I think we are ready

mrscxxx

Hello, 
I have been doing lots of reading across the threads and now feel like I have alot of information and ready to take the leap into sorting our debt. 

Back story- me and my parter live in a housing association house, have 2 teenage children (1 adult child who does not live at home now). Our debts spiralled and kept on getting worse, taking loans to consolidate and then using credit cards again. Our wages were just covering the payments, so day to day living was going on credit cards. It's a vicious circle. Looking online I initially thought and iva was our only way out. But thanks to this forum, I think I can do a debt management plan.

Me and my husband share our finances, no secrets, we know each other's loans and credit cards, but I will separate them for the sake of the info to make sure it is the right decision. I'm hoping some one can give advice on whether I have the right plans, or if I have my head in the clouds and should go to stepchange (or similar) for iva help. We aren't proud of the debt we are in and know we have been stupid to let it get to this point.

We have around 60k of debt in credit cards and non secured loans. 

Plan-
Stop making payments. 

Await defaults (which can vary in time depending on the company. 
Once default notice has been issued contact the company (who ever has taken over/brought the debt) and offer small monthly payments. 

Whilst this happening, build money up for emergencies and to use later on to offer a settlement. 

The "plan" sounds easy, I'm accepting it won't be easy, there will be phone calls, letters, possible people knocking at the door and even possible ccj (if the process of ccj is started, I should contact the company, not wait). 

I have set up  a new account as we had a natwest account and natwest credit card.

I'm worried, nervous, scared...all the words. But am trying to look at this as being the start of the end. I/we never want to be in this position again.

Can any one let me know if my plan is right?

One question I do have, I haven't seen an answer (or missed it if I have seen it) Whilst we are saving for the emergency fund/money to pay for the settlement offer, is there a maximum that we can have. 

Thank you for advice/support that people write on this forum. It has really helped me to see a light at the end of the debt tunnel.

Grumpelstiltskin

Welcome to MSE.

Yes your plan is good, you must realize nothing moves quickly in debt collection.

Don't contact any of your creditors and don't answer any phone calls, texts or E Mails.

Block all phone numbers but do look at any letters you get by snail mail.

There is no limit to your savings, it would be a good idea to keep it in a savings account that will earn at least a small amount of interest.

Any CCJ threats would be way down the line and they are rare, you have the right idea that they must contact you by snail mail before anything happens.

Andyjflet

Usual advice and support on here should be accompanied with an SOA which is the in the DFW forum headings. Helps the very experienced people, who have all been on this journey like you, and me and will get the bigger picture, salaries etc. 

mrscxxx

Thank you both. 

@grumplestiltskin, I would love for this to be over quick, but am realistic that it will take a long time. I'm going to set up a folder and keep dates of what I'm doing/when so in months to come, I can look back at it.

@andyjflet Thank you for letting me know where the Sao is, I wondered where others were getting it from but never seemed to find a link. I have my own written on paper. But will use this one. 

sourcrates

The debt collection industry relies on smoke and mirrors a lot of the time, with threats of potential "further action" etc as a way to get you to keep paying, stopping your debt repayments will not result in the end of the world, in fact it will be quite underwhelming, not much will happen, a few letters, calls etc, not much else.

You appear to have the basic gist of things, just regard this as a process to complete, stage by stage, remove all thoughts of CCJ`s/debt collectors calling at your home, all that can be avoided, there is very little creditors can actually do to recover debts, they can go to court, but you can counteract that, once up and running a DMP is just about paying your debts at a reduced rate over a longer period of time.

Lenders/collectors are well used to this scenario, its nothing new, just treat it as a business venture and don`t allow it to interfere with your life.

As a side note, IVA`s are meant for homeowners as they have an asset to protect, but they can be quite restrictive and would involve re-mortgaging in year 5, a DMP is much less formal, and you run it as you see fit.
We don`t normally recommend IVA`s as they are quite a "niche" product.

2021rdsunshine

Your plan is great! And it sounds easy because it is easy as long as you stick to it. Don’t feel tempted to contact your creditors before debts default and return to this forum for advice anytime you need, there is quite a few very knowledgeable people who will help along the way. It might feel a bit overwhelming starting the process and getting letters and phone calls to start with but you can do a few things to help with that. For example prior to stop paying go on the creditors website and change your contact phone numbers to a burner phone number. I have done that with some of mine and it worked. If you can’t do that just ignore the calls and block the numbers, they eventually stop calling. You can also write to them saying that you request all communication by letter. Be organised and keep letters in a file so you know where you up to with each creditor. I can assure you it will get easier, don’t be scared. Good luck x

EssexHebridean

Welcome aboard! 

Remember that you can ask your creditors not to contact you by telephone at all - you are quite entitled to do that and it does mean it can take one element of the stress out of the process. Just pop something in writing to them explaining that from this point they are only welcome to contact you in writing, and that they should remove any phone numbers they may have for you from their records. 

fatbelly

mrscxxx said:

Hello, 
I have been doing lots of reading across the threads and now feel like I have alot of information and ready to take the leap into sorting our debt. 

Back story- me and my parter live in a housing association house, have 2 teenage children (1 adult child who does not live at home now). Our debts spiralled and kept on getting worse, taking loans to consolidate and then using credit cards again. Our wages were just covering the payments, so day to day living was going on credit cards. It's a vicious circle. Looking online I initially thought and iva was our only way out. But thanks to this forum, I think I can do a debt management plan.

Me and my husband share our finances, no secrets, we know each other's loans and credit cards, but I will separate them for the sake of the info to make sure it is the right decision. I'm hoping some one can give advice on whether I have the right plans, or if I have my head in the clouds and should go to stepchange (or similar) for iva help. We aren't proud of the debt we are in and know we have been stupid to let it get to this point.

We have around 60k of debt in credit cards and non secured loans. 

Plan-
Stop making payments. 

Await defaults (which can vary in time depending on the company. 
Once default notice has been issued contact the company (who ever has taken over/brought the debt) and offer small monthly payments. 

Whilst this happening, build money up for emergencies and to use later on to offer a settlement. 

The "plan" sounds easy, I'm accepting it won't be easy, there will be phone calls, letters, possible people knocking at the door and even possible ccj (if the process of ccj is started, I should contact the company, not wait). 

I have set up  a new account as we had a natwest account and natwest credit card.

I'm worried, nervous, scared...all the words. But am trying to look at this as being the start of the end. I/we never want to be in this position again.

Can any one let me know if my plan is right?

One question I do have, I haven't seen an answer (or missed it if I have seen it) Whilst we are saving for the emergency fund/money to pay for the settlement offer, is there a maximum that we can have. 

Thank you for advice/support that people write on this forum. It has really helped me to see a light at the end of the debt tunnel.

we don't have enough information to say.

If you post an soa, we can see what assets you have and how much surplus income is availablle As things stand, all we can say is that an IVA would be inappropriate

ManyWays

Let' see the SOA. Can you mark the debts as yours, your partners, joint? Its possible that insolvency (bankruptcy or a DRO, very unlikely to be an IVA) for one or both of you could be a simpler and quicker option. 

mrscxxx

Thank you for the replies. I will add a SAO tonight. 

RAS

One thing that may ease your concern is that creditors can't take legal action until the account is defaulted. They have a habit of sending letters advising you've defaulted after the first few missed payment, but that's misleading.

What you are waiting for is the letter terminating the financial agreement and demanding repayment of the entire sum within a time scale. No one expects you to pay it, but it is legally required. After the deadly be, the creditor will register the default on your credit record. That halts interest etc and is when you start making payments. 

Since it's also when creditors can take legal, that's when you start payments. Legal action costs money, accepting your payment costs nothing and achieves their aim. Most creditors chose the latter strategy.