Self managed DMP starting now

getoutofdebtcard

hello,

I’ve been reading a lot on this website past week.

I have found it inspiring and wanted to start that journey of my own to being debt free.

Happy Good Friday.

Just to start of first with some questions!

a few DD has already been taken to pay some credit cards, as I wasn’t ready to do my DMP yet until a few days ago. I have already transferred whatever’s available back to me, since I would not be able to pay back my repayments, that’s what has started me on this journey.

Should I cancel all my DDs now? Even if some CC’s have been paid and others won’t be for this month? (I’ve read I should treat creditors “fairly”)

there are two credit cards, one with £200 limit and another with £500. I could possibly pay them off by May if I don’t pay the rest. This seems easier to get rid, will the other creditors see this and get annoyed and issue CCJ’s? Or that’s not something possible until after actually defaulting.

I say this because with my other credit cards. I believe I have irresponsible lending claims I can make on all of them, except these two, since they haven’t raised the credit limits and are quite low in limits.

I was also thinking of keeping my Tesco CC (£600) as this is solely for groceries, is this okay if I default on everything else except this?

I currently main with Monzo, overdraft £2k, flex £5k and loan of £13k including interest.

I do want to keep my Monzo account, hopefully that is possible.

First step I have read is:

1. do not communicate with any of my creditors and just cancel the DD, so they default me (once defaults have been applied, interest and fees no longer accrue and that means it will drop of 6 years from when I get the default)
2. Pay the least amount as possible to the creditors, enabling me to build up an emergency fund and be able to offer the lowest amount I can with full and final settlements at a later point.
   
   

thank you

I will post more details later, I’m been so sleep deprived due to this debt. I will post my income and debts

RAS

Hi, if you do a DMP through Stepchange, they will apportion your payments to the creditors at that time prorata. Unlike an IVA, that is not a legal requirement, it is a policy agreed with lenders. What you do prior to starting the DMP is none of their business.

You need to ensure that your income goes into an account with a provider to whom you owe no debt, as they have the right to off-set any money in an account against debts you owe them. That includes checking the banking groups as they can use money sat in an account in another bank in the group. Less often these days, but legal.

An SOA would be a very good idea. You don't have to share it but quite a lot people initially fail to make provision for some spends which people here can spot.

Whilst you wait for default, you put the money you are no longer paying out into an emergency fund, so that you never need consumer credit again. So you need an ISA or similar in which to stash it.

ManyWays

It would really help to see a full SoA. With the names of your lenders.

there are two credit cards, one with £200 limit and another with £500. I could possibly pay them off by May if I don’t pay the rest. This seems easier to get rid, will the other creditors see this and get annoyed and issue CCJ’s? Or that’s not something possible until after actually defaulting.
I would treat them all the same. 2 less defaults will not improve your credit score. If you really want clear and close the 200 card, but not the 500.

I was also thinking of keeping my Tesco CC (£600) as this is solely for groceries, is this okay if I default on everything else except this?
This is really pointless, having one card you pay normally will NOT help your credit score which is going to be trashed. You need to switch to a mindset where you do not need to use a credit card, your budget includes enough for groceries which you then pay with a debit card

I currently main with Monzo, overdraft £2k, flex £5k and loan of £13k including interest
I do want to keep my Monzo account, hopefully that is possible.
You want all of those to default so interest stops, overdrafts are VERY expensive. So you need to plan to move to a different bank. And also look at affordability complaints against all of those 3 debts.

getoutofdebtcard

should I cancel all my DDs to the CC now today? Since there are a lot due to come out after Easter.

I will be adding my SOA and debts over the coming days. I have complied the debts so far but on my laptop.

should I also do all my irresponsible lending complaints to all my CCs and loans now or wait until they default?

sourcrates

Stop your payments now, otherwise its just wasted money, and yes, time limits apply to making complaints, so get them in as soon as you can.

This is my latest post on another thread, on the same subject, self managed debt management, so it will apply to you just as much:

"You will find you will adapt quite easily, once you get underway, you have been programmed to make your monthly payments to your lenders by a certain date of their choosing every month, or face financial penalty if you do not comply, does that not sound like a method of control to you?

Debt management turns that world on its head, and removes all the previous restrictions you were subject too.

Its a place where you decide who gets paid what and when, remember, there are no requirements on you to treat everyone the same, you are now in charge, so you call the shots now.

With multiple creditors, its best to keep things as simple as possible, the lenders you have currently, will not necessarily be the ones you start your DMP with, as debts will get sold, or assigned to collection companies, so there is no need to write essay style letters of explanation, debt collectors are interested in one thing, and that is a regular stream of income, so if anyone asks for a copy of your budget, you show them figures formatted like the previous example I gave you, they do not have to be your actual income/expenditure figures, just numbers that show them what you want to pay, remember, there are no rules here.

Ideally you want it to be no more complicated than a simple transfer of funds to each creditor every month.

Anything you are unsure of, ask, for example, when debts are sold or assigned, there can be a plethora of different scenarios that may unfold, default notices are only sent under sec 87(1) CCA, anything else is just a scare tactic, if in doubt, ask, threats of any legal action, most are just threats, only a "letter before action" must be dealt with as a matter of urgency, again, ask if unsure".

getoutofdebtcard

https://forums.moneysavingexpert.com/discussion/comment/81949749#Comment_81949749

thank you! I was hoping you would send a message for my thread! I’ve seen your comments on a lot of other threads and you have been like a knight in shining armour!

I got in this mess due to gambling addiction, it got much worse in 2022 and I stopped cold turkey in 2024, signed up with GamStop for 5 years.

I lost control on these online prize competition websites, I saw an advert on social media, got intrigued and googled it and then that’s when it started happening, bombardments of these websites on adverts from meta. In the span of 3-4 months, I had lost everything I worked so hard on, maxed out my credit cards, applied for loans, overdraft maxed.

those so called “competition” should be classed as gambling. I gambled around 45k net, that I includes all the winnings I got, paid it straight back.

I want to make a complaint to my bank, will see how this goes.

I will be making irresponsible lending to my other creditors going back to 2022, when it all really went down hill. Ideally I will use information going back to 2020 and 2021. But will see how useful that is.

I will write a bit better with more information when I have my laptop available to hand, right now I’m using my phone and it’s hard to concentrate my thoughts.

I just wanted to say, thank you though, the countless messages you have posted to other threads has been really helpful.

getoutofdebtcard

I’m not sure if I done it right, on the phone is quite hard.

I also owe my sister around £20k

the Klarna payments are from the pay in 3, so it’s made up over multiple payments. I’ve already clicked couldn’t pay and arranged for them a payment plan. I haven’t paid my first one yet, so hopefully the default overrides any markers they might have put for “arrangement to pay”

I am also concerned, will they send bill collectors to my door? Since they aren’t “traditional” CC

same question with Zlitch.

I’m also not sure if I have filled in the SOA correctly, since I haven’t put anything in for like entertainment, holidays, emergency funds, etc.

My main goal is to pay the least amount as possible, so I can settle with F&F after a few years.

Grumpelstiltskin

OK down the line you may get a door knocker, that is all they are, you don't get bailiffs.

If anyone does knock at your door treat them like you would religious door knockers, either ignore them or say not today thank you, they have no authority at all.

Smudgeismydog

Thanks for posting your SOA, you note 2 adults in the household, but only 1 income. Is this right?

getoutofdebtcard

https://forums.moneysavingexpert.com/discussion/comment/81950375#Comment_81950375

yes it is, I’ve split the expenses to my half

ArtyJ931

You have 0 in lots of areas that cost money inevitably so I would definitely look at those and try to prepare a more realistic SOA. I know what it’s like to cut to the bare bones to pay debt but that is the problem. You then can’t afford to live and living has to go on credit.

clothes, medical, entertainment, gifts for eg will all be necessary and can’t realistically be 0. Did you have an amount for an emergency fund too?

Others suggest going through your bank statements/ credit statements to identify a realistic budget.

Hope that helps ☺️