What steps should I take?

JadedAngel88

This might not help but just thought I'd mention as it's not mentioned enough. 

Your water bill, I don't know who your water provider is but I'm with Anglian water and pay £5 per month, they should have a special tariff for low income/benefits. It's not usually advertised by the water companies but wouldn't hurt for you to ask yours. 

Also the internet services have social tariffs that cost around the £15 to £20. Although not far from what you pay at the moment, also some have SIM plans ( that might not be true, don't know if I've dreamt that or having a brain fart moment). But might be something to look at when your current phone contract ends. 

stevieyork

JadedAngel88 said:

This might not help but just thought I'd mention as it's not mentioned enough. 

Your water bill, I don't know who your water provider is but I'm with Anglian water and pay £5 per month, they should have a special tariff for low income/benefits. It's not usually advertised by the water companies but wouldn't hurt for you to ask yours. 

Also the internet services have social tariffs that cost around the £15 to £20. Although not far from what you pay at the moment, also some have SIM plans ( that might not be true, don't know if I've dreamt that or having a brain fart moment). But might be something to look at when your current phone contract ends. 

Thanks, I will look into those social tarrifs. I wasn't aware of them.

fatbelly said:

In your budget, just divide any annual expense by 12. Everything is done on a monthly basis to check you meet the surplus income criterion.

You can have assets, including cash of up to £2000 under the scheme so if your bank balance goes up and down, no problem

There are a few professions where a DRO could be an issue. The record stays on your credit file for 6 years, though you will be through it in one year.

Downsides are few. Debts not listed won't be included. Homeowners can't do them. Some debts like child maintenance, student loans and tv license arrears can't be included.

Thank you, that clarifies a few things.

Here is where I'm at/what I'm thinking. I would appreciate if anyone had any criticisms, corrections or strong words of advice and any answers to the questions:

At the moment, my big worry is the possibility of being evicted (landlord has mentioned selling a few times but hasn't mentioned it in recent months). For that reason, I'm keen to build up some sort of safety net/emergency funds (and if really possible, at least a month's rent or even a few months). I haven't got a penny at the moment, so if I was given notice, I really would be in a messy situation.

So the plan that I've formulated is:

1. Stop all payments on my debts. Save every penny and wait for default markers to be allocated (if at all). Side question: how long is reasonable to wait before contacting the creditors and letting them know what is going on or before moving on to a DMP? Also, is there a particular credit report service that is recommended to see what markers are on the debts?

2. If/when the default markers have been added, then I will go to StepChange and seek to enter a DMP. At this point, I should hopefully have an emergency fund so I don't have to stress about serious things like a roof over my head. Hopefully, I can then make monthly payments and maybe even get some reasonable offers of settlement to reduce the load quicker (and I'll have been able to save up to pay these).

3. If a creditor or creditors are, for whatever reason, not happy with the DMP and try to pursue a CCJ, then I might at that point seek a DRO and just be done with it all (the earliest I can seek a DRO is June/July anyway). I'm not sure why a creditor would do this as they'll be pursuing a CCJ for nothing. Side question: is there a difference in terms of obtaining future credit or employment prospects or renting with regards to having a CCJ or having a DRO? Is one worse than the other?

Another question I have is: Some of my debts are all with one bank (NatWest - two credit cards, three loans and possibly entering into the overdraft soon). Would they be considered one debt or six individual debts with regards to a DMP and/or CCJ action? In other words, if they were going to pursue a CCJ (and it's the biggest debt in total), would they pursue them individually or all at once? They would probably be the least happy with the not very large DMP payment too. So, I'm dreading all sorts of things that I've read time and time again not to worry about at this stage (CCJs, bailiffs, etc.) but I'd like to at least have as much information as possible before I dive right in.

stu12345_2

imo and personal experience , the bank debt is individual debts and will probably be end up in a debt collection company for the bank. 
if you agree to a dmp with the collection company, the amount to pay each bank debt will be based on what we're the correct regular payments.

eg credit card debt will be paid back the slowest cos you were only obliged to pay a small minimum, but loans will be bigger as they had a fixed repayment term during the loan agreement period.

a creditor would pursue a ccj cos on a dmp you don't have to show legal proof of your outgoings etc and a ccj would force you via a court to legally show your outgoings and hence prove you are totally skint.
 a dro again is a legal form of insolvency, so  all facts and figures you declare are legal and can't be falsified. again to prove you are skint and can't afford to repay creditors.

getting settlement offers can take a while, I've been on a dmp for over 2 yrs and some creditors are still offering no discount.

my debts are around £10000 and it is impossible to save up that kind of money. si I will have to wait for some kind of huge windfall from somewhere, wherever that may be 

dro is good if your benefits are mega low eg a job seeker , and is virtually guaranteed a dro. but I'm not clued up on disability rstes, cos your monthly benefit is kind of highish. thus you do have a bit off excess above the £75 limit.

normally benefits don't give you any excess at end of month, eg job seeker on universal credit with the housing element included.

imo a dro is more serious than a ccj. cos you can still be on a dmp whilst paying back other creditors even if one of them does a ccj.
but a dro affects all creditors, it is insolvency  after all.and again is a legal document, that has all sorts of ramifications if falsified or not kept up to date with facts and figures whilst on one with the insolvency official.

the worst thing that could happen in a ccj is a order to collect the debt via attachment of earnings, where as a dro falsified  or not keeping up to date with any changes during it is breaking insolvency laws

after all this law eg the dro that lets someone write off up to £50000 is a serious thing and hence must be adhered to fully correctly

 imo, a dro is like chucking in the towel and saying I'm super skint and a dmp will take far too many years to pay back creditors.

compared to a dmp which is just an informal agreement to repay creditors slowly, no law is used at all. eg no proof of bills, benefits need to be produced at all, it's just whatever you tell the creditors

stevieyork

stu12345_2 said:

imo and personal experience , the bank debt is individual debts and will probably be end up in a debt collection company for the bank. 
if you agree to a dmp with the collection company, the amount to pay each bank debt will be based on what we're the correct regular payments.

eg credit card debt will be paid back the slowest cos you were only obliged to pay a small minimum, but loans will be bigger as they had a fixed repayment term during the loan agreement period.

a creditor would pursue a ccj cos on a dmp you don't have to show legal proof of your outgoings etc and a ccj would force you via a court to legally show your outgoings and hence prove you are totally skint.
 a dro again is a legal form of insolvency, so  all facts and figures you declare are legal and can't be falsified. again to prove you are skint and can't afford to repay creditors.

getting settlement offers can take a while, I've been on a dmp for over 2 yrs and some creditors are still offering no discount.

my debts are around £10000 and it is impossible to save up that kind of money. si I will have to wait for some kind of huge windfall from somewhere, wherever that may be 

dro is good if your benefits are mega low eg a job seeker , and is virtually guaranteed a dro. but I'm not clued up on disability rstes, cos your monthly benefit is kind of highish. thus you do have a bit off excess above the £75 limit.

normally benefits don't give you any excess at end of month, eg job seeker on universal credit with the housing element included.

imo a dro is more serious than a ccj. cos you can still be on a dmp whilst paying back other creditors even if one of them does a ccj.
but a dro affects all creditors, it is insolvency  after all.and again is a legal document, that has all sorts of ramifications if falsified or not kept up to date with facts and figures whilst on one with the insolvency official.

the worst thing that could happen in a ccj is a order to collect the debt via attachment of earnings, where as a dro falsified  or not keeping up to date with any changes during it is breaking insolvency laws

after all this law eg the dro that lets someone write off up to £50000 is a serious thing and hence must be adhered to fully correctly

 imo, a dro is like chucking in the towel and saying I'm super skint and a dmp will take far too many years to pay back creditors.

compared to a dmp which is just an informal agreement to repay creditors slowly, no law is used at all. eg no proof of bills, benefits need to be produced at all, it's just whatever you tell the creditors

Hello Stu, thanks for your thoughts on this. Am I right in thinking that if, for example, a CCJ is awarded at some point, then it "resets" the clock on my credit report? In other words: a defaulted debt would fall off after 6 years, but if a CCJ is pursued say in January 2025, then it's another 6 years starting from the date the CCJ is awarded?

I'm hoping to avoid CCJs. Hopefully, all the debts will default within a few months and I can go on to a DMP and pay anything spare that I can (and hopefully increase it in time).

Grumpelstiltskin

Don't panic about CCJs they don't just appear out of thin air.

If a creditor is thinking about applying for one they have by law to send you a letter by snail mail advising you they are thinking of applying for one.

You should always ignore any threats sent by E Mail or text, they are only empty threats but always open any snail mail letters to check what they say.

If you do receive a letter before action come back for advice.

fatbelly

What I take from your post is that you should not be banking where you have debts, so you need a new account with someone else and wave goodbye to Nat West

Apart from that, your plan looks good. I think eventually you will need a DRO unless your income increases dramatically

RAS

@stevieyork

Think you need to be realistic about timetables, but also that you have a couple of things that need doing urgently. 

You need to open a new basic bank account as soon as possible because of your money is currently going into Natwest with whom you have debts. Try Co-op, Monzo or Starling. Do not use the switching service, as that switches the DDs for your creditors. Transfer your income streams and then manually transfer CT, utilities etc. 

Meantime cancel all DDs not associated with NatWest, and those related to them as soon as your income is moved.

I'd also suggest you either have separate pots for annual costs and emergency funds or even a separate account for the emergency fund. What's the best open access savings account that permits a few withdrawals a year?

Beyond that, things are going to take time. Technically you could get defaults after 3 months but it's more likely to be 6-18 months, and some may take longer. So you need to put all your spare cash into the emergency/future tenancy fund. Creditors can't issue court proceedings until they have issued the default, so court letters are months, years away if they ever happen.

If you want to avoid hassle, remember there is no person dialling you, your creditors just have a computer programme auto-dialling and texting you. Invest in a few stamps and tell them you want all communication in writing. Put letters aside and go through them once a week.

You might want to make token payments to any early defaulters to keep them sweet, just pointing out your only income is benefits. Don't set up a full blown DMP with Stepchange until the defaults come in, or they won't and the AP markers do longer term damage to your credit record. If creditors refuse payments because you are on benefits, you might want to ask for debt write-offs on ill-health grounds?

Once you've moved your income and started saving, spend the next year checking out the career implications of a DRO, and start looking pro-actively for new accommodation. You've not mentioned your specific disability or your age, but are there local providers for over 50s accommodation or does the organisation specialising in your disability know of targeted accommodation?

In a year's time you should have a healthy emergency fund to allow you to move, a stronger understanding of your health and financial situation and it'll be easier to decide what to do. If you go for a DRO, you might want to move first, then file?

Hope it goes well. Come back if you want further advice or just start a diary for on-going support.

stevieyork

Grumpelstiltskin said:

Don't panic about CCJs they don't just appear out of thin air.

If a creditor is thinking about applying for one they have by law to send you a letter by snail mail advising you they are thinking of applying for one.

You should always ignore any threats sent by E Mail or text, they are only empty threats but always open any snail mail letters to check what they say.

If you do receive a letter before action come back for advice.

fatbelly said:

What I take from your post is that you should not be banking where you have debts, so you need a new account with someone else and wave goodbye to Nat West

Apart from that, your plan looks good. I think eventually you will need a DRO unless your income increases dramatically

RAS said:

@stevieyork

Think you need to be realistic about timetables, but also that you have a couple of things that need doing urgently. 

You need to open a new basic bank account as soon as possible because of your money is currently going into Natwest with whom you have debts. Try Co-op, Monzo or Starling. Do not use the switching service, as that switches the DDs for your creditors. Transfer your income streams and then manually transfer CT, utilities etc. 

Meantime cancel all DDs not associated with NatWest, and those related to them as soon as your income is moved.

I'd also suggest you either have separate pots for annual costs and emergency funds or even a separate account for the emergency fund. What's the best open access savings account that permits a few withdrawals a year?

Beyond that, things are going to take time. Technically you could get defaults after 3 months but it's more likely to be 6-18 months, and some may take longer. So you need to put all your spare cash into the emergency/future tenancy fund. Creditors can't issue court proceedings until they have issued the default, so court letters are months, years away if they ever happen.

If you want to avoid hassle, remember there is no person dialling you, your creditors just have a computer programme auto-dialling and texting you. Invest in a few stamps and tell them you want all communication in writing. Put letters aside and go through them once a week.

You might want to make token payments to any early defaulters to keep them sweet, just pointing out your only income is benefits. Don't set up a full blown DMP with Stepchange until the defaults come in, or they won't and the AP markers do longer term damage to your credit record. If creditors refuse payments because you are on benefits, you might want to ask for debt write-offs on ill-health grounds?

Once you've moved your income and started saving, spend the next year checking out the career implications of a DRO, and start looking pro-actively for new accommodation. You've not mentioned your specific disability or your age, but are there local providers for over 50s accommodation or does the organisation specialising in your disability know of targeted accommodation?

In a year's time you should have a healthy emergency fund to allow you to move, a stronger understanding of your health and financial situation and it'll be easier to decide what to do. If you go for a DRO, you might want to move first, then file?

Hope it goes well. Come back if you want further advice or just start a diary for on-going support.

Thank you all so much for your advice. I've learnt so much on here in just a week from so many helpful people.

I am now in the process of setting up a Basic Account - I did indeed have to apply for a Current Account then got "declined" and recommended a Basic instead. That should be set up fairly soon and I can start setting up Direct Debits etc. as suggested.

This might seem like a silly question but do the letters creditors send usually have any really obvious markings on the envelopes, e.g. "debt notice" or "demand for payment" or whatever it might be or are they just plain ordinary-looking envelopes?

RAS, good to note about 6-18 months. I will bear in mind that these things could take time. That's not necessarily a bad thing, as it'll allow me to build up some reserves and budget properly, which I've been unable to do now for many years. Also, interesting about debt write-offs on ill-health grounds. I wasn't aware that was a thing. Is that something I could/should ask for now/early in the process or after defaults/debt collections/etc?

Thanks again for all the tips, I will be following them, e.g. I am going to look for an appropriate savings account.

RAS

Letters come in brown or white envelopes, sometimes with the creditors name and address on the back. Anyone who knows who Moorcroft is likely have been in a similar situation. Keep your eyes out for letters with a Northampton return address, but that's down the line.

You need to stop paying for a while before asking for write offs and it appears that some people get an initial rejection but a year alter it works. So it's a slow process.

stevieyork

RAS said:

Letters come in brown or white envelopes, sometimes with the creditors name and address on the back. Anyone who knows who Moorcroft is likely have been in a similar situation. Keep your eyes out for letters with a Northampton return address, but that's down the line.

You need to stop paying for a while before asking for write offs and it appears that some people get an initial rejection but a year alter it works. So it's a slow process.

Thanks, RAS.

You wouldn't happen to know how long interest will be added to my debts? Is there a maximum period they can add interest or an average period? Is it affected by anything I do, e.g. should I contact them and tell them to stop or is it better to completely ignore them? I'm a little concerned that the debts could surpass 50k and therefore remove the possibility of a DRO in June or after. (I am likely going for a self-managed DMP but would like to be fully aware of all my options in the future, should I need to use it).