Urgent advice. DMP now or default first. Please help on a plan

sourcrates

"Device plans" are one of the lowest priority non essential debts out there, stop paying them, let them default, in about 2/3 years some bottom end debt collector might try to contact you about them.

Your rent and CT arrears are priority debts here, get them sorted whilst you retain payment on the rest of them.

Once you have done the above, and have a nice emergency fund saved, then choose what to do, you may have to keep paying the credit union loan, as some of them can go straight to legal action if more than a couple of payments are missed.

Then, if you feel like a challenge, you can easily self manage this, or if not, let stepchange do it.

Nothing to be scared of, its only money, there may be some argy bargy at first, but your not going to get your local manager of Santander knocking on your door with a baseball bat demanding money now are you.

No of course not, it will all be terribly British and terribly polite, you`ll get letters asking you to "please pay this now".

Once in an arrangement all will go quiet again and tick along nicely.

josephine82

Based on your SOA that does seem to be missing quite a few bits (contents insurance, TV licence, bills, dental, clothing, etc) and the potential of fluctuating income, it seems that there isn’t enough wiggle room in your budget to keep going as you are, so the strategy suggested of stopping paying unsecured debts for the foreseeable future seems the best approach.
 Use the breathing space to pay off your rent arrears and the council tax debt and build an emergency fund.
Wait for the remaining debts to default (this won’t happen immediately) and build up your savings to make offers to settle the debts down the line. 

Dont worry, you aren’t the first person in this situation and you won’t be the last. 

Holyt

sourcrates said:

"Device plans" are one of the lowest priority non essential debts out there, stop paying them, let them default, in about 2/3 years some bottom end debt collector might try to contact you about them.

Your rent and CT arrears are priority debts here, get them sorted whilst you retain payment on the rest of them.

Once you have done the above, and have a nice emergency fund saved, then choose what to do, you may have to keep paying the credit union loan, as some of them can go straight to legal action if more than a couple of payments are missed.

Then, if you feel like a challenge, you can easily self manage this, or if not, let stepchange do it.

Nothing to be scared of, its only money, there may be some argy bargy at first, but your not going to get your local manager of Santander knocking on your door with a baseball bat demanding money now are you.

No of course not, it will all be terribly British and terribly polite, you`ll get letters asking you to "please pay this now".

Once in an arrangement all will go quiet again and tick along nicely.

Thank you, appreciate this. So you are saying stop paying the device plans, carry on paying all the minimums on the credit cards? I will be up to date with Rent in December. CT will be agreed at 200 per month till cleared. Just not sure if should default on all the credit cards. I assume having 5 defaults is better than  7 or 8?
I am pretty sure i will pay the credit union. 

Holyt

josephine82 said:

Based on your SOA that does seem to be missing quite a few bits (contents insurance, TV licence, bills, dental, clothing, etc) and the potential of fluctuating income, it seems that there isn’t enough wiggle room in your budget to keep going as you are, so the strategy suggested of stopping paying unsecured debts for the foreseeable future seems the best approach.
 Use the breathing space to pay off your rent arrears and the council tax debt and build an emergency fund.
Wait for the remaining debts to default (this won’t happen immediately) and build up your savings to make offers to settle the debts down the line. 

Dont worry, you aren’t the first person in this situation and you won’t be the last. 

Thanks for the reply. I dont have TV Licence, I have youtube and share a Netflix account. Dont really buy clothing either. So the strategy is

1. Rent arears cleared in December.
2. Continue making payments to CT by 200 per month.
3. Stop all payments to phone debts/credit cards. 
4. Save emergency buffer.
5. Accounts default.
6. Set up standing order to each debtor on a plan that I want to make, not be forced into paying more unless I recieve a letter before action. 

Out of interest, a good question I thought of. 
Is it better to pay the minimums on my longesr credit card I have had for 10 years which will maintain some history in years to come instead of having a thin file when the defaults drop off?

sourcrates

I meant stop paying the lot, with the exception of the credit union loan and your other essential payments.

Save up some money, then decide what to do about a DMP, either do it yourself, or go with a debt charity.

You have to start these things from a secure position, ideally with a little money as back up, you can`t do that whilst your robbing peter to pay paul, so you have to stop paying everything, except the credit union, then once you are in a better position financially, start the DMP .

RAS

sourcrates is right, regarding your unsecure consumer debts.

Your current payment priorities are !!!!!! about face 

Your absolute priority is to pay down you rent arrears. Because if you owe more than one month's rent you have no defence against an eviction notice, check with the renting and buying forum here.

Council Tax is another priority. It looks like you have an arrangement to pay off your debts there, so paying that is essential.

Once your rent is up to date, pay your essential debts and the CT arrears and try and negotiate with the credit union. They may accept a reduced monthly payment over a longer period.

Any money left over after that needs to be transferred to an instant access ISA so you accrue a decent emergency fund before your non essential debts default

Holyt

RAS said:

sourcrates is right, regarding your unsecure consumer debts.

Your current payment priorities are !!!!!! about face 

Your absolute priority is to pay down you rent arrears. Because if you owe more than one month's rent you have no defence against an eviction notice, check with the renting and buying forum here.

Council Tax is another priority. It looks like you have an arrangement to pay off your debts there, so paying that is essential.

Once your rent is up to date, pay your essential debts and the CT arrears and try and negotiate with the credit union. They may accept a reduced monthly payment over a longer period.

Any money left over after that needs to be transferred to an instant access ISA so you accrue a decent emergency fund before your non essential debts default

Thanks Ras I appreciate it.
Is it worth me keeping one credit card open and pay the minimums so I dont have a thin credit file in years to come and just maintain one credit? The capital one has been opened 10 years ane never missed it. I doubt a 60 per momth to them would make a difference and save me in the long run?

Smudgeismydog

I’m sure most of us on here would suggest you learn to live without access to credit, this is what your emergency fund or rainy day pot is for. 

Rob5342

Holyt said:

sourcrates said:

"Device plans" are one of the lowest priority non essential debts out there, stop paying them, let them default, in about 2/3 years some bottom end debt collector might try to contact you about them.

Your rent and CT arrears are priority debts here, get them sorted whilst you retain payment on the rest of them.

Once you have done the above, and have a nice emergency fund saved, then choose what to do, you may have to keep paying the credit union loan, as some of them can go straight to legal action if more than a couple of payments are missed.

Then, if you feel like a challenge, you can easily self manage this, or if not, let stepchange do it.

Nothing to be scared of, its only money, there may be some argy bargy at first, but your not going to get your local manager of Santander knocking on your door with a baseball bat demanding money now are you.

No of course not, it will all be terribly British and terribly polite, you`ll get letters asking you to "please pay this now".

Once in an arrangement all will go quiet again and tick along nicely.

Just not sure if should default on all the credit cards. I assume having 5 defaults is better than  7 or 8?

Once you have got 5 it's going to be difficult to get any sort of credit, so having 7 or 8 isn't going to make much difference. It's best to go all, learn to live without credit and get everything sorted in once and for all. 

Grumpelstiltskin

Smudgeismydog said:

I’m sure most of us on here would suggest you learn to live without access to credit, this is what your emergency fund or rainy day pot is for. 

This 100 times over. If you leave one credit card open it is the top of a slippery slope, so don't go there.

You need to completely change your mindset, you do not need to use credit if you get into the position where you have savings, OK maybe in your eyes an old fashioned idea but it works and you don't have the worry you have now.