A plan for Debt-free journey

GoodGuy2024

NeverendingDMP said:

If you have definitely decided you are going to dmp it's best to stop paying all of them and save an e fund first. I wouldn't go though the hassle of moving money about to make it less creditors to deal with. Once it's set up one more won't make that much of a difference, but please do revisit your summary of affairs. House or contents insurance? Even just contents as your renting and with three children you might find your gift budget is less than what it actually adds up too. 
More than all that my thoughts are with you for your recent loss. Please also remember to be kind to yourself and pause and have a break if you need to. 

Thanks a lot! This is helpful. Will add contents insurance to SOA. 

I think DMP is the best route that we want to take, IVA and bankruptcy are there too but we aren’t considering. I am determined to have the DMP to pay back what we spent - we are adults so it’s good to be accountable for it. Hopefully we will manage to get good % discount offer to settle some of these earlier. 

Cheers

GoodGuy2024

Brie said:

GoodGuy2024 said:

Brie said:

I'd continue paying the minimum on the 0% cards until the offers end and then stop.  And stop all the others asap, but as I said - call them and tell them what you are doing and why.  Don't move any money about if it means you are essentially taking a cash advance from a cc and paying high %.  

And I know that people like to have an emergency fund - I suspect in your situation you do really need one if you are not going to have credit available for a while.  Yes - it needs to be tucked away somewhere none of the creditors can get to it - so not in any banking group where you owe money.  

Calling them sounds daunting but I’ll do it and get the 60 days started. Is this what’s called ‘Breathing space’?

ive just had a look a first direct website and it’s likely they’ll ask me for complete a budget/income/expenditure sheet. I actually created an account with StepChange and there is the option for them to apply for the breathing space on my behalf, I just need to give out my credit details etc, so I might use them to do this. 

Yes I would like to DIY DMP, when it comes to it.

GoodGuy2024 said:

Another Question : for the furniture loan taken from V12 finance. I pay £127 a month towards it which will end on April/May next year. It was 18months 0% loan when I took it a year ago so have 7months left in it.

what I don’t understand would it be a problem if I carry on paying for this till it ends while getting CCs and ODs defaulted? OR better to stop it too with everything else apart from priority bills. 

Breathing Space is something official that SC or other agencies can apply for on your behalf.  But if you (or the agency) contacts the creditors they may grant this on an unofficial basis since they see that you're trying to sort things out.

If you've got SC on your side then they can put together a financial statement for you and submit it to the various creditors to help you set up your DIY DMP.

There is a problem with paying one creditor at a full amount and others at zero or a token payment.  It's called giving preferential treatment.  Might not matter with a DMP but certainly would with DROs and possibly other debt solutions. 

Noted. Thank you.
 

GoodGuy2024

Ok I have opted for stopping all direct debits now. 

I have set up direct debits for priority bills to my new bank account (nationwide) and arranged my salary to go in it too at the end of the month. 

Just wondered when my accounts defaults - would that not affect my ability to insure my car? I usually pay monthly. If so, I probably have to dip into the emergency fund to pay it via one payment annual.

Sarahwithlove

Probably a good idea to pay it annually anyway as cheaper and you'll have more income now whilst your DMP gets set up 

[Deleted User]

I am book marking this diary and will follow your progress with interest You seem to be heading in the right direction. It is refreshing to see you working as a couple to tackle the challenges ahead. It is also good to have another man writing a diary. There are too few males on any of these forums.

One thing I would say is that child benefit needs to be part of your total income for the purposes of your SOA. Every pound needs to be taken into account and given a job!

With a family I also suggest you need contents insurance and some life assurance policy. If you work in the public sector ensure any death in service benefits are understood and nominations have been recorded by the employer.

Is there any scope for reducing your grocery spend?

Hopefully, you will be successful to reducing and eventually eradicating your debt.

Best wishes.

GoodGuy2024

[Deleted User] said:

I am book marking this diary and will follow your progress with interest You seem to be heading in the right direction. It is refreshing to see you working as a couple to tackle the challenges ahead. It is also good to have another man writing a diary. There are too few males on any of these forums.

One thing I would say is that child benefit needs to be part of your total income for the purposes of your SOA. Every pound needs to be taken into account and given a job!

With a family I also suggest you need contents insurance and some life assurance policy. If you work in the public sector ensure any death in service benefits are understood and nominations have been recorded by the employer.

Is there any scope for reducing your grocery spend?

Hopefully, you will be successful to reducing and eventually eradicating your debt.

Best wishes.

Thanks Baron_Dale, welcome to my thread and thanks for your kind and encouraging words. I just had to make a change as I knew with no plan, I will forever be in debt. 

Yes will the CHB into the mix too. 

Will try to revise the grocery shopping - 2 teenager boys are growing up plus we have regular visits from the ever expanding in-laws ha ha. I will start a strict budgeting spreadsheet from this current month and will review SOA to reflect the current shopping spenditure. 

GoodGuy2024

Sarahwithlove said:

Probably a good idea to pay it annually anyway as cheaper and you'll have more income now whilst your DMP gets set up 

Hi Sarahwithlove,

yes I will do that, luckily my car insurance is coming up at the start of Nov so should have bit saved up already in the emergency fund to pay for that and out of my way for a year. 

GoodGuy2024

I really what I most like about the journey, not only I’m looking forward to be a debt free man which is an experience I never had for at least 13-14 years if not longer, the idea that I won’t be able to get credit for couple years! I think that would be a good behaviour and mind training during this period Not to rely on credit and not to go anywhere credit ever again. It would feel good to just live within our own means.

I hope that makes sense.

i also had a chat last night with my wife who is very supportive but was at unease about it to start with - I don’t blame her for feeling that way as I was even doubting myself few weeks ago. The stories from others who took similar journeys to become debt free on this forum has empowered me to read me and more to get myself familiarised with the process ahead of me and with knowledge comes power. It also shows that we are as a community we are effectively helping each other to better our lives and circumstances for better. 

I reassured her that it’ll be all Ok at the end. I wondered if she felt nervous about the change and process, as it will involve her also to be fully onboard and to stick to a budget which I’m sure she has tried effortlessly in the past, but with this journey the pressure will be on to follow the plan and to budget well. I think in the past whenever she needed an extra She just had it for granted without any come backs, where now no more access to these credit cards etc. 

Brie

Glad you talked to your wife.  It's better to have everyone working on the same plan to get things sorted.

londoner2019

Bookmarking. Good luck on your journey! Very pleased to read that you're tackling this together - a problem shared is a problem halved. Trying to hide things like this only adds to stress levels, totally unnecessarily in my view.

And very sorry for your loss - make sure you're giving yourself space in that respect.