Looking for Advice regarding DMP

SJMAST1

Hello,

I'm currently in a complete mess regarding loan & credit card debt first time ever I'm now at a complete loose end.
To cut a long story short I have been robbing peter to pay Paul of late, basically paying the minimum payments off, off more borrowed money to get me through the week. 2 years ago I want self employed but unfortunately got ill not life threatening or anything but ended up getting insomnia all sorts and only get around 2 hours maybe 3 hrs of a night and basically a walking zombie the next day.

Have never missed a payment but now all my credit cards have come to end of their 0% deals and completely jumped to a level I can no way afford.

My total debt is around 28k with 20k of that as credit card debt and the 9k as a loan.

Virgin 9k
Zopa loan 9k 
Paypal 1.3k
Overdraft 1.5k
M&S 3k
Santander 3k 
Amex 1.5k 

My income is basically rent from the kids (adults) who pay £400 a month between them that all went on minimum payments, my wife pay the rent, gas etc in a full time job yet she's 35k in debt herself so it's been proper tough.
My shopping etc is all being paid by credit cards, fuel, clothes, I don't smoke, don't drink either.

I wasn't going to write on here as I feel embarrassed and ashamed but feel this is the right time.

I have been looking in to a DMP whether that take years to pay back I'm happy with that as it was me who got myself in to this mess in the first place.

I don't own my house, can't go BR due to my other halfs job 

Any advice would me much appreciated Thank you

stu12345_2

nothing to be ashamed off, I am on a dmp that I run myself, through help from advice I got here, the ambassadors give the best advice.

 normally the first thing is to do a sao , a statement of affairs where you list income and bills and debts, your share of bills based on combined income and hence bills too.
your % that you contribute in the household., eg if you earn 10% if the house hold income, the you get the bills listed for 10% of their totals, then you can see if you have any spare money left over,if any

cos when a couple have 2 different earnings and it's not equal, then you can't list bills split in half you see., easy if you both earn the same.
someone will post a link for you.

I see you said you get rent money from your children,  they are adults? who live in the house ?this will be a casual arrangement I assume, eg no contract to pay you and only you, no official  tenancy agreement, where  the money from them should go towards the running of the whole household.

do you claim job seekers allowance or any illness benefits and why can't you go bankrupt, if it came to that, as it's based on your circumstances eg won't effect your job if you have no job

I asked about benefits , cos if you can remain on them for a year and not being pressured to get full-time job, and that's your only income, you could  stop the kids rent money if it's unofficial, you could get a dro  debt relief order  as you basically need to have less than £75 a month left over or less, and wipe all your debts clear without bankruptcy 

sourcrates

Looks on the face of it like debt management might be the way forward.

Stop paying debts you cannot afford is the message you have to tell yourself, credit cards and loans are both non urgent, non priority debts, so stop prioritising payment to them.

Work out a budget you can live with, and make sure you can save something into an emergency/settlement fund as well, then decide how you want to work this, either by using a debt charity such as stepchange, or by going it alone and doing the job yourself, self management is much more flexible to be be fair.

No shame or embarrassment, debt management is a well trodden route to becoming debt free, these things happen in life, yet the solution is easy, get it set up, and carry on with your life, it should not be a big drama.

A DMP allows you to repay what you owe, at a reduced monthly rate, spread over a longer period of time, and further down the line it should be possible to use settlement offers to reduce that time even more.

SJMAST1

Really appreciate your replies.

The scary thing I'm not looking forward to is the constant phone calls & letters by what I've read & is best to hang tight don't reply until the defaults hit your credit report, it's then you contact the lender or whoever the debt has been sold on to, to then negotiate hopefully reduced amount based on what you can generally afford & it's then the interest is frozen as you've been defaulted.

Is this correct if not apologies

Thank you 

RAS

Roughly right, but you can tell the creditors only to write to you. Before you stop paying, it is essential that you set up a new basic bank account with a bank with which you have no debt and get all income transferred to that. And disentangle any joint accounts.

Meantime you use the money you were paying to save into an emergency fund.

Secondly, once the debt defaults, you set up SO for affordable payments and keep to those for a couple of years. Adjust if your income or expenditure changes. 

Once that's been going on a couple of years, you will start to get full and final offers. 

Rob5342

SJMAST1 said:

Really appreciate your replies.

The scary thing I'm not looking forward to is the constant phone calls & letters by what I've read & is best to hang tight don't reply until the defaults hit your credit report, it's then you contact the lender or whoever the debt has been sold on to, to then negotiate hopefully reduced amount based on what you can generally afford & it's then the interest is frozen as you've been defaulted.

Is this correct if not apologies

Thank you 

It's not too bad really, I didn't get that many, and it's easy to block the number or use something like call screening on an Android phone. There's nothing to negotiate, you just tell them what you'll be paying and set up a standing order for that amount.

SJMAST1

The knowledge of people on this site is unbelievable. Thank you for the replies I really appreciate it 

sourcrates

Collection activity varies wildly, it depends on the creditor, some send the odd letter or email, others may try and ring every other day, they all have their own set patterns, and most of it is computer generated.

Nothing to worry about.

SJMAST1

Apologies just another quick question.

Obviously with my debts around 28k I've been up most of the night regarding the process of the DMP and how much creditors will want from me once my debts go into to default.

As my income is more or less non existent and will probably only have around £200 free at the end of every month, how much will the creditors expect me to pay them. I mean with 7 accounts they're not going to accept £30 a month off me that's what worries me. 

Virgin for instance or the debt company for a 9k debt  they'll tell me to take a running jump surely if I said I can only pay then £25-£30.

The worry this put you through is horrible. Sorry to be a pain any advice would be great Thank you,

Grumpelstiltskin

It doesn't matter what creditors want you pay what you can afford.

If you do a self managed DMP you are 100% in control of what you pay.

Martico

No need at all to apologise for questions! It's a daunting prospect. Luckily many people here have walked in your shoes before and are happy to advise. 
The creditors can't demand something you haven't got. And as the loan is unsecured they can't go after any assets.