Starting a DMP and need advice

Movingforwardfinally22

I’m currently preparing to start a DMP. Some creditors have defaulted others haven’t. Please can I have any advice you have on starting a DMP? 

sourcrates

Is there anything specific you want to know?

Are you going it alone, or via a debt charity?

It`s preferable to have defaults first, as all interest is then stopped, although this can also be achieved by complaining as well, you need an emergency fund in case anything breaks down, around a grand for starters, then aside from making reduced payments according to your disposable income on a monthly basis, there isn`t an awful lot more to say about the process.

thewad

Shouldn't really be saying this on here but don't declare everything and over exaggerate outgoings otherwise you'll be living but hoping nothing expensive ever crops up......they don't check any of your financial details including savings or earnings so leave yourself something to fall back on......or rather when I finished mine in 2020 they didn't.

Movingforwardfinally22

I am going with step change. I’m ready to press submit just waiting on a few more defaults. If some companies have also ready defaulted me but others haven’t do I just carry on waiting for the others to default me? 

I’m worried the creditor wont accept my monthly amount either 

sourcrates

Movingforwardfinally22 said:

I’m worried the creditor wont accept my monthly amount either 

That`s not your problem, I've said this 1000 times to posters who say exactly the same thing in their threads.

You make the payment you can afford, and keep on doing so, it matters not a jot if a creditor accepts it or not, if they don`t like it, they simply sell the debt and you continue to pay whoever buys it and then writes to you.

There is no acceptance or non acceptance in debt management, you do your thing, they do theirs, it`s quite rare for those in debt management to end there plans with the same creditors they started with, these things are always in flux, accounts are sold, or passed between different collectors, non of that is your concern, your only job is to come up with a workable budget you can easily live on, and the rest of your disposable income goes to your debts.

There is no other agenda involved, It really is that simple.

stu12345_2

what about as the wad poster stated you really up your expenses. in your income expenses sheet.but don't burn through as much expenses and put away as much as humanly possible in order to hit creditors with full and final settlements as fast as possible.

kills two birds with one stone eg
your debts went interest free and charges stopped cos your on a debt management plan or defaulted or both. my interest charges stopped as soon as went on a dmp.

plus if you get good full and final deals you then pay off your creditors.
it actually seems to beat those that are slogging on making standard  monthly payments with  say 23% interest rates and managing  at least min payment per month on cards etc.

ok their credit status will  now be  better than yours.but overall you end up paying back much less than them potentially.
this is what originally  put me into difficulty. for years.not the balances as much but the interest that went on on per month.

it was only when I went on a dmp did I see the balances come down faster cos of no longer any interest per month.

when I started my dmp I thought it was all about living on beans and toast and making as huge amount as possible monthly payments to my dmp to pay off the debts as fast as possible.

.i was wrong cos as debts went interest free( either  stepchange arranged that through their negotiating and/ the defaulting }was interest free anyway and I found myself struggling paying too much.

. so now I give myself a big buffer in my car repairs food leisure savings emergency fund gas water electricity  clothes etc so that even if I don't burn through what I state at least I know I have given myself a better standard of life than just making min payments etc when I wasn't on a dmp.

I now use this extra allowance buffer to save up towards  either full and final offers  or bigger emergency fund or simply live better. than my beans and toast method

lillypoo

Read as much as you can on here. Read the whole of the dmp mutual support thread.

Make an emergency fund an absolute priority. I only stopped my cc payments in may/June and since then my ef has paid for two new tyres, a separate puncture and reflashing my chimney.
Try to also save towards future priority debts/bills. Eg have a savings pot for car maintenance. 

Don't get involved in communication with your creditors. 

Personally I'd consider going self managed rather than through step change. It's all quite simple if you take the advice on here ... 

I think if you've coped ok with the phone calls and texts etc leasing up to defaults, you're over the worse. Make a lot of cups of tea, stay out of the rain and Read Read Read if you can today. Then decide if you really need step change or if you can go it alone with the forums support. 

fatbelly

I think stepchange can be useful. Remember you can always switch to self-managed later.

Important things at the start of a dmp are to have banking arrangements in place with a bank unconnected to your debts and some sort of emergency fund saved up.

Rob5342

stu12345_2 said:

I was wrong cos as debts went interest free( either  stepchange arranged that through their negotiating and/ the defaulting }was interest free anyway and I found myself struggling paying too much.

Stepchange don't do any negotiating, they simply send a letter stating what you'll be paying and asking them to stop interest. You could send that same.letter yourself. Ideally you should let the debts default before you involve Stepchange.

Stepchange can be useful initially when you have just started to take control.of your debts. Once you have got to grips with things and want to pay different amounts to different creditors or make full and final offers then they can be more of a hindrance than a help so at that point you'd be better off switching to managing it yourself. They are funded by the creditors so to maintain that funding they take an approach if treating all creditors on a DMP the same.

stu12345_2

agreed stepchange are ok in that they take the admin work away from you.  if you have the energy do it yourself. overall I found the interest stopped very fast when I went onto a dmp. it was always the interest that did the damage before I was on a dmp.

it has always been at the back of my mind in that do stepchange have any clout or not when dealing with your creditors or would the situation be exactly the same if you did it on your own 
I think folk should use stepchange up until you get word back from the CCA letters you send to your creditors and or you have money saved up to make any full and final settlement offers to any of them

at that point you have to go it on your own DMP. cos stepchange policies won't allow individual non pay to certain creditors or individual full and final settlements.

I am waiting on replies from my creditors about the CCA letters I wrote them.according to website debt camel.it says keep paying them whilst you wait replies.give them 3 months max to produce the CCA agreements.then if no agreement.stop paying those creditors.
obviously this  individual stopping can only be done through a self managed dmp.

my only concern is you have any money saved up and you make any f and f offers but not them all and later down the line you have to get a DRO instead.would it be rejected cos you did preferential treatment cos you paid off some of your creditors.

movingforward22 I would like to hear how you got on and what route you choose.

Rob5342

As Sourcrates says above the creditors are just paid what you can afford and that's it. If anything using Stepchange would make things worse for you rather than better, as they promote starting payments immediately which can delay defaults.

Stepchange can certainly be a useful stepping stone to get started, but as you say any.deviation from their fixed approach will require managing it yourself. It's very little effort managing it yourself, just an email to tell them what they'll be getting and a couple of minutes in your banking app to set up a standing order.

However you do it the most important thing is to get defaults first, it can drag things out for years longer then necessary if you don't.