DMP for £60k worth of debt...ready to tackle this!

EssexHebridean

so your actual emergency/fighting fund is currently at £8k then allowing for the £10k invested - I think in your shoes I would have held off on long term strategies like investing until my finances were a bit more squared up, but each to their own. In honestly as much as PB’s are good for those that need to avoid tax and have already maxed out other options, I think that £8k would probably do you more favours somewhere it would earn you a solid return at the moment. The best paying cash ISA accounts are currently playing a shade over 5%, and even the more mainstream providers have them out there for over 4.5% and that is more than the likely return from the PB’s with that level of money in. Sometimes you just have to take the view that certainty is a better bet than the possibilities of winning big! 

The other aspect is that right now you don’t actually have an actual emergency fund - as none of your savings are anywhere you can get them out literally right now. Think about it this way - suddenly you hear an odd noise from the kitchen - you head through there and realise it’s the fridge - the plug is really hot, it’s making an awful noise and, oh no, looking at the freezer section everything is soft…aargh! You need to buy a new one, and obviously you want it fast, living without a fridge is really inconvenient.in your case though you can’t order that  replacement for at least three days - maybe longer, as you can’t get your money out of the PB’s any quicker… see what I mean? An EF should always be somewhere accessible, and while PBs might work for someone who can use a credit card to bridge the gap, that won’t work so well in your situation. 

fatbelly

You can often get a decent interest rate on an emergency fund sized lump sum from your bank e.g. Santander Edge is giving 6% on up to 4k, Chase 5% up to 3k

bravo4_5

Essex and Fatbelly - I have now moved everything to a 212 Cash ISA apart from £1k which is easily accessible.

Can anyone shed some light - I’ve just received a letter from BOI my mortgage provider stating that they are “here to help”, “they know circumstances can change” and where I can get free independent debt help from….all my prioritiy bills have never missed a payment including my mortgage. Do you think this is just a generic letter? Or have they somehow become aware of my circumstances? If so, would this affect me switching rate with them come the end of my mortgage term this year?

fatbelly

Bank of Ireland do some other products but I can't see that you have any. Maybe as you say it is just generic.

bravo4_5

Very coincidental if it is! Just don’t want anything to affect the mortgage come renewal.

ManyWays

The Bank of Ireland website is clear that they dont do credit searches if you only want a new fix https://www.bankofirelanduk.com/mortgages/existing-customer/switch-to-a-new-rate/

Lettingissues77

Hi, you seem to be managing this all well! I am hoping to start a self managed DMP and save up an emergency fund. When the accounts has defaulted did you need to provide SOA? Thanks 

bravo4_5

Lettingissues77 said:

Hi, you seem to be managing this all well! I am hoping to start a self managed DMP and save up an emergency fund. When the accounts has defaulted did you need to provide SOA? Thanks 

No I haven’t provided an SOA to any creditor. It’s their way of seeing how much they can get out of you! I just said I’m paying X amount each month what are the bank details for a standing order.

Lettingissues77

Okay, that’s made me feel more confident. The thing that is putting me off going into a DMP is feeling just as out of control as I feel now- and as though I am struggling to make ends meet if the repayments are too high. I know if I can manage how much I pay, I can probably pay off debt within 5 years, and live within my means. 

EssexHebridean

The best thing about a DMP for a lot of people is that it gives them back control - because you take charge of how much you pay, it's no longer someone sending you a bill you can't afford, it's you setting your budget, working out what is affordable, and then making that as a payment. It also has the advantage that you learn to manage things more effectively going forwards - working within a budget, learning to live without credit and as you rightly say living within your means.