New DMP

Aliceindebtland

I am in the process of starting a DMP with StepChange due to juggling a high level of debt.

My question is how will this affect my husband, we have a joint basic bills account with no overdraft and no joint debt.

All of my debt is personal debt from loans and credit cards and I really don’t want to have to tell him about it as he’s really funny about money and it’s stressful enough without endless lectures!

If my personal accounts go into default will this cause him issues getting credit?

I’ve googled it and got a few different responses.

Thank you

sourcrates

Credit files record credit accounts held in your name, or held jointly with a partner/spouse.

Only a jointly held debt would see his credit worthiness affected, no joint debts, no problems.

So if your joint billing account does not have a borrowing facility, what you do will not affect him in the slightest.

Grumpelstiltskin

You must take your name off the joint account, no joint accounts possible.

Yes he will find out, how will you explain you don't have access to credit?

Marriage is a partnership, you are wanting to put yourself in a position where you will have to lie to him for years to come, are you sure that is what you want?

Having said all of that are you sure you are doing the right thing?

Aliceindebtland

https://forums.moneysavingexpert.com/discussion/comment/82090564#Comment_82090564

Thank you, we don’t have any joint credit agreements or debt, there isn’t even an overdraft on the joint account.

Aliceindebtland

https://forums.moneysavingexpert.com/discussion/comment/82090569#Comment_82090569

thank you, whilst I understand your point I do plan on having the conversation with him but want to do it when I’ve got myself in a position of sorting my debt out.

When you state I must take my name off the account, is this because I’m not allowed one on a DMP or it will have a negative impact for him?

Grumpelstiltskin

The joint account will have a negative impact on him if he tries to apply for any form of credit.

Don't make the mistake of jumping into a DMP too soon you should stop paying and wait for the accounts to default before you start paying. that could take some months but it will give you chance to save an emergency fund.

ManyWays

Have a look at your credit record such as Credit Karma or the Experian app (both free). Do they show that you have a financial link with your husband?

I agree that it is a much better idea to tell him. but it would help if you were able to reassure him that he will not be affected

Aliceindebtland

https://forums.moneysavingexpert.com/discussion/comment/82090621#Comment_82090621

it does show we have a financial link due to the joint account so I think a DMP isn’t my best option as I know he wants to get a new car on finance soon.

Whilst I understand I need to come clean about the debt, he would be so cross and I don’t think I could take the lectures or constant criticism when I then needed to spend money on something. He earns better than me and has a fair amount of savings and I’ve just over spent trying to keep up, which is silly in hindsight!

My parents were always bad with debt and I didn’t get a great financial education from them, over the years it’s just spiralled.

ManyWays

How much do your current minimum payments add up to?
How much do Stepchange say you might pay a month in a DMP?

Aliceindebtland

https://forums.moneysavingexpert.com/discussion/comment/82090778#Comment_82090778

Current minimum payments are £817 over four loans and a credit card.

StepChange have said monthly DMP payment would be £537 allowing for a realistic budget to live on.

Smudgeismydog

Can you give us more information on your credit cards and personal loan? Please include the APR and end dates for any on 0%.

If you don’t want to go the DMP route, then you might need to look at balance transfers to get as much as you can on to 0% interest. Then perhaps very strict budgeting to work through your own debt repayment plan. There are generally two approaches; the snowball method focuses on paying off the smallest one first so you can gain some momentum, before moving to the next smallest debt. This method can give a real boost as you reduce your number of creditors. The other method is the Avalanche strategy where you start with the debt that carries the highest rate of interest. This aim of this approach is to pay off your most expensive debt first, thus reducing the overall amount of interest you pay.

Could you reduce personal spends e.g. clothes, hairdresser, coffee shop trips combined with increasing income through e.g. selling items to have more funds to throw at the debt? Lots of people set up a diary so they can keep themselves accountable, and of course have support along the way on their journeys.