Some DMP questions...

GreatBigBookcase

I'm considering entering into a DMP as debt payments are becoming a struggle due to personal circumstances leading to a reduction in my working hours/pay. I've spent days reading threads on here (really appreciate everyone sharing their knowledge and experiences) and have contacted Stepchange and feel it's the right thing for me to do. I just have a few concerns that I'd appreciate people's thoughts on please?

1. I have a caravan which was bought on HP car finance. It's high at £492 a month, but rental income from the van covers at least half of it so it's not as bad as it looks. I want to keep the van, but wonder if this might make creditors less likely to accept reduced payments from me in a DMP? It's a depreciating asset, so selling it wouldn't help anyway as the finance agreement wouldn't be covered by the resale value. But is it a potential stumbling block?

2. I've never defaulted on a payment before and I have the usual concerns about debt collectors turning up at the door/ringing and my son answering. My son is 13 and plays out a lot so our door is often unlocked and him and his friends are in and out. Is anyone likely to turn up at the door at any point?

3. I have a bike that I'm paying for through Klarna (£13 a month, £180ish left on it) and credit with Creation which paid for a PS5 (paying £19 a month, about £390 outstanding). Can either of these items be repossessed if I default on the loans? As they are relatively small amounts, would it be worth paying these off (would have to be with a credit card I'm about to deault on) to reduce the number of creditors?

I have a small mortgage (£284 a month, £39,000 left on it…I was mortgage and debt free once!) and about £140,000 equity in my house. I've looked at remortgaging but can't get an extra £20k to pay off the other debts. Two brokers have been unable to find a lender. I've considered a secured loan, but I don't feel happy securing anything against my house as my one saving grace in all of this is that my mortgage payments are affordable and I don't want my house itself to become stressful, if you see what I mean. I also don't think it would reduce the payments by much.

Would appreciate anyone's thoughts on my concerns. I'm probably going to go with Stepchange initially (although after reading up on here I will default first before starting the DMP) just for ease at the beginning.

sourcrates

Your assets, house/caravan/various Picasso's hanging on the wall, whatever they may be, are no ones business but your own, you are not under any obligation to declare anything to anyone, assets only matter in bankruptcy, nothing else.

There is no acceptance of payments in debt management, creditors have no say in accepting reduced payments, you pay what you can afford in debt management, any creditors that don`t like it, will simply sell the debt to a 3rd party or assign it to a debt collector, you continue to pay according to your budget.

Creditors will chase the debt, not the goods you bought with the debt, again, assets only matter in bankruptcy.

Do not consider a re-mortgage, nor a secured loan, you don`t pay off debt by borrowing more money, never works out well for most people.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/81949107#Comment_81949107

But they don't own the caravan....…yet. Isn't there a danger the lender will seek to reposses?

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/81949125#Comment_81949125

OP states they will continue with payments to the caravan as they want to keep it, so why would they repossess it?

fatbelly

Yeah, the caravan's fine to keep if you want to. But does it really make sense? Rental income doesn't cover the monthly instalment and it's a depreciating asset. If it's HP, you can get out without penalty at the halfway point under the Consumer Credit Act

GreatBigBookcase

Thanks sourcrates, that's really reassuring. Would the other creditors see the car finance and payments to it and question it at all? Should I not include it in the details I give to Stepchange? I was under the impression Stempchange share budgets/details with the creditors…is this the case?

Another question too, I get a DLA payment for my son. I know this can be disregarded/off set against the extra spending needed to cover his needs. Should I include this in my Stepchange budget and then add a line that offsets it, or just leave it out entirely?

Really grateful for your time.

Isthisforreal99 - yeah, I'll keep up the caravan payments. It's the thing that keeps me sane…

GreatBigBookcase

Hi fatbelly, thanks, yes, take your point…I recognise buying a static caravan is a terrible financial decision, but…life is difficult and I LOVE having a bolthole by the sea. If anyone would give me a mortgage for a bricks and mortar second home, I would definitely do that instead! We spend a good chunk of the year there because I can work from there and my son is home educated, so it's well used at least.

I'm keeping VT in mind for when I get to that point.

sourcrates

You should perhaps be a tad careful what information you share and with who.

As I said in my previous post, its no ones business but your own, your budget to stepchange should ideally be formatted like this example:

Income - £2450

essential expenditure - £1750

Money available for debt repayments - £700

And leave it at that, the less your lenders, and debt collectors, as they will become involved at some point in the game, know about your finances the better.

GreatBigBookcase

Thank you sourcrates. ☺️

ManyWays

Can we see what the budget you have told Stepchange looks like? It's easier to make helpful comments with real numbers. And please include the lender names.

How long ago did this caravan HP start and are there additional pitch fees for it?

Rob5342

Have you thought about managing it yourself? It's very easy really and often having Stepchamge involved and trying to keep them happy can make things more difficult (you can just pay what you want instead of having to make up a budget for Stepchange so they will pay what you.want them to)