Newbie starting a self managed DMP

strawberries_in_may

Hello, 

Newbie here 👋

I’ve been reading lots of posts on this forum to get to a point where I understand the self management DMP process. Still trying to get my head around it.

Very alien as I pay everything on time but the monthly payments are unmanageable which results in more debt - ultimately robbing Peter to pay Paul scenario!! 

I currently have £31.5k of unsecured debt. 

Nationwide overdraft - £500 
Nationwide personal loan 1 - £4,720 (£70 pm)
Nationwide personal loan 2 - £1,675 (£205 pm)

Hastings personal loan - £2,355 (£75 pm) 

Halifax personal loan - £6,161 (£205 pm)
Halifax CC - £4,000 (£190 pm) 

Capital One CC - £8,000 (£280 pm) 

Barclaycard CC - £4000 (£60 pm) 

Currently bank with Nationwide and have opened a new bank account with Monzo. 

I have cancelled all of my direct debits accept the Halifax personal loan and CC as we have a mortgage with Halifax and the fixed term comes to an end in June. I’m worried that if I stop paying them that it will impact our chances of getting another fixed term mortgage with them in June.

Should I continue to pay Halifax and wait until after we get another fixed term? Or do I treat them like the others? 

With the direct debit payment I would usually pay I was planning on paying off the overdraft with Nationwide. 

Once an account has defaulted do I put forward an amount that I can pay eg £30/£50 and still put money away in an emergency fund? 

Thank you - any advice / tips are welcome ☺️

Grumpelstiltskin

If you stay with Halifax for your mortgage there  is no credit check, so no problem.

You should in a few weeks time be able to go onto your mortgage account and see what will be available and just choose the suitable product

strawberries_in_may

Thank you @grumplestiltskin for replying 

I think my worry is that they will see I have missed payments on my loan and credit card they may then not want me as a customer for the mortgage (although it is a joint mortgage). 

RAS

If you stay with Halifax and just select a new deal, they don't do any sort of credit check, so their mortgage system doesn't even know about your consumer credit debt. You'll find many on here who've done the same, often twice, whilst repaying their debt.

If you are really really worried, then renew in 3 months and stop the DDs after that. But you'll need to feed the Halifax account monthly to cover DD.

strawberries_in_may

Thank you @RAS

I think I will stick with paying the DD for the Halifax loan and CC until we renew with them & then cancel the DD. It’s a shame really because it would mean that I could have potentially saved £400 a month in my emergency fund. Hey ho… the risk of them not accepting the new fixed term out weighs it I guess.

Thank you for your help 

RAS

There is no risk of them not accepting your new fixed term.

The delay is purely to deal with your anxiety.

Rob5342

strawberries_in_may said:

Once an account has defaulted do I put forward an amount that I can pay eg £30/£50 and still put money away in an emergency fund? 

Yes, create a sustainable budget for yourself that includes a payment amount to each creditor as well as an amount you put into an emergency fund. To start with put all the creditor payments into your emergency fund, and as they default pay the corresponding amount to the creditor instead. Once everything has defaulted you should have a good emergency fund built up and still be paying your emergency fund payment into it.

I would prioritise building up an emergency fund over repaying the Nationwide overdraft as you'll need something to fall back on.

strawberries_in_may

I didn’t think of not paying off the overdraft - I just thought at least that’s one less thing to worry about. However, I think that’s a good idea instead & put the £500 into my emergency fund.

Some of my debt are with the same banks such as nationwide and Halifax. When they default and potentially get sold on will they merge them together? For example Halifax becomes £10,161 and Nationwide £6,895. 

@RAS it’s something for me to think about, i have a couple of weeks before they are due to come out via DD 

Rob5342

It's up to you how you manage it and it might make sense to make some payments to clear some of the overdraft. All Im saying is that your main effort should be on getting an emergency fund built up.