Help please for DMP.

Debtfreequeen

This is my first post and looking for some help for myself and my husband. My husband has OCD and ADHD and has had these diagnosis in the last few months, this has really helped us understand a lot of his spending behaviours. We have built up debts on credit cards, payed off with loans and then started again to the point we are at now and we are at the point where we want this cycle to end. I am self employed and my business is in the early stages so most of my income goes back into the business. My husband has a full time job and we receive tax credits, CB and PIP for my husband and also DLA for one of our children. I am struggling with completing our SAO as all the debt is in my husbands name as he has the job so has always been more available to him. If he enters a sole DMP how do we work out his expenses. He pays all bills but the benefits we receive are joint so do we half these so I have some income from them? It’s all very confusing. The house is solely in my name as I bought the house before we met. Debts at present are AA £24000 personal loan, MBNA personal Loan 21000 and we are about 1700 into a joint overdraft. We just want some help on how to go forward that protects my credit but so we can deal with our debts. My husbands car has also just failed MOT we have no savings to buy a car and our thoughts are to get a descent small car on finance that will see us through the DMP, should we do this before we default on any payments as my husband is reliant on a car for work. Sorry for the long post but we are really wanting to get out of this mess. 

Grumpelstiltskin

If you have joint accounts with your husband you will be affected.

Do not think about getting a loan for a car, you can't borrow your way out of debt. That is if you could get one with your level of debt.

Do not rush into a DMP, you need to be sure what you decide to do is the best way forward.

First of all fill in a honest joint SOA
SOA Calculator (stoozing.com) Format for MSE and copy and paste it on here then we can see exactly what your position is and can advise you on the best way forward.

Debtfreequeen

This is where I’m struggling as how to proportion our finances. We could close the joint account and then have no financial connections and pay off the overdraft. But how do we separate our income and expenses to do a SAO as benefits are in joint name and I receive the DLA and CB in my name but our tax credits in joint names. 

RAS

Hi, it's actually much better to do a family Statement of Affairs rather than try and split your budget into his and hers, at least from the point of view of getting the best advice on how to go forward.

I'm not good on cars but I suggest you are now unlikely to get much more credit, so the replacement car has to be very cheap and you must budget both for maintenance and replacement.

Regardless of the house ownership, the creditors can't come after the house to pay off consumer debt, although they might have been able to record a restriction if you shared ownership. But because the bulk of the household income comes from him, and he would have helped fund any mortgage payments, if he went BR the OR would claim he had beneficial interest.

Your biggest problem protecting your credit record is the overdraft because that account is joint so defaulting on that wrecks your credit rating as well.  It is also your most urgent problem re paying off debt as it will have a very high interest rate and can be withdrawn at any time. 

In the very short term, row back massively on any Christmas spends this year, look round and see if there is stuff you can still return or sell and hit that overdraft. 

Hubbie needs a new basic bank, avoid Lloyds and the Bank of Ireland Group plus your overdraft provider. Your aim is to fund a new very cheap car and to get his name off the reduced overdraft. Then he can get his salary transferred to the new account and stop paying the loans without wrecking your credit record.

As you've already discovered "paying off" credit card debt with loans just kicks the can down the road and when you catch up the problem is even bigger.

I'd also suggest that if possible you get some part-time salaried work to increase income if you are currently taking less than £12k from the business. 

So work on the SOA together this weekend and let's see where you stand. Also check both your credit records so you know what might be possible to fund a replacement car.

fatbelly

Don't forget that there are other boards here so you should ask on the motoring boards about the car issues. I doubt that more finance is going to be the answer to your debt problems.

Definitely do a joint soa for us. That doesn't mean that it would be what you send to creditors.

My initial thought would be to get one of these completed and you would lean heavily on it in due course.

https://www.nationaldebtline.org/documents/debt_and_mental_health_evidence_form_DMHEF_pack_with_instructions_NDL_EW.pdf

Factsheet here

https://www.nationaldebtline.org/fact-sheet-library/debt-and-mental-health-ew/

Debtfreequeen

I just wanted to leave an update on our situation in case this helps anyone else. We went down the route of defaulting on the loans so as to be able to start a DMP. We then decided to try and have the debts written off due to my husbands Mental Health. This was very simple and sent off the debt and mental health evidence forms along with a covering letter. The largest loan was then written off. We then was asked to send more information off for the smaller loan and this has now vanished from our credit file! We haven’t had an official letter yet and we will follow up on this one but it’s looking hopeful. I can’t describe the relief we both feel! I never thought that this would be the result we would get. I would urge anyone for the cost of a stamp and a form filled in by your doctor just give it a try if you have suffered with a mental health condition that contributed to your debt. Yes his credit is ruined but we don’t want anymore credit.