Urgent Advice for Crisis Funds

Gregory14

kimwp said:

Remember to pause your dmp payments so you can build up an emergency fund to avoid being in this situation again.

Good thinking! Hopefully I can pause it for a few months to build an emergency and pay off the overdraft. I’ve been in the DMP for almost a year and things have been smooth sailing and settled until this month. Thank you for this! ☺️ 

Gregory14

DankVielen said:

Gregory14 said:

I’m very embarrassed posting this but I don’t know what to do, I’m hoping someone may have some advice. 

I’m in a lot of debt and have a DMP with payplan. This month has been a disaster with lots of unexpected bills so I currently have 49p in my bank until 26th June… and not all bills are covered yet either. I was just in the middle of applying for a payday loan out of sheer desperation but I talked myself out of it as I realise it will only make things worse in the long run.

I’ve applied to my local council for a welfare grant but that was declined. 

I’ve called payplan and there’s nothing they can do to help.

Any ideas or advice on where I can get some emergency help please? 

Has anybody’s bank ever agreed to a temporary overdraft increase or something similar?

Thank you in advance! 

You do not say whether you are working or on Universal Credit?

If it is the latter then Crisis Loans were replaced with Budgeting Loans I think

https://www.gov.uk/budgeting-help-benefits

Local Councils have discretionary funds for things like new shoes, coat and some other essentials.

You can get a referral for food bank support from a social prescriber, ask your GP if they can refer you to one.

Clearly the DMP is not working, so you need to switch to a self managed DMP where you pay NOTHING, typically people create an emergency fund by not paying any of their debts, waiting for the default letters and then waiting for an offer of 60% off by the Debt Consolidator the debt was sold to.  If the DC takes too long to get that offer made the debtor decides to ride it through to 6 year statute bar.

The mistake you might of made was assuming that any of the lenders or people that manage DMP's (including Charities) are decent people, they are all in it for themselves.

People fall into the fallacy that one day they will repair their credit record and all will be wonderful again, when actually the best thing is to not have credit at all, except if you have a mortgage perhaps.

From what I have read on here if you have a mortgage you will just revert to their standard variable rate, they will not force a sale, moving might be tricky.

If you do not own property or need to buy a car on finance then why pay a penny, they did not lend you money they worked for, they invented it on their computer. It should have been zeroed out when lender sold the debt.

I have been in your situation, lived off cream crackers and water.

If you have anything you can put on eBay or Gumtree to sell then maybe do that.

I do not buy new things these days, I get gifted items from Freecycle.

I hope something here helps.

Thank you so much for all of this! 

I’m not on benefits so not entitled to a budgeting loan and I applied for the discretionary fund with my local council and my application was refused. 

I’ve seen people talking about not paying their debts and it really has made me curious.l… it can’t affect my credit rating more than it already is ruined. The only thing is, I want to be debt free as soon as possible. I don’t have a mortgage and I own my car - I started the DMP just after I finished paying the finance so that my car wouldn’t be at risk.

Definitely going to have a sort out over the weekend now that my head is a little less heavy and get listing things on Vinted. Really appreciate your advice.

enthusiasticsaver

Pause the DMP as you need emergency funds to stop you being in this position again.  I understand you want to be debt free but you cannot pay so much towards the debt that you have nothing left to live off. Self manage maybe if you are able to and start up the DMP again when you have some emergency savings behind you. 

Are any of the bills due between now and the 26th June non priority?  If so contact them to say you cannot pay for now. 

Do not take out payday loans. 

Sell anything to get you some temporary cash and explore local food banks. 

Emmia

Gregory14 said:

sourcrates said:

Do you work? has your work got any financial assistance available?

My employer will give a set advance of £175 if times are hard, and you don`t have to pay it back.

Any friends or family that can help?

I work for the NHS. My trust has something called City Save and Salary Finance but both options are payroll loans which I’m not entitled to due to the DMP. 

I have emailed the finance team to ask if they offer salary advance so I’m hoping I hear back on that on Monday 🤞🏼

A salary advance may help this month, but it robs you in future months.

Is the car worth selling, to buy something cheaper? You paid off the finance, so it is an asset that you could sell if needed.

No car would also mean no costs for maintenance, insurance, fuel... But would mean you'd need to walk, cycle or get public transport to work.

powerspowers

Why did the council turn you down and can you appeal? They are all different so it’s hard to give general advice. 

Glad you’ve got a few things sorted. Do you have any supermarket points you could cash in? 

DankVielen

Gregory14 said:

DankVielen said:

Gregory14 said:

I’m very embarrassed posting this but I don’t know what to do, I’m hoping someone may have some advice. 

I’m in a lot of debt and have a DMP with payplan. This month has been a disaster with lots of unexpected bills so I currently have 49p in my bank until 26th June… and not all bills are covered yet either. I was just in the middle of applying for a payday loan out of sheer desperation but I talked myself out of it as I realise it will only make things worse in the long run.

I’ve applied to my local council for a welfare grant but that was declined. 

I’ve called payplan and there’s nothing they can do to help.

Any ideas or advice on where I can get some emergency help please? 

Has anybody’s bank ever agreed to a temporary overdraft increase or something similar?

Thank you in advance! 

You do not say whether you are working or on Universal Credit?

If it is the latter then Crisis Loans were replaced with Budgeting Loans I think

https://www.gov.uk/budgeting-help-benefits

Local Councils have discretionary funds for things like new shoes, coat and some other essentials.

You can get a referral for food bank support from a social prescriber, ask your GP if they can refer you to one.

Clearly the DMP is not working, so you need to switch to a self managed DMP where you pay NOTHING, typically people create an emergency fund by not paying any of their debts, waiting for the default letters and then waiting for an offer of 60% off by the Debt Consolidator the debt was sold to.  If the DC takes too long to get that offer made the debtor decides to ride it through to 6 year statute bar.

The mistake you might of made was assuming that any of the lenders or people that manage DMP's (including Charities) are decent people, they are all in it for themselves.

People fall into the fallacy that one day they will repair their credit record and all will be wonderful again, when actually the best thing is to not have credit at all, except if you have a mortgage perhaps.

From what I have read on here if you have a mortgage you will just revert to their standard variable rate, they will not force a sale, moving might be tricky.

If you do not own property or need to buy a car on finance then why pay a penny, they did not lend you money they worked for, they invented it on their computer. It should have been zeroed out when lender sold the debt.

I have been in your situation, lived off cream crackers and water.

If you have anything you can put on eBay or Gumtree to sell then maybe do that.

I do not buy new things these days, I get gifted items from Freecycle.

I hope something here helps.

Thank you so much for all of this! 

I’m not on benefits so not entitled to a budgeting loan and I applied for the discretionary fund with my local council and my application was refused. 

I’ve seen people talking about not paying their debts and it really has made me curious.l… it can’t affect my credit rating more than it already is ruined. The only thing is, I want to be debt free as soon as possible. I don’t have a mortgage and I own my car - I started the DMP just after I finished paying the finance so that my car wouldn’t be at risk.

Definitely going to have a sort out over the weekend now that my head is a little less heavy and get listing things on Vinted. Really appreciate your advice.

People seek a DMP when they can't manage their debts, you make a very good point that your credit rating is already ruined, chances are there has been irresponsible lending, making a reduced contribution without the debt defaulting just resets the statute bar date.

The debt is unsecured, so nobody is going to be able to grab your car or any other assets.

I found that creditors defaulted and sold the debt relatively quickly once I put in writing that my circumstances had changed and I would not be making any further contributions to the debt.  I sent the same letter to every creditor and all but one responded in the same way.

Default letter saying agreement was terminated, debt has been sold to DC and no more interest would be added.

The Debt Consolidator sent a letter saying they had bought the debt and it would be managed by XYZ Debt Manager, who instructed debt collection firms every 3 to 6 months.  At the time I was going through quite a lot and so I put all the letters in a carrier bag (not sensible), now I would recommend a lever arch file with a section for each debt and letters from the default notice stored chronologically in each section.

Bizarrely the Debt Collection Firms were not instructed in same order, so when I was eventually filing these I could see that they would be sending the same series of letters.

They took too long to offer me 60% off so by the time they did I felt I might as well wait out the 6 years.

Only one consumer debt sought a CCJ but they had done no appointing of a debt collector, just a debt manager who did nothing other than tell me they had been appointed. I had two Debt Solicitor firms chasing the CCJ and making all kinds of threats, but they got nothing either. 

Debts are now all statute barred or beyond the 6 year enforcement period of a CCJ.

Some debts were sold by the DC to another firm despite being Statute Barred, I got them shut down by filing a complaint to the FOS and FCA.

Two more debts were sold by their (different) DC despite being Statute Barred, I am in the process of making another complaint but delaying until I have determined where they are going, so far two debt collectors have been instructed and I suspect this latest one will try to get a CCJ on a Statute Barred Debt.  I will defend it if and when it happens and I am gathering evidence from this and other consumer debt forums that this is widespread common practice for the DC.  Then I will file complaints again as they are totally breaching numerous FCA CONC rules and the FCA Consumer Duty.

So you can dump payplan, do a self managed DMP which really is just a matter of filing the paperwork and watching out for a real letter before action, sadly there are some firms faking different aspects of getting a CCJ.

In my experience different firms have their own policies for going for a CCJ, credit unions do not seem to go through the malarkey above, they tend to go for CCJ's quite early once you stop paying, so you can come to an agreement with them or let them get a CCJ if you don't care.

The creditors will have an alert on the credit reference database, if you show spending or borrowing activity it will make them think that you are worth pursuing for a CCJ.  On the other hand if all they have is your current address (which I seeded deliberately at an address I want them to have by applying for credit I know I will not get) then all they see is evidence of all the other debt on your credit file with no debts being satisfied.

The timing of the firm going for the CCJ seemed to match when my bank lowered my overdraft, they had assured me they would not be doing any credit checks but they did and this made the DC think if they were prepared to allow me to have that overdraft then they must be aware of some income.  I did not want this to happen again so I got the overdraft paid off, I still have it but they have not sought to reduce it since.  If they did notify me of a reduction I would ask them to cancel it.

I kept off radar throughout the period when the debts were enforceable, I always made sure I got the mail.

This chap shows how easy it is to defend a CCJ, that is assuming that they send it to your current address, which is why I used the address of friends and/or redirection services, so i would always see any real legal threats.

https://www.youtube.com/watch?v=P3JCOuMPl1o