New to DMP

System

This discussion was created from comments split from: DMP mutual support thread part 13 !!.

allystar

Absolute newbie here...

Been struggling with debt for as long as I can remember, but it has well and truly spiraled out of control (nearly £80k), although I have no missed payments, I have been wracking up more credit to simply get by.

I took the plunge and contacted Stepchange last week!  They have been amazing and i am at the beginning of a DMP, reducing my payments from around £1200 to £500 per month.

I am super anxious about what's ahead and all the chasing from creditors...what if they don't accept the DMP...are they likely to add charges and not freeze interest?  I have 3 loans and 6 credit cards, although all my CC's are 0%, I can't keep up the repayments.

my lenders are Zopa, AFSL & Rate Setter, with CC's under Virgin (x3), HSBC, Tesco, Sainsbury.

I am in Scotland...worried some lenders might take court action...just feel sick with what I'm doing to my family...

sourcrates

@allystar I have split your post into a new thread as you will get more responses in the main forum.

Usually we advise defaulting first, before entering debt management, but with a debt of almost 80k, you've probably done the right thing and gone to Stepchange.

What you need to understand is that debt management is a creditor approved, informal way to repay your problem debt, but at an affordable rate, so legal action, when they are getting a regular payment from you already, is extremely unlikely to happen, and even if it did, you still repay what you can afford, but under a CCJ, or "court decree" as you will know them.

Like wise, creditors can`t really refuse a DMP, if they are unhappy with what is offered, all they do is sell the debt to another company, who will be more than happy to take your money, so none of your concerns are valid to any great extent, best to relax, and try to carry on as normal.

One thing I would urge you to budget for is an emergency fund, for when things go wrong, new fridge/cooker/washer etc, as you won`t have access to any credit for a while, so it makes sense.

Brie

Hopefully you've discussed the situation with your family i.e. any partner you might have.  It makes it much easier in the long run to manage things if your OH knows that there's a reason you can't afford a extra special holiday or a new car every other year.  It also means that you don't need to jump every time the post lands on the door mat etc.  

Best of luck with it - StepChange is a very good organisation to help you through this.  

fatbelly

There's no reason any of those creditors should go for court action.

Let Stepchange set things up and then take a review after say 12 months

My only concern about your post is that a 160-month plan is very long

Grumpelstiltskin

OK as sourcrates has said you must save something because sure as houses the fridge/ freezer will die or the car fail it's MOT in a big way and you will need cash as you won't have access to credit.

I hope you have not agreed to a payment that is too big, but with a DMP if you have big problems  you can always review your payment, it isn't set in stone.

agentblackcat

Hi. 

Also in Scotland. I was in the same situation last year. With a larger amount of debt. I would of you can default on your payments and don't set up anything to repay until defaulted. Save money your not paying out into a savings account so you can build a buffer for emergencies. 
I did start going down the route of step change but I'm just going self managed. Debt collection is slow so don't worry. I honestly only wish I had done this years ago instead of getting into the spiral I did. 

ManyWays

What did Step Change say your alternatives were? 
Do you expect your situation to improve in the next few years or get worse, and do you have a car on finance?