Getting on track

EssexHebridean

Until you have an emergency fund built up, hold on to one card, but with that one, you need to do the following. Pick a decent sized freezable tub, half fill it with water and freeze it. Once frozen, pop the card into the container, fill the rest of the way with water, and freeze again. That way in an absolute emergency you have a card to get you out of trouble, but only once it has defrosted. This removes the temptation to “just pop X, Y or Z on the card” while also meaning that if the car gets a puncture of the toilet springs a leak, you can sort things out. 

Once the DDs have stopped you will be using the gap between stopping payments and the defaults being given to save any surplus  for an EF and perhaps also a “fighting fund” for full and finals down the line. That is ALL you should be doing with surplus though - no being tempted to buy things “while you can!” 

enthusiasticsaver

I will ask for the thread to be moved to the diaries section for you. 

LeedsOnTheUp

EssexHebridean said:

Until you have an emergency fund built up, hold on to one card, but with that one, you need to do the following. Pick a decent sized freezable tub, half fill it with water and freeze it. Once frozen, pop the card into the container, fill the rest of the way with water, and freeze again. That way in an absolute emergency you have a card to get you out of trouble, but only once it has defrosted. This removes the temptation to “just pop X, Y or Z on the card” while also meaning that if the car gets a puncture of the toilet springs a leak, you can sort things out. 

Once the DDs have stopped you will be using the gap between stopping payments and the defaults being given to save any surplus  for an EF and perhaps also a “fighting fund” for full and finals down the line. That is ALL you should be doing with surplus though - no being tempted to buy things “while you can!” 

Fantastic advice. I'm assuming they won't block the use of the cards while I'm waiting for them to default?

LeedsOnTheUp

Well I cancelled the direct debits and today I'm going to get some stamps and start writing letters to each creditor saying I'm currently unable to pay and won't be in a position to for 6 months due to my circumstances. I will request they only contact me by writing and that I am classed as a vulnerable person due to my mental health conditions. Should I make them aware that I am going to go on a dmp at this point? Will that slow down proceedings with the defaults?

Im feeling very conflicted at this point. I know this is the right thing to do for me and I know the reasons I'm doing it but it felt very difficult to cancel the direct debits as I've never missed a payment. I'm sure it will get easier with the support of the brilliant people on this forum.

enthusiasticsaver

No doubt it is daunting but they are companies and see this all the time. Having just one payment and no interest will help the debt come down. Are you self managing or have you spoken to stepchange? If your soa shows you can meet minimums they may be reluctant to help. 

I wouldn’t tell the companies anything yet about a DMP. Also don’t rush to set up a DMP until you have a decent emergency fund and the defaults have happened. Your struggles with your mental health should be emphasised. 

enthusiasticsaver

Thinking about it more they may be tempted to offer you breathing space due to your mental health which will slow down defaults so maybe telling them you will do a DMP may hasten the defaults. Maybe post on the DMP thread as they have more experience than me. 

EssexHebridean

LeedsOnTheUp said:

EssexHebridean said:

Until you have an emergency fund built up, hold on to one card, but with that one, you need to do the following. Pick a decent sized freezable tub, half fill it with water and freeze it. Once frozen, pop the card into the container, fill the rest of the way with water, and freeze again. That way in an absolute emergency you have a card to get you out of trouble, but only once it has defrosted. This removes the temptation to “just pop X, Y or Z on the card” while also meaning that if the car gets a puncture of the toilet springs a leak, you can sort things out. 

Once the DDs have stopped you will be using the gap between stopping payments and the defaults being given to save any surplus  for an EF and perhaps also a “fighting fund” for full and finals down the line. That is ALL you should be doing with surplus though - no being tempted to buy things “while you can!” 

Fantastic advice. I'm assuming they won't block the use of the cards while I'm waiting for them to default?

They certainly could do. Hopefully though you will be able to build up a decent EF before anything happens, and will not face anything occurring that means you need to use the defrosted card! 

(I should also add that the literal card-freeze is fairly standard advice for here - it’s been being suggested as a good way of reducing use of credit for longer than I’ve been on here! ) 

LeedsOnTheUp

enthusiasticsaver said:

No doubt it is daunting but they are companies and see this all the time. Having just one payment and no interest will help the debt come down. Are you self managing or have you spoken to stepchange? If your soa shows you can meet minimums they may be reluctant to help. 

I wouldn’t tell the companies anything yet about a DMP. Also don’t rush to set up a DMP until you have a decent emergency fund and the defaults have happened. Your struggles with your mental health should be emphasised. 

I think I'm going to self manage now. I have been looking into it and it doesn't seem too difficult, and I will contact stepchange only if it starts to become too much. I prefer the idea of being completely in control and learning to manage the finances myself.

Are we basically saying get in touch to say I can't afford payments for at least 6 months and that I have poor mental health? I think if they default in 6 months I can save around 3k for an emergency fund which should be enough for even extreme circumstances. I could possibly save even more with overtime.

I have to say even though it is very daunting, it also feels very liberating to be getting in control of my finances and not bouncing around to try and juggle credit. I can't wait to kiss it goodbye for the last time.

sourcrates

@LeedsOnTheUp

Lets take a moment here, and look at what you want to achieve.

The debt collection process is the same whether you talk to your creditors or not, telling them you can`t afford payments, have mental health issues, or apply for breathing space, all delay the account defaulting.

Just think about what defaulting actually means, in basic terms it means your agreement is terminated, the financial relationship between you has ended, and we no longer wish to work together, in most cases accounts are sold on pretty quickly, as the majority of lenders do not want to be involved with collecting bad debts.

So in the majority of cases, the companies that currently own your debts, won`t do for much longer, so why say anything at all to disrupt that process?

You are but an account number to them, nothing more, a good straightforward way to deal with this is to stop all payments, ignore the creditors completely, until you are advised the accounts have either defaulted or been sold, and then start your self management.

It gives you time to save up an emergency/settlement fund, time to get your head around things, and learn as much as you can about the process your undertaking, and you will see that absolutely in by far the majority of cases, if you stop paying, the world does not end, and the sun will rise in the morning.

A lot of folk use this method, and do settlement deals further down the line, to end the plan quicker.

LeedsOnTheUp

sourcrates said:

@LeedsOnTheUp

Lets take a moment here, and look at what you want to achieve.

The debt collection process is the same whether you talk to your creditors or not, telling them you can`t afford payments, have mental health issues, or apply for breathing space, all delay the account defaulting.

Just think about what defaulting actually means, in basic terms it means your agreement is terminated, the financial relationship between you has ended, and we no longer wish to work together, in most cases accounts are sold on pretty quickly, as the majority of lenders do not want to be involved with collecting bad debts.

So in the majority of cases, the companies that currently own your debts, won`t do for much longer, so why say anything at all to disrupt that process?

You are but an account number to them, nothing more, a good straightforward way to deal with this is to stop all payments, ignore the creditors completely, until you are advised the accounts have either defaulted or been sold, and then start your self management.

It gives you time to save up an emergency/settlement fund, time to get your head around things, and learn as much as you can about the process your undertaking, and you will see that absolutely in by far the majority of cases, if you stop paying, the world does not end, and the sun will rise in the morning.

A lot of folk use this method, and do settlement deals further down the line, to end the plan quicker.

OK, this seems very reasonable. Would i still be able to write to them telling them to only contact me in writing or would this also delay? This would certainly help me with the mental health side of things.

And thanks for replying to me here. I have taken many screenshot of advice you have given on the mutual support thread as its all absolutely cracking advice.