Advice on DMP with step change needed

naturemama1

I haven’t included it, as he gives me £900 towards the house each month, and he covers the electricity, phone, car, subscriptions etc. So I only get paid £1900, but have added the £900 on if that makes sense?

naturemama1

I’ve not included his wage, as he gives me £900 towards the cost of the house, I only get paid £1800, so I’ve added that on. As he pays for the electricity, subscriptions, car and phone.

naturemama1

https://forums.moneysavingexpert.com/discussion/comment/82093269#Comment_82093269

he gives me £900 toward the house, so I have included that as income, as he pays for the electricity, phones, car and subscriptions. I actually get paid £1800 from work.

itsthelittlethings

https://forums.moneysavingexpert.com/discussion/comment/82093302#Comment_82093302

Does your partner earn more than you? If so it might be worth having a discussion about how you split costs as it looks like you're splitting costs 50/50, unless they're paying for other stuff.

itsthelittlethings

Sorry, just saw you said he pays for some other stuff. Depending if he earns more than you/ how much more, there might still be a conversation to be had.

naturemama1

anyone else got any other advice? I am leaning towards just starting the DMP with step change and starting to move forward. Does anyone know if you can, realistically, reduce the time to pay? 9 years seems such a long time! Also, is is definitely true that my credit won’t recover until 6 after the DMP ends? What if the defaults are registered (by step change) quickly? Is it 6 years after that time?

Grumpelstiltskin

Under no circumstances start paying a DMP until the debts have defaulted.

If you start before they default your credit report is marked Arrangement To Pay, these don't go from your credit report until 6 years after the final payment is made so if it takes 5 years to pay it takes 11 years before it goes.

Once a default is registered it goes 6 years from that date even if you never pay another penny off the debt.

The first thing you must do is stop panicking, when you payments stop nothing terrible will happen, debt collection moves slowly and you will have plenty of time to start an emergency fund which will cover things like fridge breaking down and also will help you to save for future reduced offers and possible affordability complaints which will reduce the amount you owe.

naturemama1

so I will need to be dealing with 9 creditors without support of step change? This is what worries me so much. Is it an option to let them default and then go with step change? Also, how will these debts increase in that time? Do you get penalised for not paying? Like other than late payment charges?

Grumpelstiltskin

OK dealing with creditors, after defaults and when you know for sure how much you can afford to pay in total all you do is work out pro rata payments and set up standing orders ( not direct debits )to each creditor, you don't ask them how much they want you to pay it's what you can afford. ( remember you are in charge not your creditors )

After that you will have little dealings with them, you can ask for all communication to be in writing and never ring them.

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82094053#Comment_82094053

Yes, you can do it that way, it's completely up to you. Some people start off with Stepchange and then move to self managing when they are more familiar with the process and want to diverge from the way Stepchange handle things. Defaulting first is important though, make sure they show as such on your credit report.

Before you default you will get late payment charges and extra interest, but once defaulted charges will be frozen. You should be able to make a reduced settlement offer at some point down the line which will counter the extra charges.

Dealing with creditors is pretty easy. Once defaulted you normally get a friendly sounding letter from whoever is collecting saying they want to help you pay repay the debt off or something like that. Then you just let them know what you will be paying, set up a standing order and that's it. They'll sometimes want to see a budget, you dont have to send that if you like or you can just make one up to support the amount you want to pay.