Debt getting me down

enthusiasticsaver

You have already had good advice so not sure I can add anything to this but just to reiterate your home is not at risk and if you close joint accounts with others (apart from the mortgage of course) it should not affect your parents but make sure your partner knows. I would say if that biggest loan for Plata was for moving costs then that should be a shared expense so it is not all on you.

Your soa shows you are just £181 short of contractual repayments so I am not sure where you got the idea that a DMP will take 17 years to repay. The defaults fall off your file in 6 years so I would suggest you offer £500 approx per month to clear within that within 6 years. I have not read every post though so maybe there is a reason you cannot do that. The first step is to default so stop every payment and save into a fund for emergencies as you will have no access to credit.

enthusiasticsaver

I would also look at putting in an affordability claim for that Plata loan although if your partner was working at the time of application and they took his income into consideration or your income was higher then you could argue they did nothing wrong. The interest rates would be useful. I do not know if it is feasible to restructure the Plata loan over a longer period to reduce the repayments which might help. IVAs are quite inflexible although they may have changed since I worked in debt counselling. @fatbelly or @sourcrates are the experts on this.

fatbelly

I don't think we are looking at an IVA here but yes they have improved. If you go for one these days you should make sure it is 'protocol compliant'. They don't have to be.

As usual, Debt Camel does an excellent summary

https://debtcamel.co.uk/debt-options/iva/

llcooljayne1

The plata loan is solely in my name. I was on a much larger salary then but got made redundant but don't think that will matter much to them!

llcooljayne1

With allowing my debts to default, how long should I do this for? I have to say it feels very wrong to not pay anything!

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/82041543#Comment_82041543

100% this is how I was feeling for years when I realised I was on a steep, slippery slope. It was making me ill with worry, I was vacant with my family and children it was horrible. This forum has literally saved me so much anxiety and stress. Reading about DMPs on Step change I thought no can do that's going to be so rigid etc. I thought I was lost.

Reading on here about self management, full and finals and affordability/CCA requests has given me hope and I no longer feel like debt is an albatross around my neck.

You've found the most amazing group of people who can help you without any fear of judgement. They've all been there, done that and bought the t-shirt (sometimes multiple times over!).

You'll get through this and look back with a sense of pride in sorting past mistakes by yourself and hopefully with support from family (and definitely support on here).

I'm just waiting for a separation and change in home ownership before I start defaulting as I don't want to mess my ex's mortgage application up being financially linked. But I'll follow your journey closely. 🤞

Grumpelstiltskin

https://forums.moneysavingexpert.com/discussion/comment/82045593#Comment_82045593

OK I have told you that you must change your mind set.

You are only a number to your creditors, thay don't say ' Look at Mrs Jayne she hasn't paid us anything'

You have to realize you are in control and if you cant afford to pay them anything then so be it.

The sooner the debts default the quicker this will be over but some will default quickly others be still not have defaulted in 12 months time.

You are not the only person in this position there will be hundreds of thousands of people in the same boat, it wouldn't surprise me if people you know are in the same position but in this country debt isn't spoken about.

Once you have realized you are in charge not your creditors you will be able to move forward.

llcooljayne1

Thanks again, your advice is invaluable!

When I get paid tomorrow I have decided to take the plunge and not pay (apart from essential bills of course) I am cancelling all direct debits today. How long should I leave it to apply for the dmp?

Grumpelstiltskin

Don't even think about applying for a DMP yet, there are things you must do before applying for a DMP.

Firstly save as much money as you can in your emergency fund. Open an easy access cash ISA for this.

Secondly get your possible benefits sorted out.

Thirdly do you owe anything to your current banking group? If so you need to get a current account with no overdraft away from that group.

Remember one of the biggest mistakes you can make is panicking and starting payments too soon.

sourcrates

" How long should I leave it to apply for the dmp? "

Six to eight months is about the norm here.

You must keep in mind that the debt collection process is not quick, it can take some considerable time to roll out, you will get automated phone calls, and standard letters sent, all geared up to get you to contact your lender.

Ideally you want all your debt defaulted, as all interest stops, it gives you time to save an emergency fund, and your credit file will be clear in 6 years time regardless of what else you do.

Its not essential to wait for defaults, but it puts you in the best position possible to get through debt management.