Help needed please re debt and possible DMP

JAYJAY33_2

Hi sorry long post alert bit I've got about 70k in debt accrued, personal loans,credit cards, PayPal credit etc. I contacted them all over last few months and agreed repayment plans but I am still hugely struggling. MBNA set up a consolidation loan so unsure where this leave me now applyingnfor DMP with step change. The whole situation is really stressing me out and so. At home my husband and I are not in a good place and so I've not been able to tell him about the debt and I don't feel I can tell him safely without it causing murder. He earns alot less than me so some debt has been acculated for living costs but he wont accept this. We have a joint mortgage on fixed term until next year. I am hoping we can just renew with mortgage company so no credit checks. I am debating a DMP but its going to take in excess of 10 years to pay back so its an option but one that step change have not recommended. They said IVA but I really dont want IVA. Realistically I can afford around £500 a month for all 9 debts and unsure how best to manage this. Been reading about defaulting and how this is best but can I do this if already on repayment plan? The whole thing is making me anxious and feel cant see wood for trees. My husband and I are on verge of separation but he won't move out of house so I need to find a way to keep roof over kids heads and getting my debt down otherwise only option will be to sell house but doing that when my credit file is awful means I will struggle to get new mortgage or even rent. Any ideas please as how best to approach all this and without him becoming aware? I am on a decent income but after a house move and cost of living increases my debt has spiralled and dont qualify for any 0% offers. Even with negotitated payment plans I am paying £1326 per month so if can reduce to £500 then this would be a huge help in covering essential costs..Thanks so much

ManyWays

Been reading about defaulting and how this is best but can I do this if already on repayment plan? 
You stop paying.

They said IVA but I really dont want IVA.
If you are very unsure about your relationship and may need to get a new mortgage after separation, no debt solution is good, but an IVA is definitely a bad idea.

But let's see a Statement of Affairs to get a full picture. Here is our preferred format https://www.stoozing.com/soa.php

Could you fill that in with the numbers you talked to StepChange about please? And add some notes at the bottom if there are any lines you think are too generous or too skimpy?

Please include the names of the lenders. And tell us about this recent MBNA consolidation loan.

JAYJAY33_2

Thanks will complete asap. I had two credit cards with MBNA which they agreed a 6 months reduced payment plan and as this was paid as agreed they consolidated it into a loan for the same reduced repayment but this has only just started l. Interest rate was 9% and think its over 81 months. Do I need to continue paying this one?

RAS

Thanks for the info on MBNA. At least you've only consolidated the two debts you had with them. Can you just check that this is still consumer credit, and you didn't secure the debt on the house?

Consolidation is very very rarely a good thing. So don't be tempted to repeat it.

You will be able to just renew your mortgage next year but if you are on the verge of separation paying more into the house longer term increases the equity, so he gets bigger pay out if you divorce.

So you need a bit of time to learn about your financial options in the short-term, look at your marriage and the legal possibilities if you stay together or divorce.

You may need time to develop some ideas of what you'd prefer to happen, plan A, plan B and plan C if he decides he wants out.

But you will need to tell him about the debt eventually, once you have more information and options. Not least as if he doesn't know the truth his financial actions will probably nullify your attempts to right the ship. He can't adjust his behaviour if he doesn't understand the consequences.

Given how many financial and personal variables are at play, do not consider an IVA at this stage.

The SOA would help and we may need more info to advise more effectively.

JAYJAY33_2

Can I double check something please? Ive set up new bank account but do I juat need to transfer the non debt direct debits to new account and leave all my debt direct debits in my old account?

Grumpelstiltskin

You need to transfer all the direct debits for vital payments to your new account and cancel all your debt payments.

Do not use the banking switch service as it causes problems but transfer the payments yourself one by one.

I hope you have checked you don't owe money to the banking group you are moving to.

RAS

As Grumpelstiltskin says, check banking groups before you do anything else. For example Virgin and Nationwide recently joined.

JAYJAY33_2

Thanks for this, have checked and dont have any debt with new banking group. What happens if the various debts default at different times? When do I go into DMP as presume you need to do it all at once or do I need to wait for everything to default and rhen do it? Don't want to risk CCJ ignoring letters from creditors for not paying if waiting on others to default? Thanks and sorry for so many questions! Just cancelled all my direct debits for my debt which felt very nerve wracking!

JAYJAY33_2

Also my car is on pcp and need it for work, take it I just leave this out of my DMP? I cannot risk not having a car.

Grumpelstiltskin

Firstly don't panic, nothing happens quickly in the world of debt collection. The worse thing you can do is panic and start payments too soon.

You need especially in your position a decent emergency fund. Start saving, open an easy access cash ISA and save as much as you can afford in it.

Block all numbers from your creditors, you can ask for communication by post only. OK open all letters you receive, you will get letters telling you the debt is going to default but they have to be sent and don't think they mean a CCJ is going to magically appear they don't.

JAYJAY33_2

Thanks for all the advice. Im still not certain what I do if defaults are months apart and when should start DMP? If one default starts in 3 months but another creditor doesn't issue default for 6 months. I don't want to risk rhe default thats been issued turning into a CCJ if waiting on others to default as presume you need to start DMP with all debts included at once?