DMP ADVISE

Finnbellebeau

Hi , I am currently on a DMP.
My partner lives with me but is on a very low Income so he contributes £500 a month to the bills.
He is in debt also and after seeing my relief after arranging a DMP he is thinking this may be a good idea for him to do.
All the bills are in my name so when doing his Incoming/outgoing can he just tell them that he pays £500 towards the bills ie shopping etc? how would this work?
Can we have 2 DMPS at the same address-I do not want a joint one.
I am with step change ,would he need to start his DMP with another like pay plan etc so it does not flag up the same address as again I do not want it to be a joint DMP as we share no credit together as we have only been together 2 years.
I only told him about my debt last month and it made him open up about his.
Any advice welcomed.

RAS

There is nothing to stop both of you doing an individual DMP with the same provider living at the same address, providing your financial statements are accurate.

But taking a step back. When you contacted Stepchange, did you start your DMP immediately, or did you wait for your debts to default first? And did you build up your emergency fund before you started making payments?

Did anyone explain that if you let the debts default, there will be some increase in your debt, BUT once the default is issued, you know your credit record will improve in 6 years time. Even if you still owe money.

If you start immediate payments, you will probably get AP markers. Those stay on your credit record for 6 years after the debt is settled, so potentially a lot longer. Some creditors will eventually issue defaults but that might delay them by several years.

Once a debt is defaulted, it is often sold to third parties, who often offer a discount for settlement after a few years, as well.

Finnbellebeau

Thanks for the quick reply.
I entered it last week so have not had any letters yet which I am starting to worry about.
I have cancelled my DD and changed bank accounts and wages.
I have only just come across this forum so had entered the DMP with no additional saving etc and the first payment to the DMP comes out in a few weeks so I assume they will pay the creditors right away and this may stop some CCJS.
CCJS are what I am really afaid of as I believe they really do ruin your credit and being taken to court is scary.
Regards to the same address-he just tells them he pays me housekeeping i;e £500 and they take that off his outgoings?will I need to end them bank statments to prove that he does?
Would it be worth him doing it from Payplan rather than stepchange so it does not complicate things? 
I am in a min wage job but never missed a payment on anything but used credit cards to get me over each month and it got so bad most of my wages (£900 a month) was going on credit card min payments-that why I am now relived as I will only need to pay the DMP £300 which is so much better.

RAS

Well, the starting point is that your creditors can't take you to court for CCJ until they have issued the default. As long as you set up a small payment once the default is issued, they are very very unlikely to take you to court. Costs money and they know they are unlikely to get more money per month than if they just let you pay so it's not cost effective.

Do you have any debts to a credit union?

Have you got decent savings? What happens if the cooker and the fridge both pack up? Or you need to go to a funeral?

Finnbellebeau

Thank you for your reply.
I have no saving but the DMP said i can put £25 a month away savings , I have never had any savings before.
No debts with credit union.
The most I owe to one creditor is £5k which is monzo bank flex credit card.
I owe 20K in total.
Its the bank I am most scared of as I ended up with a CCJ around 20 years ago from a bank and since then I have never defaulted or missed a payment but just ended up running up lots of debt trying to get out of debt if that makes sense.

Grumpelstiltskin

OK  Contact Stepchange and tell them you want to hold off starting your DMP for a few weeks.

It is important that you have a good emergency fund in place before  you start your DMP, £25 monthly, so what if the fridge/ freezer and the washer both pack up in 3 months time? £75 won't get you very far.

Please put CCJs out of your mind, very rare and way down the line, cancel all unsecured debt payments and save as much as you can into your emergency fund then in say 6 months time you should have enough saved to think about starting your DMP.

RAS

Good, credit unions can be a more difficult to deal with.

I'd add, no debts on essential bills like CT and utilities?

My personal advice and that of most on DFW is that you need at least a month's essential costs as savings. No employment is safe, and UC takes weeks to come through. I'd suggest you delay that DMP by at least 3 months and put your £300 into,an instant access savings account.

We see so many people in a panic when something goes wrong and they haven't any money. OK they can stop their Stepchange payment, but it's all stressful. It need not be if you have some savings. 

And the same for your partner. Open a new basic bank account, requires no credit check. Transfer income, stop paying until the debts default. Meantime do your Statement of Affairs, live with it for 6 months and refine it. Once the defaults are registered, set up standing orders to pay the creditors. Ask a debt charity to take over if you wish.

And to add from my personal experience, savings can mean you can buy reduced tins when they are on offer, 'cos you've got the extra £2. Pay your savings account back when you use them. It can mean you can afford the monthly travel pass, which gives you a bigger discount, because you've got necessary £75. I traded up to a 3 monthly over time, because I had some savings.

fatbelly

You were unlucky to get a ccj 20 years ago

Most consumer credit debts never see court action. I have a rule-of-thumb figure of 1 in 10.

Before ccj, they must issue a court claim, which can be defended.

Before that, they must follow protocol and issue a reply form which you would reply to (this stage did not exist 20 years ago)

Follow advice on this board and you will both be ok

sourcrates

We always see a rush of people after the Christmas bills come in, panic when they can`t make the payments, and jump straight into debt management as they perceive one missed payment will result in a CCJ or worse.

The truth however, is a long way from that, debt collection is a long process, nothing much happens for a good while, and you have plenty of time to get your plan of action put together, save a healthy emergency fund, and do things so you have the advantage, not your creditors.

Debt management is not a regulated debt solution, its an informal arrangement, so there are no real rules except those made by the debt charities, you can manage one yourself, its extremely easy, its just a way to repay what you owe, on a monthly basis, but at an affordable rate.

Much the same as you did previously, all your doing is sending your payment to your lenders each month, most have websites where payment can be made, no need to do anything else but work out your budget, and decide who gets what according to your disposable income, you then split that as you see fit.

Of course you should never bank where you have debts, so a new basic account for hubby will be essential.

We always advise defaulting first, others will, or will have already, explained why this is a good idea, you`ll get the gist of it in no time.

Finnbellebeau

Thank you all so much for your help and advice I’m so thankful. 

I found the whole process of the DMP chat really stressful so started to message them before I eventually took a phone call and went over all my debts .I didn’t even realise how much I owed until it was all worked out.Can I put the account with step change on hold without them having to do my incoming and outgoings  again and tell them all the debts again.
I can’t explain why IT felt so awful but I was shaking and crying when I got off the phone and felt embarrassed with the whole situation but they really did put my mind at ease.
I have 0 money left now to last me until I get paid but ashamed to say I used my credit card right up to the day I went on DMP to fill my car up and get shopping for the month .I am worried this could look like fraud as I knew I was going on a DMP but have no money to last me until payday and need my car to get me to work and back.
If I can put my step change DMP on hold without having to go over the process all over again,what will my debts think as they should I receive the letters by now? I don’t want to contact them all and say I’ve changed my mind incase they are less favourable to excepting it next time ? 

I’m sorry if I sound stupid I’m just so afraid .

Finnbellebeau

Sorry I forgot to add I have no debts with my essential bills like utilities etc or rent all up to date.
how will I know they are about to issue a default ? What if they all issue at a different time and then I have to contact myself rather than step change.
i don’t know if I can manage that stress.
I know I may sound ridiculous but I am such an over thinker and a worrier and I’m really just needing reassurance and the correct advice so I do appreciate all your help x