In process of setting up S/C DMP - advice needed re NatWest affordability complaint

Scarlet_to_Black

Just to introduce myself, as I think you will be seeing a lot of me around these parts!  Apologies in advance for the War and Peace introduction and questions!

I did a DMP with StepChange a decade ago, which was very successful and they helped me get a mortgage when I was selling the family home during divorce.  It was the only really stressful time of the DMP, as I had one option for mortgage lender (Magellan), who said way into the process that I had to pay off my debts in full prior to agreeing the mortgage.  Thanks to my lovely dad, who has since passed, who lent me the money to do F&F settlements to clear all debt so that the mortgage could go through and I paid him back from the proceeds of the sale.  It was the most horrendous time and I literally spent weeks and weeks trying to sort it all out and was near a mental breakdown! 

Dad would be so upset that I'm finding myself in the position I am now as I'd done so well.  Ironically, it was after he passed away that I thought, "sod it, life's too short" and got a loan for £12,000 in August 2022 so I could buy a caravan (something we'd enjoyed together before he passed away when my parents used to join us in their van on caravan trips).  

I'm a single parent with five kids, three of them adults living in their own places, with just two left at home, age 16 and 14.  I think I am undiagnosed ADHD as I have had growing issues of a neurodivergent nature, particularly since menopause, so I think that has a part to play as I'm a bit impulsive and don't consider the future always, although I can be very OCD and organised too, which is certainly helping me at the moment.  I also have a history of chronic anxiety which I take meds for the last few decades.  

So, my situation currently is that I had a sleepless night last Monday night and realised on Tuesday I needed to take off my blinkers and do my comprehensive budget update (last time I'd even looked at this was in January two years' ago!), the outcome of which revealed I am paying £799 a month on debt repayments of nearly £42k    When I realised I had thoughts of topping myself at some point down the line as one option (not a serious threat), I knew that I needed to completely trash my creditworthiness if I was to get straight before I'm heading to retirement (I'm 55 next month).  StepChange have worked out that I have £335 a month for debt repayments, so I'm going to go ahead with that, despite being totally ashamed I've reached this point again a decade later.  I've fiercely protected my credit file since the defaults all fell off in 2021, so it was with some reluctance but I'd rather this than have any lines of credit where I could make the situation even worse. 

I do have equity, which a friend had advised contacting the bank to free up.  I have a LV ratio of 33% with about £180,000 of equity.  I think that this might be why my bank, NatWest, have given me access to so much credit, but not sure if that is how it works.  My mortgage is with them  (£71000 remaining) and I have two credit cards and two loans, totalling about £35.5k.  My income (including salary, child maintenance and some UC) totals about £42k pa.  Anyway, I thought this was a rubbish idea, as I don't want to add unsecured debt to my mortgage and I would also not be trashing my credit file, so potentially getting into the same situation as quickly as before.  

I am quite shocked that NatWest lent me as much as they did.  My income is £3060 a month, which seems a lot on the face of things, but outgoings including the debt repayments which are only going to get worse with 0% coming to an end and my only ever having made minimum payments, have meant I'm skint every month with just £335 left to service debts, according to SC.  This is now clear why I have been using my credit card for day to day expenses for a number of years and then furiously moving debt around.  So, my question is, is it all my own stupid fault for being so rubbish at budgeting and lacking impulse control, or should I not have had access to so much credit?  I will detail below what I have and when, if anyone has managed to read this far and would be kind enough to advise 

I have two credit cards with NW - one since July 2021 (12% interest) which was credit limit of £4500, increased in Feb 2022 to £5850, December 2022 to £7100 and June 2023 to £9000.  Balance on this is currently £4273 but I have moved debt off it regularly to 0% offers and late last year consolidated a lot of debt including the balance on this card into a £13.5k personal loan with NW in February 2024.  I had already taken out the £12000 loan (balance is now £9.3k) in August 2022 after my dad's death in July 2022.  (I did put that this second loan was for debt consolidation on my application and I was quite shocked when they agreed it).  I had also applied for the Cost of Living Mortgage Support with NW in September 2023, reducing my mortgage from £435 a month to £80 a month for six months, and once that finished my mortgage went up to £450 a month.  My plan was to pay down some debt with the excess, but what actually happened was I just didn't use the credit card during that period so I didn't actually pay anything off.  

As well as the NW debts I have £2.8k, which is the remainder of a Sainsburys personal loan I took out in 2021 for £7k originally, and a Lloyds credit card, which was a credit limit of £6700 that they've just increased to £7150 this month, which has a balance of £6800 on it now, which I last used  last week, just before I opened my eyes and did my budget to transfer some cash (£1500) to my current account, which I feel guilty about now as I knew I was really struggling but did it anyway as I was so panicked about my situation.  I have a very small amount of £200 on an old Next account which I've been paying the minimum payment of £11 for years and then I have PayPal credit, owing £2900.  

I'm not sure if this is just too complicated for someone to look at it and say, yep, NW shouldn't have been lending you the money they were, particularly when I'd done the Cost of Living Mortgage support five months before taking out the second loan of £13500.  Do I just get on with sorting my DMP and get my head down and sort this out and just take full responsibility, or do I have any reason at all to contact NW and complain about the lack of attention into my spending and income before they gave me more lines of credit?  

Scarlet_to_Black

I think I missed off the second credit card with NW, which was taken out February 2023 with credit limit £4250 and this has remained the same with balance £3300.  That's 29% interest and 0% ended December 2024

Brie

Must admit I got lost in your narrative and don't know what's really happening.

Can you keep it short and simple and just say who you owe, how much you owe, % rate, monthly payment?

Scarlet_to_Black

Sorry, it’s a terrible cross I bear…inability to edit! 

I can put try and put it in a summary. I confused myself!  I’m just verging on the ‘get on and get it sorted’ and forget the affordability complaint, which I only learnt about reading the forum in the last week but don’t really know if it’s applicable to me. 

ManyWays

I too got a bit lost. Could you simply list the loans and credit cards and any overdrafts you have had with NatWest? It did sound like a lot, in which case a DMP plus affordability complaints may be a good options for you?

Scarlet_to_Black

Thank you! This is what I borrowed, when and correct balance (probably what I should have listed in the first place!): 

Sainsbury’s loan November 2021: £7k, balance £2818
NatWest credit card July 2021 (credit limit £4500 now £9k), balance £4273.12
NatWest loan August 2022 £12000, balance £9301.80
NatWest credit card February 2023 (credit limit £4250), balance £3389.98
NatWest loan February 2024 £13500, balance £12946.29
Lloyds credit card July 2024 (credit limit £6700 now £7150, balance £6818.18
Paypal credit, balance £2900
(Total circa £42k)

I applied for NatWest Cost of Living Mortgage support September 2023, 6 months mortgage interest only repayment from £435 down to £80 per month 

Income £1929 (£29k pa)
Child maintenance £596 (£7k pa)
Child benefit £170 (£2k pa)
UC £342 (£4k pa) 

Outgoings before debt repayments £1250 per month
Debt repayments £799 per month 

Scarlet_to_Black

Outgoings listed are purely priority direct debits. Food, petrol, day to day living costs, emergency outgoings are on top of that total. 

ManyWays

That is a lot of borrowing from NatWest and I see your point that it's odd to give you another big loan in Feb 24 while you were still in the 6 month IO mortgage period. I think its worth complaining about all of it, both credit cards and the loans. And possibly the Lloyds card too, as that was very recent and they should have seen all the other debts on your credit record. 
But also go for a DMP, you can never be sure you will win claims or how long they may take at the Financial Ombudsman.

Scarlet_to_Black

Thanks so much! I’ve been reading Debt Camel and this has confirmed what you advise too. I’ve only ever paid the minimum payment on all cards and debt was continually increasing due to having to use CC as I didn’t have enough left each month after debt repayments. 

I’m in the process with the DMP StepChange. They said likely start date of DMP would be 1st March. I’d applied for Breathing Space before I read the advice here that it just delays things and this finishes 18/03/2025.  I’ve noted the advice to default for two months prior to DMP, but I’m slightly reluctant to go too long as my anxiety will peak if I’m not in the DMP by 1st April. I’m considering dragging my feet a bit returning additional information StepChange have requested so I can have at least one month, if not two, to save into an emergency fund.  Would this be correct plan? 

Also, I’ll do the affordability complaints but should I wait until I’ve missed payments and DMP officially started or should I do this straight away? 

Thanks 🙏