DMP Newbie - Help please!

Diamonds34

Hi all, just looking for some advice please on a DMP. I’ve read through many of the threads on here which have been great and have helped me understand that I can get myself out of this bad situation. I just want to clarify a few things. 

1. I understand it’s recommended to default before entering a DMP, to build up an emergency fund and avoid an arrangement to pay on your credit file. Is it worth applying for the Breathing Space scheme first? Or is that pointless? 
2. I have around £53k debt across 8 credit cards (gosh that sounds scaring telling someone!). Would it be best to setup a DMP with each one as and when they default? Or do I wait for all of them to default? 
3. What effect on your credit file have people had? My mortgage renewal is due in 4 years. I’m worried about this causing issues at the time of renewal, mainly because my husband is unaware of the amount of debt I currently have. Also what is the effect on something like taking out a new mobile phone contract? Has anyone has any issues with this?
4. As mentioned above, my mortgage renewal is in 4 years. My husband also has some credit card debts too, if he was also setup a DMP, would this cause more issues at the time of renewal? 
5. Once I’ve received the official notice that the account is defaulted, what is the next step? Do I just wait for the DCA to contact me? Then tell them what I’m going to pay? 
6. I have 2 credit cards with Santander. 1 is still in the 0% interest period (until March 2026) Do I default on this one, or wait until the promotional period ends? Or will they hold off defaulting the interest one of they see I’m still paying the one with no interest. 
7. Say for example I stop making payments and build up a decent fund. If I have an account that hasn’t defaulted yet, would it be worth just paying it all off if there’s enough in the fund?
8. I have credit cards with the following:

• MBNA
• Barclaycard
• Santander
• Virgin Money
• M&S Bank

What are people’s experiences with these companies when going through the DMP process?  

Sorry for all the questions! If you’ve read this far then thank you! Feel free to only answer a few questions if you can’t answer all. I really appreciate any help. I have 2 toddlers and I really want to be financially stable for them. I’m determined to get myself out of what feels like a never ending stress and worry in my life.

Thank you so much

RAS

Do you have any accounts other than the mortgage with your husband?

Diamonds34

We also have a joint account which we use to send the mortgage payments and house bills from. 

fatbelly

Then his credit file will be affected. I think what concerns us is that he is unaware of what is coming.

As a homeowner, your choices are between dmp and iva. How much can you afford to pay to your debts, per month, as things stand?

ManyWays

My personal thoughts:

 Is it worth applying for the Breathing Space scheme first? Or is that pointless? 
Debt advisers say its better to keep a BS for when its really needed, bailiffs, repossessions etc, as you can only have 1 a year. But I think they can be useful here as they get interest stopped for 2 months with no contact from the creditors, so if you have stopped paying (pointless if you dont) then thats 2 months you can save up some money and 2 months in arrears which helps to get a default. Also it tells your creditors that you really do have problems, you havent just forgotten to pay them...

I have around £53k debt across 8 credit cards (gosh that sounds scaring telling someone!). Would it be best to setup a DMP with each one as and when they default? Or do I wait for all of them to default? 
You need to work out what you will offer to each. Then you can offer that amount as they default. Dont try to think of each individually, get a plan for all the offers and put that into action as they default

What effect on your credit file have people had? My mortgage renewal is due in 4 years. I’m worried about this causing issues at the time of renewal, mainly because my husband is unaware of the amount of debt I currently have.
You will hopefully get 8 defaults very soon, that will be a wrecked credit record. It wont be a problem if you just want a new fix, but it will make it likely impossible to borrow or or to move lenders. The danger about your husband not knowing is this may come as a nasty shock if he finds a cheaper mortgage elsewhere and you have to explain why its not possible. 
Also you need to close the joint bank account and even after that his credit rating may be a bit impacted because of the joint mortgage. And with 8 credit cards and default letters arriving by post, there is always the chance he will see one. 
Its often the long-term deceit that matters more than the actual debt amount so I suggest telling him now, as you have a plan.

Also what is the effect on something like taking out a new mobile phone contract? Has anyone has any issues with this?
Mobile companies are less fussy than most lenders but you may find this hard. Plan to get a sim only contract instead.

As mentioned above, my mortgage renewal is in 4 years. My husband also has some credit card debts too, if he was also setup a DMP, would this cause more issues at the time of renewal? 
No more issues if you both have a DMP. This is another good reason to tell him, he cant be horror-struck that you have debts when he has too, and you have a plan that may also work for his debts. Better to get them all sorted out now, than for you to start on yours now and he start in a few years.

I have 2 credit cards with Santander. 1 is still in the 0% interest period (until March 2026) Do I default on this one, or wait until the promotional period ends? Or will they hold off defaulting the interest one of they see I’m still paying the one with no interest. 
You want defaults as soon as possible, so I suggest defaulting now

Say for example I stop making payments and build up a decent fund. If I have an account that hasn’t defaulted yet, would it be worth just paying it all off if there’s enough in the fund?
Good to look at your options at the time but the reason to build up a fund is so you can make lower offers to debts that have been sold

I have credit cards with the following: MBNA Barclaycard Santander Virgin Money M&S Bank
They all look like normal credit card lenders, nothing particularly difficult. You should expect them all to freeze interest

@fatbelly's point about your choices being a DMP or an IVA is because 53k of debt is a lot. How large are your partners? Really it would be good to see a joint Statement of Affairs for both of you, all of the debts.

RAS

You really do need a joint Statement of Affairs, to see what the family situation is. You don't need to tell us but you need to understand how your debt has accrued and how much your husband's is and how he got into debt.

Is this keeping up with the Jones, a hangover from lost income in Covid, living beyond your means, picking up the tab when you partner's income couldn't or a result of substance use? We've seen £300 per month booze budgets, what was effectively financial abuse and more recently debt accrued supporting a child competing sport at international level. 

Not telling your partner isn't a long term option. You needed to close that joint account before you stop paying creditors anyway. Your partner needs to have sensible expectations about the mortgage renewal and they can't plan for reduced family funding if they don't know that you can't make a large (credit funded?) contribution to big ticket items. 

You need to trust one another more than ever in this situation and failing to disclose destroys trust when you need energy to work together.

Scarlet_to_Black

Just a point I took from this…your hubby has credit card debt as well, you don’t know if he is in the same stressed out, scared to admit the scale of his debt, too. Get it all out in the open. I imagine he will be relieved that you already have taken control and have a plan in place. 

Rob5342

My thoughts having been through the process:

1, Breathing space seems a bit pointless to me. You want the creditors to give up on you and default you so you can get on with the DMP, breathing space wouldn't help that and could potentially slow it down.

2, It's up to you really. If you want to build up more of an emergency fund then hold off for a bit, if you have enough saved when one defaults then you might as well start paying it.

3, Defaults will make borrowing more difficult. You are unlikely to be able to swtich mortgage to a new provider but there should be no problem switching to a new deal with your current lender as they normally dont do a credit check for that. I have four defaults and swtiched to a new Santander fixed rate with no problem at all.Phones contracts might be difficult but it depends how much it is, you could probably still get a new SIN only contract. You should be planning to live without any credit and put money aside for everything instead.

4,It shouldn't make any difference to renewing the mortgage for the reasons I mentioned previously, you are financially linked so it might make things even more difficult for you credit report wise, but again you should be planning to live without credit.

5, Yes pretty much. Have a budget worked out, save the money you have allocated for each debt and then redirect it to the DCA or whoever it is once defaulted.

6, I'd say it depends on how much you owe on it. If its low enough you might be able to pay that off without defaulting. That's what I did with a Tesco one that only had a few hundred pounds on it.

7, You need to look at the big picture and see what overall difference it might make, using £3000 to make a settlement on a £6000 defaulted would make more sense than using it to clear a £3000 non defaulted debt that you might be able to settle for £1500 later.

8, Barclaycard were brilliant with me and defaulted me very quickly. Virgin were a real pain in the **** and took ages to default. They should all be fine eventually and then you'll be dealing with whichever DCA they pass the debts on to.

I strongly suggest that you tell your husband, he will find out eventually as he'll wonder why you don't have enough money for a holiday, cant get a loan for a new car etc, so it's best to deal with the inevitable now. If you tell him then you can put you joint efforts into tackling it together instead of you putting all your efforts into keeping it from him. I kept everything from my wife so I know what it's like, but it was only after telling her that I actually got anywhere tackling the debts. I thought I could manage it myself but actually I needed her support. Telling yourpartner is a very daunting prospect, it has come up a number of times here and in most cases it hasn't actually been as bad as people feared it might be.