End of my DMP ! Debt free tips tricks and advice from someone who’s done it !

ChampagneSupernova36

debtspiraldisaster said:

I think I’m going to have to read your post a few times to get my head round it. I can’t make my monthly minimum payments on my debts and am falling behind. I looked at my spreadsheet for May and no way I can meet the minimums so I put my details into StepChange who immediately offered a debt management plan. I’m on the cusp of going for it because I’m just so scared of bailiffs turning up on the doorstep (yes I watch too much tv!) and CCJs & I’ll need a mortgage at some point in the future. My debts are all credit cards and personal loans. I don’t know what to do and I’m stupidly scared of getting into trouble and having people knock on the door (yes I’m 47 and still scared!) 

First of all , take a deep breath. You’re in exactly the right place. Before you go forward with anything , read this thread :

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

Basically, the general consensus on this forum is to stop payments all together (have a look at @Rob5342 and @sourcrates comments above). I know this sounds scary , I know precisely how you feel about the thought of getting into trouble, but there is a method to this.

  sourcrates said:

… is why we suggest getting your accounts defaulted first, and saving up those payments, get that emergency fund nice and healthy, so that further down the line, settlement offers are a real possibility, it can cut years off your plan.

Defaults, as scary as they sound, can work in your favour. From experience, I went immediately onto a DMP with stepchange and it wasn’t necessarily the best course of action. In hindsight, I would have stopped paying all together, let everything default , built up an emergency fund with the money I was using to pay debts and then manage my own DMP .

Some more reading to ease your mind :
https://forums.moneysavingexpert.com/discussion/6524440/does-this-plan-to-default-then-enter-into-a-dmp-work#latest

https://forums.moneysavingexpert.com/discussion/6524006/stepchange-recommends-a-dmp#latest

I would recommend starting your own thread , so the answers can be more tailored to you, include a statement of affairs as well so we can see the full picture.

This is a totally fixable situation, albeit not a quick and easy one, it feels like the walls are closing in but I hope to show you a bit of a clearer picture. Don’t be worrying or sitting in despair about this , reach out ( I have some links at the bottom of the OP), and of course my inbox is always open !

with love , E x

ChampagneSupernova36

razor1981 said:

When going through it with SC, do they:-

1) Work with the creditors to freeze interest ASAP?
2) Give a full timeline plan of paying all off?

Do you get any debts written off/reduced through them?
Do creditors or DCA's still offer the opportunity to pay of reduced settlements?

TIA

Good evening, 

1. Here is what their website says about interest: 

https://www.stepchange.org/debt-info/your-rights/freezing-interest-and-charges.aspx#:~:text=We%20can%20help%20you%20make,England%2C%20Wales%20or%20Northern%20Ireland


Basically, what they say here is that they will always ask creditors to stop interest but there is no guarantee that they will. I learnt this the hard way by going into my DMP without all accounts defaulting, a had more to pay than I expected towards the end.

2. yes, they give an approximate debt free date when you begin. Mine was about 4 years at the start but I cleared it in 2 and a half because circumstances can change.

3. I went to my creditors directly to offer my full and final settlement and got a 70% reduction on the final amount. So yes , that answers number 4 as well. Debts are usually only sold on to DCAs because they have defaulted, so that’s another pro of the default route. I link this forum in my OP but I’ll share it here for ease:

https://forums.moneysavingexpert.com/discussion/6522686/dmp-and-lump-sum-payment-advice#latest

Overall, stepchange did assist me in clearing my debts but I’d take a deep breath and weigh up your options first.

Yours , E x

lea

ChampagneSupernova36 said:

sourcrates said:

Well done, nice to read about something positive for once.

DMP`s can take a long time to complete, which is why we suggest getting your accounts defaulted first, and saving up those payments, get that emergency fund nice and healthy, so that further down the line, settlement offers are a real possibility, it can cut years off your plan.

Congrats to you.

This is absolutely the best advice I’d give anymore about to embark on this. Thanks for sharing all of your knowledge on this forum, it’s been invaluable for me and I’m very grateful!

Thanks for all this advice, I am about to start the process this week and have cancelled my DD's for my credit cards, it feels so scary but I feel more confident due to your post and the advice I've gotten on my own thread. I would have gone straight with StepChange if I hadnt posted on here and also seen your post so THANK YOU

Rob5342

debtspiraldisaster said:

I think I’m going to have to read your post a few times to get my head round it. I can’t make my monthly minimum payments on my debts and am falling behind. I looked at my spreadsheet for May and no way I can meet the minimums so I put my details into StepChange who immediately offered a debt management plan. I’m on the cusp of going for it because I’m just so scared of bailiffs turning up on the doorstep (yes I watch too much tv!) and CCJs & I’ll need a mortgage at some point in the future. My debts are all credit cards and personal loans. I don’t know what to do and I’m stupidly scared of getting into trouble and having people knock on the door (yes I’m 47 and still scared!) 

It would be better to start your own thread so people can offer advice on your specific situation. In short, using bailiffs is the very last resort at the end of long process, and as long as you engage with a solution it won't come anywhere near that.

ChampagneSupernova36

@lea good luck on your journey , do keep us posted, it’ll be over in no time 

Best wishes 

ChampagneSupernova36

Martico said:

Many congratulations, and great to see you share what you've learned along the way - I can imagine a few people that come onto this forum will be encouraged to read this thread

Thank you , I do hope so , anything to stop the initial panic like i endured 

lea

ChampagneSupernova36 said:

@lea good luck on your journey , do keep us posted, it’ll be over in no time 

Best wishes 

Thanks so much! Feels daunting but I'm sure its the right option for me. So glad you are through the other side of it!

ChampagneSupernova36

lea said:

ChampagneSupernova36 said:

@lea good luck on your journey , do keep us posted, it’ll be over in no time 

Best wishes 

Thanks so much! Feels daunting but I'm sure it’s the right option for me. So glad you are through the other side of it!

It’ll be you soon 

Gewakefie

Hi guys I just had a question

im following all advice and this is my first month I’m gonna default everything and build up emergency fund I’m just scared of how long can I default for? And if debt is sold on do I tell stepchange the new owner or the original creditor ? Also if it gets sold while I’m on dmp will stepchange know this or do I need to tell them

also when you make these settlement offer do you need to tell stepchange? Can this jeopardise other debts in dmp as in they will think I have money to pay one or the other.

Grumpelstiltskin

Gewakefie   Please stop raking up threads that are over a year old, you won't get answers start your own thread if you have a question.