DMP advice

flamingo22

I have reached the point where I can no longer service my debts. I currently owe £36565 in unsecured debts and a secured loan of £15088 (currently with the FOS). I know that I will have to keep paying my secured loan.

I have been doing a lot of reading on this site and I feel that a self manged DMP will be the best way for me, however I am anxious about the amount of phone calls/texts and letters that I may receive.

I have a bank account Co-op that is not linked to any of my debts (unless they are somehow linked to RBS for my overdraft) and my next job is to start moving my DD's across and setting my wage to be paid into my Co-op account.

I have been paying between £1800-2000 each month for the last couple of years, struggling to get through the months and then applying for another consolidation loan and using my credit card. I have made affordability complaints and waiting the outcomes. I had every intention of paying this debt back and have done everything I can to avoid a DMP but I just cannot avoid it anymore. It's affecting my life more than it should.

I think the thing that has been putting me off is that in the next couple of years, I will need an extension on my house (need an extra bedroom for my youngest) however also in a couple of years my eldest will be going to uni, which may solve the bedroom issue and I know she will need a base, so if it comes to it, she can have my room and I'll sleep in the living room. I've recently come to realise that the extra bedroom does not come above my mental health.
My car is a 13 year old diesel car, no problems so far but if I do encounter any problems, this cost would need to go on the credit cards. I would like to decorate my kitchen, nothing fancy, but again I just cannot afford it.

I do not have any spare money after my bills and debts have been paid, I'm actually minus £120 per month.

My debts are currently with

Admiral, Zopa x3 (affordability complaints have been sent), Fluid, Capital one, Hastings, HSBC, NatWest and Tandem for my secured loan. Do you think I may have issues with any of these debts? Again I will keep paying the Tandem one.

I think I'm writing on here for reassurance, that things will be okay, that I won't have people harassing me and turning up at my door demanding payment and that I will some day soon, wake up and feel at peace and not stressing about money and doing surveys for pennies and looking around the house for things to sell just to make it through the month.
Any advice welcome 🙂

ArtyJ931

things will be ok. Nobody will be knocking on your door. You will have peace from the stress of worrying about money. You will be able to afford to live, build up savings and prepare for all your expected expenses.

In terms of phone calls/emails/letters it hasn’t been as bad as I thought. I changed all of my contact details on all of my debts to a new email address I set up specifically for that so emails went there. I also have calls from unknown numbers silenced on my phone and I don’t get notified. I have a look every week or so at that list and some weeks initially I had quite a few but recently it’s 0-2 a week. All manageable. Quite a few letters (up to 5 a week) but I just pop them in a folder I have set up specifically for that and don’t even read them.

5-6 months in I’m now just checking my credit file every week or so to see if any have defaulted yet. I have a decent emergency fund and pots built or building up for expected expenses. It’s just wonderful being able to afford to live and not be stressed all the time.

edit- none are yet defaulted. It is a very slow process

ManyWays

and don’t even read them.

it's a good idea to get into the habit of reading them. Or rather just glancing down them to make sure it is nothing unexpected.

sourcrates

As with most things in life, pre-planning is everything, if your intention is to go into debt management, you pre-plan how you are going to do it, decide what steps you need to take beforehand, and put a plan in place to manage initial creditor reactions to it.

To minimise creditor contact, before you stop paying, you change all your contact numbers, give them either a random number or the local Tesco, doesn't really matter, likewise your email, set up a hotmail account specifically for that purpose.

You can also write to them all and request contact in writing only under GDPR, and they must comply with your request.

Remember, anything important, lenders must write to you.

Once you are up and running all this becomes academic, as life continues in debt management, the same as it did before, only now you will have more disposable income, and a lot less stress.

The hard part is at the beginning waiting for defaults, but its only as hard as you want to make it.

flamingo22

https://forums.moneysavingexpert.com/discussion/comment/82127251#Comment_82127251

Thanks Arty, I've read your diary a couple of times which gives me reassurance 😊 so your next steps are waiting for defaults and then starting to make payment plans with however owns your debts?

I wish I would've started this process sooner and I think I'll be fine after the first couple of months it's just the waiting around to see what happens. Have you made any contact with your creditors at all? And are you hoping to have all the debts paid within the 6 years?

flamingo22

Thank you, I know you have vast knowledge of these situations and would there be any reason for any of my creditors to go straight for a CCJ, are any of my creditors hard to deal with.

flamingo22

It just feels so wrong not paying my debts but it also feels wrong that the companies are partly responsible for why I'm in such a mess.

Zopa have said that they were irresponsible for giving me one of my loans and now are bothering me to send an income/expense form, I have no intention of doing this.

ArtyJ931

https://forums.moneysavingexpert.com/discussion/comment/82127690#Comment_82127690

I am waiting for defaults and then will set up standing orders to whoever owns the debt.

My plan at that point is to ensure that I have enough to cover my expenses and continue to build a savings pot which will consist of my “full and final” settlement offers a few years down the line. Whatever is left will be divided proportionately amongst my debts and sent over. I don’t have a plan re: paying off in x amount of years yet.

I’m waiting for affordability outcomes and hoping this reduces the overall amount owed. I’d rather be able to afford to live and enjoy life and pay off over a longer period of time than struggle and never be able to cope with unexpected costs etc.

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/82127693#Comment_82127693

Your lenders appear to be all mainstream banks, who more or less adopt similar collection policies.

Now, pay attention to this, as its important, before legal action for non payment can be taken, a debt must first officially default, as up until that point, the agreement has not been broken, so initial non payment to get defaults should not lead to legal action.

ManyWays

Only around 12% of defaulted debts ever get to court,

I have not come across that statistic @sourcrates, do you have a source for it?

If say 50% of defaulted debts result in payment arrangements and they are not taken to court, and say 15% result in some form of insolvency or are written off, so they are not taken to court, then that means 12% out of about 35% of the other defaults are taken to court. (NB I made up those numbers.) So about a third, which is a considerably less comfortable statistic than 12%.

sourcrates

Debt camel was the source.

Although no official statistics are kept, industry analysts suggest approximately 10 to 20% of cases go to court.

They are no more specific than that.