Credit card debts

Looking4silverlining

stu12345_2 said:

 a dmp is so informal. all you need to do is work out your income, then all your expenses. then work out what you got left for creditors 

it isn't a legal or formal thing. it's basically a deal with creditors so you repay something to them , even if it takes years 

what you bought on credit card makes no difference. I bought plane tickets, rent, clothes, food , car repairs on my cards
 I do dmp and defaults and paying debts off slowly.

I've avoided a dro, iva or bankruptcy 

Hi and thanks for the answer.
May I ask why you avoided a dro, iva or bankruptcy? Surely they all are a bad credit score for 6 years?

Looking4silverlining

Hi gang. Can I ask you all what the difference is between a debt management plan and the others (IVA DRO etc) that write off most of the debt? I mean surely they all screw up the credit rating so why go for the DMP when I can have most it written off? Is there some benefit to this method compared to the others?

stu12345_2

I dont own a home so don't need an IVa, my contributions to my creditors are more than £75 a month, hence I don't need a dro. I'm not needing bankruptcy cos I can manage a dmp.
 bankruptcy is last resort when you owe a lot of money. no assets,and you will be unlikely to ever pay it off in a reasonable time via a dmp.

 a dmp is so informal in that no regulator decides what you can spend on clothes, food, petrol, leisure, etc.
 unlike a dro, iva, bankruptcy which has rules.

bankruptcy can last 3 years, not the one yr as expected. and if you do a dmp correctly you can still write off  say 50% of your debts via full and final settlements offers down the line.

and if you do CCA requests, you may find some of your debts are actually unenforceable, which means you can never be taken to court, you just let them ride out 6 years of non paying and if no agreement has been found ,they being time barred.

thinking of your credit score should be the last thing on your thoughts. getting a solution to paying off the debts is top priority.

can you look for a regular job that pays more than what you earn self employed, eg 40 hrs at say £13 an hour?
 

RAS

IVAs, BR and DRO are all forms of insolvency. If asked you have to declare them for ever.

IVA's have very high fees and if your income increases or you get a windfall in the 6 year period, you can end up paying the whole of your debt plus £6-9k in fees. They are heavily mis-sold by companies that get referral fees.

BR at least lasts few years and is a lot cheaper.

DROs are great if you don't have much debt and have a very low income, although at least one OP here has to let theirs fail now as they have additional money.

I'd add that the budgets for IVAs aren't generous and people really struggle with living on them.

DMP are more flexible and as long as you ensure the debts default before your start paying, last the same period. You can also adjust the amount you pay to match your financial needs. After several years, you'll usually get offered discounts to settle for a lump sum. 

stu12345_2

dro are really for those with no car , old car, no house and unlikely to work full-time for at least a year.

 yes I did consider one, but I would have to resign from my job, become an active job seeker,  and all the hoops the DWP would put me through.eg look for a job that's is 35 hrs a week and it's highly unlikely I would be without a job for a year.
 folk that get dros tend to be on some sort of long-term disability benefit etc, so their benefit is fixed for at least a year with no fear of going over the spare £75 a month limit.
 if you do go over, it's the end of your dro and you are back to square one again.

17 years ago I had the Scottish version of an IVA, a protected trust deed, I owed £4000 , from a messy divorce, half went on fees, I was referred by the cccs who became step change!

I had so little money for leisure, £10 a week, it got me depressed and ended a new relationship  basically when I got a pay rise I had to pay it to my trust deed.

when you see the bill in the fees£300 an hour for the head insolvency practitioner, solicitor etc, you don't think , you sign on the dotted line. I was younger and not wise

JCS1

stu12345_2 said:

I dont own a home so don't need an IVa, my contributions to my creditors are more than £75 a month, hence I don't need a dro. I'm not needing bankruptcy cos I can manage a dmp.
 bankruptcy is last resort when you owe a lot of money. no assets,and you will be unlikely to ever pay it off in a reasonable time via a dmp.

 a dmp is so informal in that no regulator decides what you can spend on clothes, food, petrol, leisure, etc.
 unlike a dro, iva, bankruptcy which has rules.

bankruptcy can last 3 years, not the one yr as expected. and if you do a dmp correctly you can still write off  say 50% of your debts via full and final settlements offers down the line.

and if you do CCA requests, you may find some of your debts are actually unenforceable, which means you can never be taken to court, you just let them ride out 6 years of non paying and if no agreement has been found ,they being time barred.

thinking of your credit score should be the last thing on your thoughts. getting a solution to paying off the debts is top priority.

can you look for a regular job that pays more than what you earn self employed, eg 40 hrs at say £13 an hour?
 

Just to clarify, bankruptcy usually lasts for a year. However an income payment agreement lasts for 3 years.

tigergambit

stu12345_2 said:

ccan you look for a regular job that pays more than what you earn self employed, eg 40 hrs at say £13 an hour?
 

@Looking4silverlining Is this not possible? Perhaps a driving or security job?

stu12345_2

I think you should forget about dro, iva, bankruptcy in your head at moment.
I can sense you have thoughts buzzing about  your mind grasping at the idea of write those debts off, but how???

yes, there are solutions, but they tend to be applied after all other avenues have been exhausted.

a highlighted story you should Google is Katie price, ex model and you wonder how she drove a big flashy range rover on an IVA. that car probably  gone now, she owed over £1 million  and her iva was £4000 a month.

she didn't keep up payments and was in court to be made bankrupt, her home is worth over £2 million and would be sold.

you should forget about self employed.
do you hardest to get a regular job. you may then find you have £400 plus  left over  a month to pay towards creditors.

then you could clear your dmp in 5 years, not 17  and probably even  faster( maybe even 3 years)( as you make settlement offers at a reduced price at maybe halfway in your dmp).

and when you start making monthly amounts to creditors don't give them every last penny. do a financial statement that maximises your overheads, eg  put petrol, van repairs, clothes, emergency fund,  food, at the max, but don't actually spend that.

some suggest pay 70% of your true overheads. the creditors won't know any difference. they aren't allowed to set rules or limits on an informal demo. but you can

( I don't give my creditors all my available money to them, I give about 70%).

eg put down you spend £250 on food where you could probably get it down to £200, but that allows you to save that £50 in a fund for big emergencies or your settlement offers. do the same for all expenses that fluctuate. eg clothes,  petrol.

cos that allows you to build a savings fund that you can put towards full and final settlements down the road l

Looking4silverlining

stu12345_2 said:

I dont own a home so don't need an IVa, my contributions to my creditors are more than £75 a month, hence I don't need a dro. I'm not needing bankruptcy cos I can manage a dmp.
 bankruptcy is last resort when you owe a lot of money. no assets,and you will be unlikely to ever pay it off in a reasonable time via a dmp.

 a dmp is so informal in that no regulator decides what you can spend on clothes, food, petrol, leisure, etc.
 unlike a dro, iva, bankruptcy which has rules.

bankruptcy can last 3 years, not the one yr as expected. and if you do a dmp correctly you can still write off  say 50% of your debts via full and final settlements offers down the line.

and if you do CCA requests, you may find some of your debts are actually unenforceable, which means you can never be taken to court, you just let them ride out 6 years of non paying and if no agreement has been found ,they being time barred.

thinking of your credit score should be the last thing on your thoughts. getting a solution to paying off the debts is top priority.

can you look for a regular job that pays more than what you earn self employed, eg 40 hrs at say £13 an hour?
 

Ah I see, yes I am starting to understand now. 
But surely if I am doing a DMP and making small payments I can't just ride them out for 6 years because I have to stop making payment to be able to do this don't I?

Looking4silverlining

Thanks to all of you, I am starting to understand how this all works now.
Yes I am looking into the possibility of getting a full time job but am also trying to set up a new small business which has been getting a lot of very positive feedback and someone has even offered me 40 hours a week paid that should be ongoing. Things might be looking up!
I have been told by a friend to offer token payments to the cards but keep paying one off and using it. Then offer them final settlements etc at some point. But I don't think she has defaulted on the cards. Is thes possible? I mean is there a way that I would be able to keep a bank account for use?