Add 65k debt to mortgage, dmp, or something else?

DankVielen

Thanks @Kittymumof4 for your detailed replies.

I have a lot of sympathy for people who raise children with special needs as I have done so myself, I am sure like most parents you would like your charges to be independent and playing their part in our society, even though this may seem like a big ask, but it happens.

I don't think anyone here will be able to help you with debt until you post that SOA, it should not take more than a few bank and credit card statements, it is a critical starting point.

You can't manage what you do not track, also this gives you ownership and accountability, even if only to yourself.

I have seen such helpful advice here from others to others and they can really help you deal with this once and for all.

You might need a "can do" approach to things and it is not forever, just until you get things under your control.

It is a great feeling to be in control, even if it seems like a mountain to climb right now, just focus on the next stage.

Kittymumof4

DankVielen said:

Thanks @Kittymumof4 for your detailed replies.

I have a lot of sympathy for people who raise children with special needs as I have done so myself, I am sure like most parents you would like your charges to be independent and playing their part in our society, even though this may seem like a big ask, but it happens.

I don't think anyone here will be able to help you with debt until you post that SOA, it should not take more than a few bank and credit card statements, it is a critical starting point.

You can't manage what you do not track, also this gives you ownership and accountability, even if only to yourself.

I have seen such helpful advice here from others to others and they can really help you deal with this once and for all.

You might need a "can do" approach to things and it is not forever, just until you get things under your control.

It is a great feeling to be in control, even if it seems like a mountain to climb right now, just focus on the next stage.

Thank you so much, it's certainly a challenge isn't it. It's the main thing I'm struggling with, I know that it would be helpful to have everyone in the family on board but I think trying to talk to my son about it all will cause more stress as once he has something in his mind he won't let it drop. And my older child knows that we're under pressure financially and we've had lots of conversations about overdrafts and loans, but she's a young carer to my son and myself and I don't think it would help anyone to give her all of the details. 

And then of course it makes it difficult to help him understand why we can't do some of the things he's used to doing. 

It does feel like a mountain, and I've been so stressed about it, but yes, I do need to focus on the next steps now. 

I've posted the SOA in another post, I think it's titled 'SOA please help' and I've managed to make a plan with lots of much appreciated support here. It still feels like a crisis and such a long and huge task, but I'm so glad that I found this forum and that people like you are so kind enough to offer support. 

josephine82

Wanted to add a couple of suggestions just around groceries and food shopping this month; get yourself onto the Olio app and see what is available near you. I’m often so surprised at the good nature of people just giving stuff away for free that they can’t use and don’t want to throw away. For example, I’ve just had a look and there is someone giving away a 4 pint of milk, a few loaves of bread they can’t fit in their freezer, a whole birthday cake etc. It’s not going to replace your food shopping, but might help you through some tough days. 

Hope this helps x 

Kittymumof4

Hi, after seeking advice here, I have set up a new bank account and in the process of cancelling payments on our huge credit card debts (70k) in readiness to start a self managed DMP. 

Some of our direct Debits haven't changed over to our new bank in time for June payments including our mortgage. 

Our old bank account is nearing going over to our un-arranged overdraft and all of our income is now due to be paid into our new account. 

I have a few questions.

For this month do I transfer enough money over to the old account to cover the essential direct Debits due to go out of that account? 

As we will not be making any cc payments this month, how long will it take for this to show on our credit rating? 

What will happen with our old bank account with the overdraft? We have car breakdown cover with them at the moment and I'm not sure if they will freeze the account or something as soon as credit cards stop being paid? Do I need to buy breakdown cover now as this is essential for us or will it take a while for this to be cancelled by the bank? AA have a sale on at the moment so I'm not sure if I should go ahead with this. 

Once all direct Debits are changed to our new account, do we just ignore our old bank account then? So the overdraft becomes another debt? What will happen with this account? Will they close it? 

Grumpelstiltskin

OP Please stick to one thread, then it's much easier for people to answer you.

Kittymumof4

Hi, after your advice here, I have set up a new bank account and in the process of cancelling payments on our huge credit card debts (70k) in readiness to start a self managed DMP. 

Some of our direct Debits haven't changed over to our new bank in time for June payments including our mortgage. 

Our old bank account is nearing going over to our un-arranged overdraft and all of our income is now due to be paid into our new account. 

I have a few questions.

For this month do I transfer enough money over to the old account to cover the essential direct Debits due to go out of that account? 

As we will not be making any cc payments this month, how long will it take for this to show on our credit rating? 

What will happen with our old bank account with the overdraft? We have car breakdown cover with them at the moment and I'm not sure if they will freeze the account or something as soon as credit cards stop being paid? Do I need to buy breakdown cover now as this is essential for us or will it take a while for this to be cancelled by the bank? AA have a sale on at the moment so I'm not sure if I should go ahead with this. 

Once all direct Debits are changed to our new account, do we just ignore our old bank account then? So the overdraft becomes another debt? What will happen with this account? Will they close it? 

fatbelly

You are waving goodbye to the old account. No more money goes into it. Up to them what they do with it.

Late payments will show next month but defaults likely 3-6 months

You will need standalone breakdown cover. Ask on the motoring board?

debtfreewannabe321

Hi Kitty I can hear your stress in your posts. Lots of us have been through this and live to tell the tale, it will be okay. Now that you have done the scary part, made the decision to do this, I would suggest calling all those who needed a DD from your old bank account and changing it to the new one ASAP, perhaps they can take a payment over the phone? Have you manually cancelled all DDs going to the CCs. When I swapped from my old bank account (with a huge overdraft) to a basic one (I went with the co-op) I left with two or three DDs and just left the OD to continue adding fees and all the CCs and loans to default. I went through step change for my DMP (not sure if they're still around?) as I didn't know about self managed DMPs. And considering my mental health was not great I am glad they managed it for me.

Be ready for all the calls and emails, and letters, and texts from creditors. Get ready to not answer, ignore, and remember to breathe, it will be okay. 
Many of my debts got sold on and I managed to pay a few off quickly once I stopped paying monthly amounts (small catalogues I had if I remember rightly) and then a few bigger ones I paid like 50% and I was just left with a few big ones then. 
It might feel scary but you'll feel relief once you settle into the new normal of not paying every spare penny you have over to them and spiraling into more debt as you go. The DMP affected my credit score for 6 years and even then when I tried to get a mortgage I had to go with a lender who took people on with bad credit. However I was about 10 years on when my credit score was back to near perfect. You already have a house and I believe you've just fixed your mortgage for a few more years? So it will be okay if you keep up that one payment....

A few things I did to help myself-
-The grocery challenge. EVERY month. Others in the same position made it feel fun and not like a chore. 
-No spend day challenges
-I made a diary on here (it's probably still on here years on!) I made friends on here too as many are in the same boat.
-I stopped buying online (one cause of my debt was compulsive shopping)
- I bought clothes from charity shops and made do
- Swapped mobiles to very cheap tariffs
- Made a concerted effort to reduce electric and gas outgoings
- Found free days out for me and the kids (I was lucky they were still quite small when I went through this, small kids are less demanding and love the park and picnics!)
- I started meditating because my mental health was dire. I also ignored all calls and letters after a while because I would end up sobbing and having panic attacks. This helped my MH too. 

I'm sending you lots of strength, the first few weeks/months are always the hardest as you adjust and try to not panic about falling into defaults...but you will be okay there is a wealth of info from people in similar situations on here. Good luck 🫂

kimwp

For the direct debits that won't switch over in time-

If the unarranged overdraft is available and will fund the direct debits, you may as well leave that to pay them as your overdraft will just become another debt on your dmp. But I'd keep an eye on your account that day and be ready to call the company to make a manual payment.

Or you could try ringing the companies and paying the direct debits amount over the phone 4-5(?- call to ask them what the best timing is) days ahead of when it's due. Check with them that this means that the DD amount will be zero.

I had a breakdown recently, joined the AA and they arrived within 40 mins. £150 to be rescued as soon as I joined. I paid for a full year, but in retrospect I should have opted for the pay monthly and cancelled - but even so, £240 over 14 years of driving is pretty good. Depends how reliable your cars are though.

kimwp

NB, you can tell your creditors that they can only contact you in writing if you don't want to get calls from them. They have a duty of care to help you avoid defaulting, so they will be reaching out, but it's not personal, it's just process.