamed..

Having looked a little theough letters the HSBC loan situation seems worse than I thought. When the plan renewed in Feb everyone accepted it accept the HSBC loan, ok I thought from looking at threads, it will get handed over to a collection agency, but they have also sent a letter as well as that demanding the full amount by April 23rd. I'm catastrophising and imagining  CCJs and door knocks now.

This loan was a consolidation loan. Seemed a good idea, bad one now I see. It was for £18k. We got it down to about 10k last year at the start of the DMP and it is now at apprk 8.5k.

All of the interest was lumped on to start with and it has all been paid back. Eek do I need to panic about this one? Is demanding it back normal before debt consolidation?

OK and breathe.  So here are the debts, I need to work out which have defaults and the interest rates to see if anyone thinks worth snowballing maybe?

Where there are 2 accounts the same its where DH and I both have accounts.


HSBC loan                      £8,401.84 (was£18,000)
MBNA                              £3,788.13
New day (Aqua)            £3,351.53
New day (Marbles)       £3,342.24
Moorcroft (was Natwest loan) £2,944.56
Very                                 £1,827.52
HSBC CC                        £1681.65
New day                          £1649.98
Lowell                              £1443.60
HSBC overdraft              £1,115.34
Very                                  £1027.32
New day (Aqua)             £920.45
Next                                  £569.45
Moorcroft (was Natwest OD)  £557.07
Novuna (carpets)           £224.33
Capital one CC                £130
Creation  (w machine)   £83.27
Creation                           £1.69

Paid in last year £7,708
Total remaining £33,060.97


DFD Nov 2027 - desperate to get this down but also drowning in the £607 pcm repayment (I want it all I guess!)

Thanks so much, this forum is amazing, eih my daft younger self had found it!

Best wishes for a happy Bank Holiday, DH working but having a spend free meet up with a friend.

Thankyou all I feel a bit better and may sleep a little tonight!

Will get on with an SOA later too.

I just so want to be able to live each month in a way in which I can breathe.


Wx

Winkflower

The HSBC loan has also disappeared from my HSBC app, that's the only app I kept from the debtors, I deleted the others from my phone when we started the DMP as avoid avoid felt less scary and better at the time. Tha the weight was shifted to Stepchange a little but now I'm not sure what has defaults.

Seriously considering asking for a month break from the DMP to pay friend back but with the HSBC loan one up in the air will I make things worse with that if  I do at this time when I don't know whats happening with it and they have demanded the full amount back?

Thanks for reading.

Just spotted a patch of bluebells that have popped up in our garden at the bottom, trying to focus on the elittle things that make me happy.

W x

Grumpelstiltskin

It doesn't matter who demands what if you can't afford to pay it then they just can't have what you haven't got.

Just tell Stepchange you have got to stop your payments for a short while as you just can't afford them, don't say 1 month it may take you longer than that to sort everything out, cancel the direct debit now so that May doesn't go out.

 Nothing is going to happen quickly so don't panic, you must sort out exactly what you can afford to pay and enable you to live..

Winkflower

Thankyou for replying. What does happen if you miss one or 2 step change payments?
- DH concerned that they have agreed to accept the amounts agreed with step change and that if we don't pay wiill be in breach.
That Stepchange will cancel it, we do need to make that call!
Someone else has advised, Sourcrates I think, thanks to that person, that they cant just then decide to add al the interest charges back on again which is helpful
I guess as a Mum and as someone who has always paid i'm scared of knocks on doors and CCJs etc. I've read that as they are unsecured i shoudn't panic too much but i'm doing that quite a lot.
Wondering if the HSBC loan is heading towards a CCJ as had that demand and was just concerned it would provoke and make the things i'm scared of happen.
Great advice thankyou, really appreciated and you are right if it's not there to pay...

Eyeing up the end of the garden and wondering where to start with a veggie patch. My Mum had an abundant greenhouse and wish i'd paid attention.

Despite the scary total im proud we paid over £7k off in the last year looking at the numbers (just can't maintain it) so takignt hat away.

Going to pop on prolific this eve and search out some other survey sites too,

Best wishes

Wx

sourcrates

HSBC are just sending standard generic collection letters, they can demand what they like, doesn't mean they will get it.

Standard procedure is to pass bad debts to collections, so that`s likely what will happen.
I suspect this account is still with customer services operating under an arrangement to pay, an arrangement they have now decided has gone on long enough, so they will be looking to pass your account down the line to collections, who have much greater discretion for making payment arrangements.

The same as what`s happened with your other debts, its just HSBC are a lot slower to comply that`s all.

Eventually they may pass it over to an external collection agency or look to sell it on to a debt purchasing company.
Forget about CCJ`s, they are normally reserved for the debt purchasing companies to apply for, but much further down the line, and only if you continue to ignore contact from them.

If you need to pause your DMP, just tell stepchange what you want to do, they are not there to disagree or argue with you, if you need to miss a payment or two, tell them why, and they will be fine.

Its only if you did that persistently that they may consider cancelling your arrangement.

Grumpelstiltskin

Nothing will happen if you miss Stepchange  payments as long as you let them know you are having to reassess your finances as you just can't afford what you are paying.

It's just a pity you didn't come on here before you started with Stepchange as you would have been advised to stop paying all your debts to enable you to build up an emergency fund, could could have easily gone months without paying and hopefully would have had defaults then you could have decided to start paying.