Questions on DMP

Grumpelstiltskin

SC means Stepchange.

OK it is possible that down the line you could get a door knocker, that is all they are they are not bailiffs so you treat them like a double glazing salesperson, tell them you are not interested and close the door.

Get your SOA done and then when we see that we can give you the best advice.

sourcrates

debtmumof4 said:

What does SC mean sorry?

I haven't had chance to go through the SOA yet, I will do this 

if we get out accounts Defaulted, and we are still  in the DMP for 15+ years, can we still move house (currently own) in 6/7yrs once the default is off out accounts? or will it still show DMP?



this is my husbands biggest worry, as although we own our house, the choice of not being able to move for 15+ years doesn't sit right with him .

also husband is worried that the credit card companies can sell the debt onto  Debt collectors and we will have them knocking at the door, what are the chances? 

As debt management is an informal arrangement, there is no specific marker applied to your credit file, only the actual default of the accounts in your DMP, which as you say, will disappear after 6 years regardless of anything else.

The basic idea of a DMP is to pay a reduced amount on a monthly basis, but also alongside that to save an emergency/settlement fund so that when your debts are sold, and settlement offers come your way, you can take advantage of them, thus reducing the time you remain in debt.

Debts are sold to debt purchasing companies, not debt collectors, they may then be assigned to a collector by the new owner, but that just means you pay them instead, its simply a change of ownership, everything will tick along just fine as long as you are maintaining payments.

Debts are sold all the time, you are always informed in writing, so you just pass that letter to stepchange if they are acting for you, or if your doing it yourself, you just pay the new collector as instructed in the letter, its all very underwhelming and very simple to do.

ManyWays

SC = StepChange. They wont do a self-employed DMP, but PayPlan are similar and they can. 

if we are still in the DMP for 15+ years, can we still move house (currently own) in 6/7yrs once the default is off out accounts?
It will be hard and expensive, because a mortgage lender looks at your bank statements just as much as your credit records, and even if your credit record is "clean", your bank statements will show payments to PayPlan (or to the individual debt collectors if you are doing a DIY DMP)

the choice of not being able to move for 15+ years doesn't sit right with him
Hopefully your DMP will be quicker than that! A combination of your incomes going up, some affordability complaints at the start, some settlement offers later on.

But what other choice do you have? Lets see your SOA, and people may be able to say if you could muddle through without defaults or if an IVA would be a good idea. 

also husband is worried that the credit card companies can sell the debt onto  Debt collectors and we will have them knocking at the door, what are the chances? 
Very low in an organised DMP. A bit more early on in a self managed one when you are waiting for them to default. But these debt collectors have no power, you dont have to open the door to them 

obviously, 90k worth of debt, we have heavily relied on credit cards for everyday life, the fear of loosing the security is scary, especially with husband being self employed. 
This is why its important to save an emergency fund fast at the start. If you go through Payplan you want to push for a very comfortable budget you know you can live within. Its better to have very comfortable budget and a DMP that says 15 years at the start rather than stretch to pay more so its only 13  years but you end up borrowing more

RAS

It is essential that you stop paying the creditors and save everything you can into an emergency fund.

You really, really need an SOA if you have self employment. Your steadier employment gives you a bit of stability but you absolutely have to know how much you need for essential spends any month and that your worst months can cover the absolute basics.

That means accepting that you buy clothes and shoes in a good month. That you buy any presents for the children well before their birthday and Christmas as December and January can be lean.

And you have at least a month's mortgage and spends saved before you even think of making more than token payments towards fully defaulted debts.