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In Debt again but starting a DMP

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Hi, long time lurker but thought it's about time I posted again.

Been in debt on and off for the last 30 years or so, but it's happened again.
Currently owe about £45k unsecured on various cards and loans. I've never missed a payment, i've never been late with a payment, the minimum payments are now over £1200 a month and I basically can't afford to live day to day, so for the last year I have been falling back on credit which is making the situation worse. It's also led to a shame, depression, anxiety spiral which means I've been really struggling for a while. It's come to a head since Christmas where everything is maxed out, I can't get any switching cards or consolidation loans (yes I really was going there yet again!) and my current accounts will be at max overdraft meaning I would have to miss payments this month. This has brought it home to me that it's unsustainable and I really need to do something about it.

I've been reading a lot of posts and comments suggesting managing the DMP yourself and letting the accounts default first, but I just don't trust myself to manage it properly and so I've spoken with StepChange and I've agreed a DMP through them which makes the situation more manageable.

Managing it like this also means I can go to my family and show them that I'm taking action, which has encouraged me to be honest about my situation and the extent of my debt, which I don't think I would have if I was trying to self manage.
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Comments

  • sourcrates
    sourcrates Posts: 31,510 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Its whatever works for you basically, if it takes the pressure off you going with Stepchange, then that`s fine, that`s why they are there, most people feel overwhelmed by debts they can`t afford, and are unsure how to deal with creditors alone, Stepchange takes away that uncertainty.

    Obviously there is also the flip side of the coin, where self management gives you the confidence to take matters into your own hands and deal with your debts in a way that works best for you in the long run, there are many ways to do this, so just go with what you feel most comfortable doing, as long as you don`t fall into the trap of using a fee based company for a DMP, all is well.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Brie
    Brie Posts: 14,648 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Well done for taking action on this.  Hopefully it will work ok and you'll get better at managing your credit in general so this doesn't happen again.  Lots of people need help - just as sourcrates said.
    I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards.  If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

    Click on this link for a Statement of Accounts that can be posted on the DebtFree Wannabe board:  https://lemonfool.co.uk/financecalculators/soa.php

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  • ET22
    ET22 Posts: 182 Forumite
    Third Anniversary 100 Posts Photogenic Name Dropper
    I dont have any experience of DMP's but I think you are very brave in finding help.It takes a lot of courage I think for people to share financial worries. We tend to keep it to ourselves when things are spiraling.  I think a lot of people who are now on a DMP would probably have had support in managing it so you did the right thing rather than get yourself more stressed out by managing it alone. You absolutely did the right thing going to Stepchange. Dont be scared or ashamed of asking for help x

    In respect of your mental health, have you seen your GP? There is nothing to be ashamed of.You have taken practical steps and action, a lot of people find themselves in similar situations and now stepchange are involved this will ease your anxiety. People have ups and downs in life and you've taken positive steps. Things will get better, just keep engaging with step change and keep posting on here so that you dont think you are alone in this and OP's can also suggest things to help. 

    Look ater yur mental health first and foremost, take care  x 
     






















    Current debt approximately 5000
    Goal- Zero debt by mid 2025
    Savings in 2026- an emergency fund of 5000

  • sourcrates
    sourcrates Posts: 31,510 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    ET22 said:
    I dont have any experience of DMP's but I think you are very brave in finding help.It takes a lot of courage I think for people to share financial worries. We tend to keep it to ourselves when things are spiraling.  I think a lot of people who are now on a DMP would probably have had support in managing it so you did the right thing rather than get yourself more stressed out by managing it alone. You absolutely did the right thing going to Stepchange. Dont be scared or ashamed of asking for help x

    The silly thing is people suffer in silence needlessly.

    Setting up a DMP is so easy, whether you use a debt charity or go it alone, but so many of us try to grin and bear it, and keep plodding on, not knowing what to do.

    You can solve problem debt in no time so easily, by getting a plan in place, no matter what solution you decide on, there is no need in this internet enabled world we live in to suffer any longer than need be, all it takes is that first step.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,421 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Please don't fall into the trap of rushing into a DMP without first letting the debts default and using the money you would have paid them to get a good emergency fund.

    Why? What will you do 9 months down the line when the washer packs up and the car fails it's MOT in the same week?

    Also if you start a DMP before the debts have defaulted you risk your credit report being marked 'Arrangement to Pay'

    Why don't you want this? A default disappears  6 years after it starts even if the debt hasn't been paid off. Arrangement to ay disappear 6 years after it is finally paid off. So if it takes 5 years to pay off it doesn't disappear from your credit report for 11 years
    If you go down to the woods today you better not go alone.
  • EssexHebridean
    EssexHebridean Posts: 24,421 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 25 January at 7:56PM
    It sounds like a managed DMP is going to be the right solution for you - you can always take it over yourself down the line when you feel more confident about it. 

    As above, defaults first really are the best way to go about it - don’t rush into things!

    also - it sounds like you need to give some proper thought to what the reasons are for the issues with debt, as it sounds as though because you have consolidated in the past you’ve never learned the lessons that you will take away from a DMP - budgeting, building an emergency fund, and learning to live within your means. This is what consolidation doesn’t do - because it’s nearly always viewed as a quick fix - although in fact it rarely fixes anything as you have discovered - it just pushes the problem further along the road! 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
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  • ET22
    ET22 Posts: 182 Forumite
    Third Anniversary 100 Posts Photogenic Name Dropper
    i have to say i defaulted on both my cards. the first was 18 months ago and sent to the debt collection company but they didnt chase it up after i stalled on a payment so never heard from them again and the second card i defaulted on a year ago but are still sending letters asking for money because they are trying it on, they know its not worth going to debt collection. I ignored them both and i really dont care because i wont use credit in the future anyway so they can do what they want. It might not have been the safest option but i'm here to tell the tale x  

     
    Current debt approximately 5000
    Goal- Zero debt by mid 2025
    Savings in 2026- an emergency fund of 5000

  • daveyadams
    daveyadams Posts: 43 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    edited 26 January at 6:50PM
    ET22 said:

    In respect of your mental health, have you seen your GP? There is nothing to be ashamed of.You have taken practical steps and action, a lot of people find themselves in similar situations and now stepchange are involved this will ease your anxiety. People have ups and downs in life and you've taken positive steps. Things will get better, just keep engaging with step change and keep posting on here so that you dont think you are alone in this and OP's can also suggest things to help. 

    Look ater yur mental health first and foremost, take care  x
    Thanks for your kind comments, I've not spoken to my GP, but actually coming clean to my family and friends has helped immensely and they have all been very understanding.

  • daveyadams
    daveyadams Posts: 43 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    ...
    also - it sounds like you need to give some proper thought to what the reasons are for the issues with debt, as it sounds as though because you have consolidated in the past you’ve never learned the lessons that you will take away from a DMP - budgeting, building an emergency fund, and learning to live within your means. This is what consolidation doesn’t do - because it’s nearly always viewed as a quick fix - although in fact it rarely fixes anything as you have discovered - it just pushes the problem further along the road! 
    This is very true, working out how I got into this mess is key to moving forward.
    I could never understand it myself until I was diagnosed with ADHD 2 years ago and it completely explains my lack of impulse control which is part of the problem. It also explains why I have trouble following plans and sticking to them, hence my preference for someone else managing it and just telling me what I need to do to fix it.

  • daveyadams
    daveyadams Posts: 43 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    I thought I was being clever by moving everything across to my Nationwide account which has no debt associated with it...
    or so I thought...
    I do however have debt with Virgin Money who, I forgot, have now been bought by Nationwide 🤦‍♂️
    Will Virgin Money be able to take money from my Nationwide account now they have merged or will it take time before they are able to do that?
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