DMP for £77k? I’m really scared…

Jaxjax12

Hi! I’m 30F. Looking for some advice on my situation. 

I’m so sorry for the long post but it’s taken me weeks to make an account and find the words to write down. 

I’m so ashamed and upset that I’m in this position I finally pulled my head out from the sand and looked into a DMP with Stepchange. 

I won’t lie it feels so wrong and knowing how it will obliterate my credit etc. is painful but I guess this is the consequences of my own actions. 

My debts a result of poor health, spiralling mental health due to the first and then finding dopamine in gambling and spending. I hate myself honestly. I’d got myself to such a good position in life finally and just obliterated it. What I have realised and is why I’m taking action is this big situation is impacting my health further. I’m having flare up after flare up from stress. I’m so depressed and I’m not functioning as a person. My relationships suffering because of how I’m feeling and at one stage I genuinely was like “I can’t go on, there’s no way out”. I’m doing a little better since reading the forum and others and seeing there is a potential light at the end of the tunnel. 

So my question is what next? Do I need to amend my plan slightly? Am I going to get hounded by my creditors and end up with CCJs?

I agreed to the DMP without realising it may be better to default first. I don’t have an emergency fund BUT the payments the DMP have suggested are super low compared to what I was expecting so I’d have a nice safety net in no time if I cut back on other areas. I also work and get a commission bonus each month which is variable and this next payday would see quite a hefty sum compared to others. 

I believe my one account will default soon as I’ve been in contact with them quite a lot. This one also scares me because it’s a £24k loan and I really don’t see them accepting the low payment offered. I’m angry I fell behind with this account because I never have but two rubbish months of MH and then work underpaying my comms plus the backlash of my other financial mistakes put me in some financial difficulty. 

They have told me they won’t sell the debt on if I’m in contact with them but surely at that high a loan they’d look to take me to court? Monthly payments £592. 

In total there’s 13 creditors. 3 CC accounts with 10k maxed limits each (one is the same creditor but 2 cards of a combined limit) and then another CC with 5k. 

Another is my Flex account attached to my bank (£6.2k) a pay in 3 spread over 12 months etc. I’d paid this off by half and then had a bad month. I had been up to date with this and had no issue paying but then this month happened. I had every intention of paying this but now also think they may default me because they will need me to get up to speed quite quickly (I could potentially do this). Missed payment was £480. So few months of that before it drops. 

The rest are a mix of CC with amounts varying from £500 - £2000. 

Honestly just writing this makes me feel so angry at my own sheer stupidity. 

My avg earnings are about £2900 - £3700 after tax. This is usually higher but not guaranteed in my line of work. Plus they keep screwing up the comms so I keep getting underpaid or then have clawbacks I wasn’t expecting (another story). I receive £730 in benefits also.

My personal outgoings which really are non negotiable they’re the lowest the could possibly be are: £716

Plus a minimum payment to my partner for a loan: £333 (I intend to pay at least double this a month to clear it quicker and replace some
of the savings we had that I’ve spent). 

My joint bills are: £931 I do need to increase this as our food bill is going over each month and we only budget £500 between us for a family of 3. We can’t see where we can cut back even though that sounds bonkers amount of money to spend!

Then our childcare differs each month depending on how many days in the month there is: £90 - £140. 

So total outgoings before considering me having any form of life/enjoyment etc is: £2453 approx. 

We had intended to buy a house but just as we got a MIP the rates and house prices got ridiculous and I was really put off by the value for money. 

Obviously now I’m destroying my credit file, that doesn’t seem like it will be reality any time soon either which is further depressing me. 

Is a DMP my best course of action? How can I limit the damage? My main concerns are the future. I feel so horrific having done this and impacting my family this way. I’ve read about AP markers lasting longer etc. 

DMP payments are £203 (I was shocked when they came back with that after I filled in the form as it had dropped off the average of my last 3 months pay). That gives me a DMP length of over 30 years (yay). I’m aware I can make larger payments to step change which I had already said I would do each month depending on my income. 

No assets. My car is on PCP (again stupid cause I owned my last one). Luckily my partner has our other savings in his name so I haven’t been able to fully destroy our life. 

I’m the higher earner and have taken on the debts originally due to my partners lower wage and having to support us and keep up with a lifestyle prior to the cost of living crisis. Luckily my wage increased but obviously my life got complicated and I abused the lines of credit I had, took out more and I mean this jokingly somehow managed to get myself in so much debt in my sleep… 

I genuinely have no recollection of how I got here really until the last couple months when I sat and looked at it. 

However the minute I looked at it. It got worse. 

I apologise if this is a bit scatty and jumps from part to part. I have ADHD and I’m not the best at articulating without lots of words. 

I’d appreciate any advice you can give me. Thank you in advance. 

Misslayed

I’m not in a position to be able to give you any advice, but there are some very knowledgeable, experienced, non-judgmental folk here who will be help. Some have been in your shoes and got through it. Someone will be along soon. 

Well done for taking this first step/huge leap. 

freshstart2023

Hey, someone knowledgeable will be along in no time with advice. I just wanted to say that starting a DMP has been the best decision for me, it has taken away the constant worry, I am learning to budget as I have no choice. It is mind blowing how I used to spend..only realise this now that I can’t. I have a DMP for £50K but on half your salary so I’m sure it’ll be doable, however, your personal outgoings seem huge to me. Maybe someone here can help advise how to reduce that? 

Jaxjax12

freshstart2023 said:

Hey, someone knowledgeable will be along in no time with advice. I just wanted to say that starting a DMP has been the best decision for me, it has taken away the constant worry, I am learning to budget as I have no choice. It is mind blowing how I used to spend..only realise this now that I can’t. I have a DMP for £50K but on half your salary so I’m sure it’ll be doable, however, your personal outgoings seem huge to me. Maybe someone here can help advise how to reduce that? 

Thanks so much for your response and sharing your experience with a DMP. May I ask how long you’ve been on this for? 

So my personal includes £286 for my car finance and £159 for a cleaner. I don’t want it to appear a luxury because I really wish I didn’t have to pay for one. I can’t do as much as I used to be able to and it’s one of the things I would say is non negotiable to me as it helps so much with my quality of life. My partner says we don’t need one but reality is if we didn’t I’d be a complete mess myself and probably bed ridden from overwhelm and pain. I only have her once a week and do as much as I can other days. Should have added I get £20 back from my OH in the total outgoings too as I pay his phone contract. 

The rest is life insurance, pet insurance, pet plans (I am going to review this one), glasses and car tax. 

As for joint minus food they are: £583 inc rent. 

sourcrates

How long have you been in this DMP ?

I know the usual advice is to default first, but normally making reduced DMP payments will get you to the same place anyway, it just takes longer.

But, and its a big but, with a 77k debt, no assets, and the prospect of a 30 year DMP, have you considered bankruptcy as an alternative?

When you consider the time scales involved, even with the prospect of settlement offers when your debts get sold further down the line, bankruptcy would have the least and the shortest affect on you.

You could go bankrupt tomorrow, be discharged in 12 months, 5 years later your credit file would be clear, and although you may have to declare the bankruptcy to future lenders, so may not get the best rates, a mortgage would not be out of the question in say 5/6 years time.

Compare that to a DMP even using the best case scenario, you won`t clear the debt for at least 15/20 years, so really its down to you how you want to get out of this and what your future priorities are.

Obviously a detailed SOA would be needed first to make certain of your figures etc.

freshstart2023

Jaxjax12 said:

freshstart2023 said:

Hey, someone knowledgeable will be along in no time with advice. I just wanted to say that starting a DMP has been the best decision for me, it has taken away the constant worry, I am learning to budget as I have no choice. It is mind blowing how I used to spend..only realise this now that I can’t. I have a DMP for £50K but on half your salary so I’m sure it’ll be doable, however, your personal outgoings seem huge to me. Maybe someone here can help advise how to reduce that? 

Thanks so much for your response and sharing your experience with a DMP. May I ask how long you’ve been on this for? 

So my personal includes £286 for my car finance and £159 for a cleaner. I don’t want it to appear a luxury because I really wish I didn’t have to pay for one. I can’t do as much as I used to be able to and it’s one of the things I would say is non negotiable to me as it helps so much with my quality of life. My partner says we don’t need one but reality is if we didn’t I’d be a complete mess myself and probably bed ridden from overwhelm and pain. I only have her once a week and do as much as I can other days. Should have added I get £20 back from my OH in the total outgoings too as I pay his phone contract. 

The rest is life insurance, pet insurance, pet plans (I am going to review this one), glasses and car tax. 

As for joint minus food they are: £583 inc rent. 

Hi, only 6 months as I awaited everything to default first. I have received a few offers of settlement at 50% already so hoping these come around again when I am in a better position. Could your partner do the cleaning or do they have health issues also? 

Jaxjax12

sourcrates said:

How long have you been in this DMP ?

I know the usual advice is to default first, but normally making reduced DMP payments will get you to the same place anyway, it just takes longer.

But, and its a big but, with a 77k debt, no assets, and the prospect of a 30 year DMP, have you considered bankruptcy as an alternative?

When you consider the time scales involved, even with the prospect of settlement offers when your debts get sold further down the line, bankruptcy would have the least and the shortest affect on you.

You could go bankrupt tomorrow, be discharged in 12 months, 5 years later your credit file would be clear, and although you may have to declare the bankruptcy to future lenders, so may not get the best rates, a mortgage would not be out of the question in say 5/6 years time.

Compare that to a DMP even using the best case scenario, you won`t clear the debt for at least 15/20 years, so really its down to you how you want to get out of this and what your future priorities are.

Obviously a detailed SOA would be needed first to make certain of your figures etc.

So it hasn’t started yet, it’s due to on Dec 1st. 

Annoyingly the loan wasn’t meant to be included with the DMP as I was on top of it and paying it but the last month or so happened. I also was told I needed to include this in my DMP with step change but I am having open comms with the lender currently of best way forward. 

Bankruptcy isn’t an option as it will impact my job. It’s not one of the areas you’d typically see impacted by it but they got all high and mighty with these ridiculous contracts last year. I’ve technically not signed it and am working under protest still (they’ve definitely forgotten half of he refused to sign). I wouldn’t want to rock that boat just yet just in case any way. 

The 30 years DMP threw me at first and I mean it when I say I was comfortable paying a lot more than what stepchange have no proposed. They’d said £203 and my original thought was atleast £600. 

Will work on a detail SOA now. Thank you. 

Jaxjax12

freshstart2023 said:

Jaxjax12 said:

freshstart2023 said:

Hey, someone knowledgeable will be along in no time with advice. I just wanted to say that starting a DMP has been the best decision for me, it has taken away the constant worry, I am learning to budget as I have no choice. It is mind blowing how I used to spend..only realise this now that I can’t. I have a DMP for £50K but on half your salary so I’m sure it’ll be doable, however, your personal outgoings seem huge to me. Maybe someone here can help advise how to reduce that? 

Thanks so much for your response and sharing your experience with a DMP. May I ask how long you’ve been on this for? 

So my personal includes £286 for my car finance and £159 for a cleaner. I don’t want it to appear a luxury because I really wish I didn’t have to pay for one. I can’t do as much as I used to be able to and it’s one of the things I would say is non negotiable to me as it helps so much with my quality of life. My partner says we don’t need one but reality is if we didn’t I’d be a complete mess myself and probably bed ridden from overwhelm and pain. I only have her once a week and do as much as I can other days. Should have added I get £20 back from my OH in the total outgoings too as I pay his phone contract. 

The rest is life insurance, pet insurance, pet plans (I am going to review this one), glasses and car tax. 

As for joint minus food they are: £583 inc rent. 

Hi, only 6 months as I awaited everything to default first. I have received a few offers of settlement at 50% already so hoping these come around again when I am in a better position. Could your partner do the cleaning or do they have health issues also? 

That’s promising to hear! Thank you. 

He does so much already. Honestly it upsets me how much he does and takes on vs. How much I’m now not doing. I’m also due an operation and have unsurity on the level of “bad” they will find soon which may mean further surgery where I can’t move for a good few weeks. He has his own “condition” and it doesn’t impact his ability but I don’t want to add anymore onto him for the sake of his own mental wellbeing. Me paying for the cleaner lightens that load on him also.  

Jaxjax12

sourcrates said:

How long have you been in this DMP ?

I know the usual advice is to default first, but normally making reduced DMP payments will get you to the same place anyway, it just takes longer.

But, and its a big but, with a 77k debt, no assets, and the prospect of a 30 year DMP, have you considered bankruptcy as an alternative?

When you consider the time scales involved, even with the prospect of settlement offers when your debts get sold further down the line, bankruptcy would have the least and the shortest affect on you.

You could go bankrupt tomorrow, be discharged in 12 months, 5 years later your credit file would be clear, and although you may have to declare the bankruptcy to future lenders, so may not get the best rates, a mortgage would not be out of the question in say 5/6 years time.

Compare that to a DMP even using the best case scenario, you won`t clear the debt for at least 15/20 years, so really its down to you how you want to get out of this and what your future priorities are.

Obviously a detailed SOA would be needed first to make certain of your figures etc.

SOA Below. My income swings and can higher. This month for example is £6k but I’ve gone with a rough average. Min would be £2.9k

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 1

Number of cars owned.................... [b]

Monthly Income Details[/b]

Monthly income after tax................ 3100

Partners monthly income after tax....... 0

Benefits................................ 834

Other income............................ 0[b]

Total monthly income.................... 3934[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 340

Management charge (leasehold property).. 0

Council tax............................. 78

Electricity............................. 55

Gas..................................... 0

Oil..................................... 0

Water rates............................. 15.4

Telephone (land line)................... 0

Mobile phone............................ 63

TV Licence.............................. 13.33

Satellite/Cable TV...................... 17

Internet Services....................... 9.75

Groceries etc. ......................... 250

Clothing................................ 65

Petrol/diesel........................... 80

Road tax................................ 16

Car Insurance........................... 41

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 150

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 11

Pet insurance/vet bills................. 79.43

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 34

Other insurance......................... 0

Presents (birthday, christmas etc)...... 58

Haircuts................................ 11

Entertainment........................... 65

Holiday................................. 0

Emergency fund.......................... 0

Partner loan ........................... 333

Car PCP................................. 286

Cleaner ................................ 159[b]

Total monthly expenses.................. 2229.91[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Admiral loan ..................24812.....596.......17

Barclaycard CC.................2343......23........0

Capital one CC.................470.......50........24.6

Zopa...........................653.......24.65.....29.2

Virgin CC......................9132......91.33.....0

Virgin CC......................4034......40.34.....0

Vanquis CC.....................2274......99........24.6

Fluid CC.......................1048......11.33.....0

NatWest CC.....................10027.3...112.......0

Monzo flex.....................6164......486.......24

HSBC CC........................5004.06...108.......0

Halifax CC.....................10102.....358.......27.14

Capital one CC.................1235.41...50........24.6[b]

Total unsecured debts..........77298.77..2049.65...-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,934

Expenses (including HP & secured debts). 2,229.91

Available for debt repayments........... 1,704.09

Monthly UNsecured debt repayments....... 2,049.65[b]

Amount short for making debt repayments. -345.56[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 0

Total HP & Secured debt................. -0

Total Unsecured debt.................... -77,298.77[b]

Net Assets.............................. -77,298.77[/b]

bilko89

Jaxjax12 said:

Hi! I’m 30F. Looking for some advice on my situation. 

I’m so sorry for the long post but it’s taken me weeks to make an account and find the words to write down. 

I’m so ashamed and upset that I’m in this position I finally pulled my head out from the sand and looked into a DMP with Stepchange. 

I won’t lie it feels so wrong and knowing how it will obliterate my credit etc. is painful but I guess this is the consequences of my own actions. 

My debts a result of poor health, spiralling mental health due to the first and then finding dopamine in gambling and spending. I hate myself honestly. I’d got myself to such a good position in life finally and just obliterated it. What I have realised and is why I’m taking action is this big situation is impacting my health further. I’m having flare up after flare up from stress. I’m so depressed and I’m not functioning as a person. My relationships suffering because of how I’m feeling and at one stage I genuinely was like “I can’t go on, there’s no way out”. I’m doing a little better since reading the forum and others and seeing there is a potential light at the end of the tunnel. 

So my question is what next? Do I need to amend my plan slightly? Am I going to get hounded by my creditors and end up with CCJs?

I agreed to the DMP without realising it may be better to default first. I don’t have an emergency fund BUT the payments the DMP have suggested are super low compared to what I was expecting so I’d have a nice safety net in no time if I cut back on other areas. I also work and get a commission bonus each month which is variable and this next payday would see quite a hefty sum compared to others. 

I believe my one account will default soon as I’ve been in contact with them quite a lot. This one also scares me because it’s a £24k loan and I really don’t see them accepting the low payment offered. I’m angry I fell behind with this account because I never have but two rubbish months of MH and then work underpaying my comms plus the backlash of my other financial mistakes put me in some financial difficulty. 

They have told me they won’t sell the debt on if I’m in contact with them but surely at that high a loan they’d look to take me to court? Monthly payments £592. 

In total there’s 13 creditors. 3 CC accounts with 10k maxed limits each (one is the same creditor but 2 cards of a combined limit) and then another CC with 5k. 

Another is my Flex account attached to my bank (£6.2k) a pay in 3 spread over 12 months etc. I’d paid this off by half and then had a bad month. I had been up to date with this and had no issue paying but then this month happened. I had every intention of paying this but now also think they may default me because they will need me to get up to speed quite quickly (I could potentially do this). Missed payment was £480. So few months of that before it drops. 

The rest are a mix of CC with amounts varying from £500 - £2000. 

Honestly just writing this makes me feel so angry at my own sheer stupidity. 

My avg earnings are about £2900 - £3700 after tax. This is usually higher but not guaranteed in my line of work. Plus they keep screwing up the comms so I keep getting underpaid or then have clawbacks I wasn’t expecting (another story). I receive £730 in benefits also.

My personal outgoings which really are non negotiable they’re the lowest the could possibly be are: £716

Plus a minimum payment to my partner for a loan: £333 (I intend to pay at least double this a month to clear it quicker and replace some
of the savings we had that I’ve spent). 

My joint bills are: £931 I do need to increase this as our food bill is going over each month and we only budget £500 between us for a family of 3. We can’t see where we can cut back even though that sounds bonkers amount of money to spend!

Then our childcare differs each month depending on how many days in the month there is: £90 - £140. 

So total outgoings before considering me having any form of life/enjoyment etc is: £2453 approx. 

We had intended to buy a house but just as we got a MIP the rates and house prices got ridiculous and I was really put off by the value for money. 

Obviously now I’m destroying my credit file, that doesn’t seem like it will be reality any time soon either which is further depressing me. 

Is a DMP my best course of action? How can I limit the damage? My main concerns are the future. I feel so horrific having done this and impacting my family this way. I’ve read about AP markers lasting longer etc. 

DMP payments are £203 (I was shocked when they came back with that after I filled in the form as it had dropped off the average of my last 3 months pay). That gives me a DMP length of over 30 years (yay). I’m aware I can make larger payments to step change which I had already said I would do each month depending on my income. 

No assets. My car is on PCP (again stupid cause I owned my last one). Luckily my partner has our other savings in his name so I haven’t been able to fully destroy our life. 

I’m the higher earner and have taken on the debts originally due to my partners lower wage and having to support us and keep up with a lifestyle prior to the cost of living crisis. Luckily my wage increased but obviously my life got complicated and I abused the lines of credit I had, took out more and I mean this jokingly somehow managed to get myself in so much debt in my sleep… 

I genuinely have no recollection of how I got here really until the last couple months when I sat and looked at it. 

However the minute I looked at it. It got worse. 

I apologise if this is a bit scatty and jumps from part to part. I have ADHD and I’m not the best at articulating without lots of words. 

I’d appreciate any advice you can give me. Thank you in advance. 

Currently in a Trust Deed myself and 2 months in, so early doors for me also. I've learned I was a compulsive gambler and joined Gamblers Anonymous in July and it's been transformational for me. If you want to have a chat about that side of things, please don't hesitate to send me a PM!

Budgetmealplanner

Don't worry - I'm in a DMP for around 50k, joint income is £70k, so far no one has chased for CCJs or anything and one of my loans was only 3 months old when I started the DMP, I'm 2 years in and have started getting the odd 50% F&F offers, so according to my spreadsheet that 50K can and will likely be cleared for around 30k. The original timescale to clear was 15 years, I aim to have it all done within 5 years from the start. Annoyingly I too didn't have an emergency fund at the start, but do now - have £1,200 for any issues.

Looking at that food bill, have you an example? There's 4 of us (2 adults, 2 kids aged 8 and 4 and 2 cats) and we spend around £300-350 a month on all groceries. We sometimes still get a takeaway in there too. 

Childcare - look at what the most expensive month is - and put hat away every month towards it, then you always have a buffer. Do you use the Tax free childcare account too?