DMP in process and breathing space

Jacksonc2114

I’ve now taken the steps for a DMP with step change and I’ve set up a new bank ac and  cancelled all my direct debits.  Ive got my joint account still to pay bills from with my partner and I’ve  been told the offset rule shouldn’t apply to this account as all debts are sole debts nothing joint …

ive  applied for breathing space but just a bit confused as to what this is and the benefits of this and payments to creditors during this period. 

Also A couple of question .. 

1) I’m not in arrears yet with debts ( only 1 of them is two months in arrears now ) I’ve made full payments each month but then use my credit cards to survive the rest of the month as my payments are over £1000…worried they will see this as a bad thing…  I’ve read I need to keep making payments whilst in breathing space but then see in these forums to stop making payments and save up as much as I can whilst waiting for the DMP to be in place .. am I right to stop paying everything and save that up or should I make token payments ?  I know some say wait a few months but that terrifies me … I’m so worried about action or court action or my house being impacted as I have a mortgage with my partner and my child lives at home … partner doesn’t know yet I need tk tell him but I’m hoping to get this all in place and then show him it’s ok and how I’m trying to solve it 

2) should I send a letter and tell my creditors  I’ve applied for breathing space and working with step change .. or wait till they ring ? 

3) I’m hoping for a new job in the next couple of months I’ve been offered it just waiting for a start date as I have 3 months notice at my current job .. this will offer about £200 - £250 a month extra income .. is it good to pay this as soon as I get the pay rise or save it up for a few months then try and go alone on the DMP and use try this built up credit to het  some final offers on the smaller debts 

Context ; I’ve got £35k debt with current payment suggested of £300 a month take 9yr 10 month .. which could go up to £500 a month from July time which should see that be done in less than 6yr… maybe some money due from inheritance in the next year or two (£5k ish ) so more help 

I know doing it yourself is seen as a good option but I’m just wanting the quickest way to get it set up get my new job started and then start to take ownership … the stress of the debt it bad enough as I’m not sleeping well and on edge for the fear of losing everything and the dmp not being accepted and the credit is pushing court action :-( tell me I’m definitely overthinking 

Rob5342

Have a look at the following thread. You should really stop paying everything and wait for them to default before starting the DMP. I wouldn't bother with breathing space as that will.probably just slow down the whole process. Legal action can't be taken until debts default and if you are making monthly payments it's unlikely it will be taken. 

There's no question of whether the dmp will be accepted. You pay what you can afford and the creditors just have to deal with it..It's completely up to you how you manage it, paying a reduced amount and saving for settlement offers is a good approach as you can clear the debts for a lot less.

At some point it would be a good idea to make CCA requests to see if the debts are enforceable or not. That's probably best left until they have been with DCAs for a while as they will be less likely to be able to produce them. You might also consider making affordability complaints to speed the plan up.

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps#latest

I started off with £42k of debt in 2021 which seemed.like.a long road. I got rid of £13k.of that with affordability complaints and £16k of them turned out to be unenforceable. 2.5 years later I've paid off £9k of the remaining £11k which I hope to.clewr.with.a settlement offer soon.

Jacksonc2114

Thanks I’ll have a read into that … it’s a minefield of information .. I just want to pay back as much as I can and protect my home 

Rob5342

As long as you are making some payments there is unlikely to be any legal action. Even if there was it shouldn't come anywhere close to your home being at risk (Sourcrates will probably expand on that). It would be better to pay less towards the debts and save more for settlement offers so you can clear everything for less.

It can seem very daunting and worrying at first, but for most people it goes very smoothly and they get themselves back on track.

fatbelly

Advice so far is perfect. There is no danger to your home. I think Stepchange like to put everyone in Breathing Space because they lobbied for it and want to show that it's being used.

In reality it's unnecessary in 99.9% of cases- just wastes eveyone's time and slows the process down.

You don't need to contact the creditors yourself. Stepchange will do that

Ps. You're definitely overthinking.

sourcrates

In your case, breathing space is a waste of time, no court action will happen, original creditors don`t do that, in the vast majority of cases accounts just get sent to debt collectors, or are sold on.

I agree there is a mountain of information out there on what the best course of action may be, so I`ll just try and cover some of the points you have raised.

All lenders use a computer controlled automated system to run there businesses, this tells them who pays on time or who does not, who misses payments etc etc, if you don`t pay, the system sends you computer generated letters, calls, texts whatever it may be, these processes are programmed to run for a certain length of time, usually a 3 month cycle, or when you get up to 6 months in arrears.

After this point an account can be defaulted, doesn't always happen straight away thought, also the account then gets sent to "collections" a dedicated team who chase arrears, it can stay with them another 3/6 months, the next event will either see the debt passed to an external debt collector to chase, or the account may be sold.

The point I`m trying to make is nothing happens quickly, the debt collection process has many stages, and takes a very long time to run through the standard series of collection letters etc, you have plenty of time to make choices.

Any legal action is usually only taken by debt purchasing companies, much further down the line, and only then if you continue to ignore them.

I agree you are overthinking this, debt management is a universally accepted route out of debt, and once implemented life continues as normal. 

Jacksonc2114

Thank you :-) 
I’ve told step change to start it but not completed the process so I’ll stop paying debts as of March payments build that up then get the DMP in place and hopefully get less stress :-) I will look at the diy route once I’m settled and hopefully get my new job started 

tigergambit

Jacksonc2114 said:

Thank you :-) 
I’ve told step change to start it but not completed the process so I’ll stop paying debts as of March payments build that up then get the DMP in place and hopefully get less stress :-) I will look at the diy route once I’m settled and hopefully get my new job started 

Have to say that I'd be inclined not to mention the new job to Stepchange until renewal time. Stick the excess into your emergency/f&f fund.

RAS

Can we combine the two threads?