DMP advice please

Matt138600

Hi all. I’m currently looking at setting up a DMP due to the amount of debt I currently have. ( over £60k )

I would just like some advice and help if possible on a few things.

Having read a few posts on this forum I’ve set up a new separate bank account and my wages will now be paid into this bank.

I’m currently in the process of moving all direct debits I need to keep ( insurance etc..) to this new bank.

Am I best of removing any money left in my old bank and transferring it to my new account ? That way no payments can be taken out.

Again, having read posts on this forum I will cancel any direct debits and leave no money in my current account and wait until the default letters arrive.

I also have a couple of credit cards that I’m not in debt with. Will these still close when I start up a DMP or will I need to manually close these?

Thanks very much for your help

Brie

Sound like you're getting things started ok. I'm assuming that the new bank account is completely unrelated to any of your debts? And yes empty out the old account so it doesn't get raided in some way.

And I'm assuming that in setting up the new account you haven't used the "switch" process - doesn't sound like you have - which is good.

Yes wait until there are defaults before you start making any payments. It's normal for creditors to want to see an outline of your income and expenses to judge how much they expect you can pay them each month. You might want to get that started by filling out a statement of accounts (SOA, see the link below) and ensure you base it on a couple of months bank statements so it's accurate. You may wish to post that back on here so people can help twitch your budget into shape a bit but isn't absolutely necessary.

Your CCs won't close automatically just because you are doing a DMP that doesn't involve them. You may wish to close them yourself or you may just want to tuck them away and not use them on the possibility that they may be handy at some point in the distant future. Some say that CCs will close automatically if not used for X years but I have yet to have that happen with any of mine.

Good luck and here's wishing you every success.

Matt138600

https://forums.moneysavingexpert.com/discussion/comment/81973502#Comment_81973502

Hi Brie.

Thanks very much for replying.

Yes the bank account ( starling ) is totally separate and unrelated to any of my debts.

I’ve also not done the switch service and gone through each direct debit individually and either rang the company if it was something I needed to keep ( car insurance, pet insurance etc…) and cancelled the rest.

My existing current account now has a balance of £0 with all monies transferred to my new account.

Thanks for the link, I will create a SOA this weekend.

I haven’t missed a payment for 8 years now so I’m dreading not paying the bills when they arrive at the end of the month.

Thanks again for your help.

Matt

burgervanman

https://forums.moneysavingexpert.com/discussion/comment/81973604#Comment_81973604

Best thing I did was block any calls that aren't in your phone book on your mobile. Make sure you add your doctor's, kids schools etc. I just check my call list once a day for any that may have been legit and blocked. Zopa at one point had their robo dialler trying me 5 times a day lol.

This forum is excellent, helped me understand the process in full.

If it helps I never missed a payment in 20 years prior to now!

Smudgeismydog

Welcome, and well done for acknowledging your position, and posting

Matt138600

https://forums.moneysavingexpert.com/discussion/comment/81973632#Comment_81973632

burgervanman, thanks very much for this info.

I’ll certainly look at blocking all calls, not sure how to do it but I’ll have a read 😂

How are you finding it ? Did you arrange the DMP yourself ?

Thanks very much

Matt

Matt138600

https://forums.moneysavingexpert.com/discussion/comment/81973673#Comment_81973673

Thank you Smudgie. I’ve done my best with it but I’m now at the position where I’m robbing Peter to pay Paul and it can’t carry on like that as my salary is no longer even covering the bills.

Smudgeismydog

Post your SOA when you get a chance, and we can take a look and perhaps offer some pointers (base it on what you actually spend, and not your aspirational expenditure)

Brie

fyi - creditors tend to send you their own version of a SOA to complete. I've never known one that wouldn't accept an alternative version as long as it has the info they require - i.e. reasonable expenses and income and a list of creditors with what you intend to pay each. If they see you only have £100 for debts and there's 5 creditors with equal amounts owing they will each expect the same amount. If the amounts vary (as they do normally) then you offer them pro rata amounts. If one demands a silly amount say no and pay them what is affordable. All payments should be by standing order, not direct debit, so you remain in control at all times.

You've got this!!!

burgervanman

https://forums.moneysavingexpert.com/discussion/comment/81973675#Comment_81973675

I did consider the stepchange route but all my debts are mainstream lenders so I thought I'd just do it myself. I am a control freak though and have a big excel sheet to track everything.

It's been quite liberating to be fair after 2 decades of continuous debt nearly. I did spent a good few months though planning the process. My original thread is here, I do keep it updated. Next will be when all have defaulted.

Note how my opinion changed through the posts after the panic of 'i must use stepchange wore off' Don't get me wrong they can help, just I think I can manage myself with more control.

https://forums.moneysavingexpert.com/discussion/6655577/default-and-dmp-plan-thoughts

For the first time ever I have a decent emergency fund now and it's changed my view, spending habits for the better

Matt138600

https://forums.moneysavingexpert.com/discussion/comment/81973753#Comment_81973753

That’s great, thank you Brie for that information. I’m sure it will all work out ok and I’ll keep this thread updated with how it’s going. 👍