Debt Advice - What is the process when defaulting and setting up a DMP?

Deeeirdre

Good Evening,

I am seeking advice on what to do next with my personal debts. They total around £30,000 and I cannot afford my repayments at all at any longer.

I was initially in contact with Stepchange, I applied for 'Breathing Space', which I realise may not have been the best thing to do but this ends on 01st August 2025. 

Stepchange failed to inform me that they were unable to help me in setting up a DMP, as part of my income is from being a self-employed (albeit small-time) landlord/ lady. It was only when I called them to add a debt to my Breathing Space that this was flagged. I was informed that I should have been flagged for this when filling in their online information, but this wasn't the case. The agent I spoke with was not very helpful. She referred me to Business Debtline, although none of my debt is business related, it is all in my personal name.

Anyhow, I have now cancelled all of my Direct Debits to my unsecured creditors, so I assume these accounts will all now begin to default over the next 3-6 months?

My main question is when do I then go about setting up the DMP? Should I be setting this up now, before my Breathing Space ends or should I wait to default on all of the debts? 

I also have a drinking problem, which has definitely contributed towards this mess. 

I have not missed a single debt payment for approximately 15 years, so defaulting feels extremely uncomfortable for me, but I am at breaking point now and out of options (the sad nature of debt!).

Been here (with much smaller debt) 20 years ago, and I got myself out with a good man + a job that I loved but the company I had given 12 years to (and I had re-located from London to Cornwall with, working remotely) cut us all loose at the very beginning of Covid (no furlough for me, we just had to use money taken out of the Buy to Let (money that was ear-marked for the next Buy to Let), so things have been slowly unravelling since early 2020 for me. I have never been good at budgeting but I don't live a lavish lifestyle either. I also became a 'property landlady' at the worst possible point in recent history (2016), my income from this is now minimal, yet it is a constant concern.

The good man in my life is still there, but his help is not without bounds! We have a joint bank account for our 'Buy to Let' stuff, this account is not linked to my other debts. Do we still need to close any joint accounts? We have 2 x Buy to Let mortgages together anyhow (also not linked to peronal debt, to my knowledge).

Please can one of you post up the link for a statement of affairs? I know that you can offer better advice with this info?

ManyWays

Business Debtline will help; they cover business and personal debts for people with a self-employed income or small limited companies.

Or you can talk directly to Payplan who provide DMPs for the self emplyed. They do tend to be a lot more pushy than StepChange are about suggesting you get an IVA, ask us if if they suggest this for you.

But I think Business Debtline is a better option for you as you need to talk to someone about how profitable this business actually is, and whether it would be better to sell a BTL. 

Deeeirdre

I found Business Debtline dfficult to navigate and it doesn't fit my circumstances (I have no business debt)..

Deeeirdre

Oooooh, just read your message in full - I am tied in with joint Buy to Lets, so not an easy option at all. Perhaps you are right, but I am trying hard to hold onto these assets/ income. These Buy to Let mortgage payments are never missed! Covered by the income at the moment...

Deeeirdre

I can't sell, as joint ownership :-( 

I  included my current partner in my 'Right to Buy' Not good!

RAS

ManyWays mentioned Payplan.

Have you considered DIY? Lots of folk here do it, although I'm not sure how many have functioning businesses alongside.

Talk to business debt line about your situation, business covering itself presumably, but consumer debts?

Do you have any joint accounts with your partner because that's going to be an issue. You default, and it affects your partner's credit record. Could you separate by each receiving one property's rent? And then settling up? You'd need some legal agreement.

Re booze, what support can you get? Alcoholics Anon is not for everyone but you may need support. 

Meantime, hope life improves.

sourcrates

Self managed debt management, easy peasy.

In a nutshell:

(1) wait for debts to default, in the meantime save an emergency fund.
(2) once defaulted, debts may be sold/assigned, whoever picks them up will write to you, most likely be some sort of debt collector, so you go to their respective website, and start making payments on a monthly basis.

No need to speak to anyone, share anything, send anything, its that simple.

Scarlet_to_Black

RAS said:

ManyWays mentioned Payplan.

Have you considered DIY? Lots of folk here do it, although I'm not sure how many have functioning businesses alongside.

Talk to business debt line about your situation, business covering itself presumably, but consumer debts?

Do you have any joint accounts with your partner because that's going to be an issue. You default, and it affects your partner's credit record. Could you separate by each receiving one property's rent? And then settling up? You'd need some legal agreement.

Re booze, what support can you get? Alcoholics Anon is not for everyone but you may need support. 

Meantime, hope life improves.

Just regards the giving up booze…I’ve just done this and I’m 116 days into my new sober life. Absolutely the best thing I could have done for myself. 

I joined a Facebook group not expecting much by a guy called Jason Currill and his programme, ‘Shrink the Drink’. It’s 30 days and cost me £20, but this is a one off payment and you have access to the resource for life. The FB group is ‘Life’s Better Without Alcohol’. 

I’ve gone from a bottle of red wine a night and more sometimes, particularly at weekends (which often started on Wednesday 🫣🤷‍♀️) to going full on teetotal. You would not believe the changes to your outlook and functioning that happen when you give up the poison 🙏

RAS

Congratulations on your success and wishing you more.

ManyWays

A BTL that is not generating a healthy profit and when you do not have any cash reserve to cover missed rent periods or work that needs doing on the property is an accident waiting to happen. 

Deeeirdre

RAS said:

ManyWays mentioned Payplan.

Have you considered DIY? Lots of folk here do it, although I'm not sure how many have functioning businesses alongside.

Talk to business debt line about your situation, business covering itself presumably, but consumer debts?

Do you have any joint accounts with your partner because that's going to be an issue. You default, and it affects your partner's credit record. Could you separate by each receiving one property's rent? And then settling up? You'd need some legal agreement.

Re booze, what support can you get? Alcoholics Anon is not for everyone but you may need support. 

Meantime, hope life improves.

Thanks so much for your advice - I am digesting it all at the moment.

Yes, we have a joint account for the rent coming in and 2 x mortgages going out. We will need to close this and organise the rent payments amongst ourselves and our individual accounts. Should be easy to sort, but thanks for flagging this. He doesn't use credit anyway historically, but I don't want to harm his credit if it can be avoided.