Is it time for a DMP or try to ride the storm?

CurlyTop11

enthusiasticsaver said:

@CurlyTop11 I can see you have decided on a DMP which I think is your best option. If you weren’t living with your parents this would have been an issue long ago as there is no way you can afford to live independently and pay out over 50% of your wages on unsecured debt payments. The interest on a few of those will be high when 0% deals expire and even though you are only paying £200 plus grocery money to your parents you still only have £50 spare and haven’t budgeted for gifts, car costs etc. a DMP should not stop you renting although a dog might be an issue. Very few landlords allow pets. I assume those big loans were debt consolidations? 

Yes, it was mainly consolidation. Just fell into the trap of thinking you pay this off, then start a fresh. I wasn't disciplined enough (or at all really), for that to be the case. Understood re renting. It's obviously something I want to look at, although I think for the timebeing though I need to park the idea in my head and concentrate on sticking to a budget and saving as much as I can for when the defaults come.

I am expecting the calls etc to start any time this week as that's when most of the payments are due to be made. It's definitely not a great feeling, but am feeling a bit more positive about the chances of sorting this out going forward at least.

Rob5342

CurlyTop11 said:

enthusiasticsaver said:

@CurlyTop11 I can see you have decided on a DMP which I think is your best option. If you weren’t living with your parents this would have been an issue long ago as there is no way you can afford to live independently and pay out over 50% of your wages on unsecured debt payments. The interest on a few of those will be high when 0% deals expire and even though you are only paying £200 plus grocery money to your parents you still only have £50 spare and haven’t budgeted for gifts, car costs etc. a DMP should not stop you renting although a dog might be an issue. Very few landlords allow pets. I assume those big loans were debt consolidations? 

Yes, it was mainly consolidation. Just fell into the trap of thinking you pay this off, then start a fresh. I wasn't disciplined enough (or at all really), for that to be the case. Understood re renting. It's obviously something I want to look at, although I think for the timebeing though I need to park the idea in my head and concentrate on sticking to a budget and saving as much as I can for when the defaults come.

I am expecting the calls etc to start any time this week as that's when most of the payments are due to be made. It's definitely not a great feeling, but am feeling a bit more positive about the chances of sorting this out going forward at least.

Iknow what it's like, I often moved my debts to other cards thinking this will be the year I make a difference, of course it was the same as any other year and I just got into more and more trouble.

It can make you feel very uneasy at first as it's all unknown, but it won't be long before you are wondering what you are worried about and you might even get frustrated that they aren't defaulting you. I didn't get any calls at all with Aqua or Virgin, they just kept writing every month but wouldn't default me.

lillypoo

Can echo what Rob has just said. I stopped payments back in May and was literally terrified

One bank called my mobile four times a week at first but I never answered and it soon stopped

They've written a few times but I've just filed the letters

My other bank with whom I had two CCs and an overdraft only ever texted about four times, immediately stopped all interest, and have only sent the usual bills/statements

The scariness soon goes away

I've now had letters saying I may have to pay the full amount owing, now that was a worry, but it's a legal requirement before they can default you and sell on the debt ( or so I understand) so I am assuming things are moving on. They just don't even try to contact me any more.

My main advice is please please please start a emergency fund. In the last 5 months I've had two punctures, needed to have the car serviced, came to the end of my fixed electricity contract and had my monthly dd go up by 50% AND  had to have the flashing round my chimney replaced. All paid for from my ef with no credit taken out.

Good luck. 

Rob5342

lillypoo said:

I've now had letters saying I may have to pay the full amount owing, now that was a worry, but it's a legal requirement before they can default you and sell on the debt ( or so I understand) so I am assuming things are moving on. They just don't even try to contact me any more.

Yes that's a legal requirement. The wording of default notices can sound quite worrying, but all that happens in practice is that the debt gets sold to a debt collection agencies who takes whatever monthly payments you offer.

CurlyTop11

Thanks both @Rob5342 @lillypoo that's exactly what I was like in terms of thinking 'this is the one I get it sorted' and of course just never did.

I agree re the emergency fund now. I have started different pots and included one separately for an emergency fund. I have also put a bit more in pots for like car insurance etc, so when I get to renewal, if it is less than expected, I have some extra to transfer to emergency fund.

One question I have is once a company defaults me (hopefully sooner rather than later), do you start to make payments straight away? For example, if company A defaults after 1 month, but company B is 6 months, do I start paying company A a 'token affordable amount' straight away? Or do I wait until the debt is purchased first? And so on for each individual debt. I'm sure I will be back and forth for advice when the time comes.

Floss

Wait until someone sends you a default notice - and it has appeared on one of the 3 credit reports.

Then write & tell them they will be getting £X (their share of the amount you have available for debt repayments) and request the details to set up a standing order with your bank. 

CurlyTop11

Floss said:

Wait until someone sends you a default notice - and it has appeared on one of the 3 credit reports.

Then write & tell them they will be getting £X (their share of the amount you have available for debt repayments) and request the details to set up a standing order with your bank. 

Thank you. Would the best way to do this be by working out total I can pay and just allocating the % of total against the total I pay now? I.e. pay MBNA £65 currently, which is 5% of total payments, therefore tell them I would be paying 5% of the new total I decide is affordable? Without telling them details of other payments etc.

Rob5342

It's up to you how you do it really but that would be a good starting point. The way I did it initially was to split the payments in the same proportion as the outstanding balances. When I had spare money I paid it off the smallest one, and when that was clear I addeed what I had been paying to the next highest. It helped motivate me to see the smaller ones going quite quickly.

Floss

CurlyTop11 said:

Floss said:

Wait until someone sends you a default notice - and it has appeared on one of the 3 credit reports.

Then write & tell them they will be getting £X (their share of the amount you have available for debt repayments) and request the details to set up a standing order with your bank. 

Thank you. Would the best way to do this be by working out total I can pay and just allocating the % of total against the total I pay now? I.e. pay MBNA £65 currently, which is 5% of total payments, therefore tell them I would be paying 5% of the new total I decide is affordable? Without telling them details of other payments etc.

I did it as Rob5432 did it - take the total of all debts and work out the percentage of that figure for each individual one.

For example (and simplified!), total £20k, debt A £5k debt B £10k, debt C £3k and debt D £2k and apply that to your figure available to repay of £100. So,

A=25% =£25
B=50% =£50
C=15% =£15
D=10% =£10
_____________
100% = £100

CurlyTop11

Thank you both @Rob5342 @Floss that's what I was thinking, I just wasn't sure if it needed to be weighted towards the bigger balances.