How to manage Large Deb- (DMP)?

Lamdj89

Hi, over time I have racked up a lot of debt (over 20k) between loans and credit card. I recently had to take a pay cut and struggling to keep on top of all payments. I don't have a partner or family to help and wondering what the best solution is to get on top of it all. I have been looking into DMP but hear this may not be the best solution. I'm worried about my credit report being damaged and the long term issue of getting a mortgage (which I would like to do in the next 3 years). Any advise would be welcome

fatbelly

I think you should concentrate on getting debt free rather than on preserving a good credit history. In the long term that will put you in a better position.

Have you read our thread?

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps-to-take -are-here-please-read-then-ask-questions

Brie

Welcome and well done for coming along to ask for some assistance.

Step one is we suggest you fill out a statement of accounts (SOA - see the link in my signature below) so we know what your income and expenses are like as well as all your debts.  It's best to use a couple of months of bank and credit card statements so you give an accurate picture.  Once you do this we'll be able to make suggestions on what you might cut back on.  It also gives you a chance to understand how you got to this point - that in itself can be quite scary.  

Nothing the matter with a DMP but if you are looking to have mortgage soon you need to do this on your terms.  

ManyWays

If you have 20k of debt, no savings and have taken a pay cut, it sounds as though its very unlikely that you will be in a position to get a mortgage in 3 years. IF there is some reason why you may be (your grandmother's probate is taking ages to go through but then you will have a lot of money say?), can you explain, then we can see what your options are in the light of that.

But if this is just optimistic thinking, you need to forget about the idea of a mortgage, stop worrying about your credit record, and look at your real debt clearing options. 

Lamdj89

Thanks @ManyWays. Yes I will be getting money from the death of a relative this year and also see my wage go up this year also so just wondering what to do between now and then as I'm currently struggling 

ManyWays

ok, as @Brie says, please post a Statement of Affairs

fatbelly

Lamdj89 said:

 Yes I will be getting money from the death of a relative this year and also see my wage go up this year also so just wondering what to do between now and then as I'm currently struggling 

If you are getting over 20k in a short period, say 9 months, then you do have two options

1. Continue debt juggling, pay off in full when the lump sum arrives.
2. Default now and settle at a discount some time after the lump sum arrives.

Option 1 preserves credit report but costs more. How much is a clean report worth will depend on your circumstances