DMP Help & Advice needed

Primoris

Hi everyone,

I’m hoping someone with experience of DMPs might be able to give me some advice, as I’m feeling a bit overwhelmed and don’t really know where to start.

I’ve spoken to StepChange about my situation and they’ve talked me through a Debt Management Plan, but I’m still unsure about the practical side of actually getting started.

My main question is: do I just stop paying my debts / let them default and then go from there? Or is there a particular process I should be following with my creditors before starting the DMP?

I’m particularly worried about the possibility of getting a CCJ. Unfortunately, because of my job, a CCJ could potentially mean losing my employment, so that is a really big concern for me. I appreciate that a DMP doesn’t necessarily prevent legal action, but I’d really like to understand how people manage this risk in practice.

I also have ADHD and suffer from stress and depression, which makes dealing with all of this quite difficult and overwhelming at times. Does anyone know whether this means I might qualify for any additional support, reasonable adjustments, or extra help from creditors or StepChange? I’d be interested to hear from anyone who has been in a similar situation.

I’ve put together my SOA below. I’d really appreciate it if anyone could have a look and let me know whether it looks realistic, whether there’s anything I’ve missed, and what you would do in my position.

I’m also wondering whether I should be speaking to StepChange again and getting them to set everything up, or whether there’s something I need to do myself first.

I’m feeling quite anxious about the whole thing, so any advice, experiences or pointers from people who have been through a DMP would be massively appreciated.

I’m really hoping to get myself back on track and finally become debt-free.

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... [b]

Monthly Income Details[/b]
Monthly income after tax................ 3915
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0[b]
Total monthly income.................... 3915[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 1601
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 227
Electricity............................. 60
Gas..................................... 40
Oil..................................... 0
Water rates............................. 70
Telephone (land line)................... 0
Mobile phone............................ 12
TV Licence.............................. 15
Satellite/Cable TV...................... 0
Internet Services....................... 22
Groceries etc. ......................... 300
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 30
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10.6
Pet insurance/vet bills................. 40
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 20
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 30[b]
Total monthly expenses.................. 2517.6[/b]
[b]

Assets[/b]
Cash.................................... 300
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0[b]
Total Assets............................ 300[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 335000...(1601).....0[b]
Total secured & HP debts...... 335000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Plata Loan.....................27847.3...581.......13.88
Creation Loan..................27397.8...517.......9.2
Abound Loan....................10203.1...247.......15.3
BARCLAYCARD CC.................558.......33........0
PAYPAL CC......................2700......56........0
HSBC CC........................5471......144.......0
American Express CC............661.......36........0
American Express CC............6067.11...250.......0[b]
Total unsecured debts..........80905.31..1864......- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 3,915
Expenses (including HP & secured debts). 2,517.6
Available for debt repayments........... 1,397.4
Monthly UNsecured debt repayments....... 1,864[b]
Amount short for making debt repayments. -466.6[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 300
Total HP & Secured debt................. -335,000
Total Unsecured debt.................... -80,905.31[b]
Net Assets.............................. -415,605.31[/b]

Thanks again for taking the time to read this and for any advice you can give.

caprikid1

How much is the house worth ? No Cars ? No B&C insurance ?

Primoris

Hi, the house is worth 352500 and I already paid the B&C insurance yearly. I don't drive.

Sherlock33

Two adults in the household but you seem to be responsible for all the household costs alone?

sourcrates

If potential legal action is a worry, there are ways to mitigate the risk, such as a Tomlin order for example.

Lets be clear, the vast majority of legal action is taken by debt purchasing companies, long after an account has defaulted and been sold on, possibly because no contact has been made with the debtor, and thus no payments are being received, in that scenario, action through the courts becomes more possible.

What usually happens straight after a debt defaults is pretty standard throughout the banking industry, that will normally involve your debt being assigned to a debt collector or sold to a 3rd party, or even retained in house by the original creditor, only in quite specific and rare circumstance will legal action be taken at this point in the process.

Once a DMP is up and running, lenders are usually happy for that to continue, with no need for further escalation, taking legal action is still no guarantee of being paid, it does give the lender more options, but they still get the same budget derived payment, they would have got anyway, sometime a CCJ is used to then obtain a charging order or restriction on your property, if you`re a homeowner, as a way of securing a debt, if you owe a lot of money for example.

Normally most DMP`s complete never having seen a court room.

If you have reservations, worries or concerns, then just allow Stepchange to get this going for you, you will soon see how simple debt management is, you can always ditch them at a later date and self manage, if you wish, honesty there is nothing to worry about, your lenders pay for Stepchange to provide you and many others, with this service free of charge, affordability is key to everything these days, the service is there, if you need it, use it, simple as that.

Primoris

Thanks Sourcrates, my only worry is reading about how aggressive Amex can be and I can't afford to lose my job.

ArtyJ931

hiya

You may have paid the insurances for the year but you need to be setting aside a monthly amount to cover the next annual cost of them- so you get an accurate picture of your actual costs.

Groceries look low to me for two adults. Gifts is zero which is unrealistic over a year. Entertainment and holidays also look very low unless you literally don’t go anywhere or do anything?

Emergency fund I don’t think is adequate to cover house maintenance costs, white goods replacements etc as they come up.

Medical costs should cover dentists, glasses etc too so have another look at that if you need to cover those costs. Even nhs check ups cost.

gas and electricity look potentially too low to me.

have a look at what you’ve been spending over the last few months to see what a realistic SOA is for you. There is no point setting yourself up to fail/ live in abject misery.

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/82161393#Comment_82161393

In that case you could potentially avoid problems with Amex, who I agree, can employ quite aggressive collection tactics, by stopping all payments to other non essential creditors, and prioritising the two Amex debts.

Getting them paid off first, without even having missed a payment to them, would remove any possible threat of legal action, and put your mind at ease somewhat.

The rest of your creditors are pretty much mainstream and follow regular collection activity, and nothing much will happen if you miss half a dozen payments to this lot.

RAS

Another querying why the other adult is not working or contributing? The fastest way to increase income is to use their tax free allowance.

And you need to be more realistic about costs. £120 will buy you both socks, knickers and shoes. The rest you can get from the chazzer but life without a decent warm coat is miserable.

Anything for which you pay annually needs to be accounted for monthly at 1/12th the cost. Put that into a savings/budgeting account so that it's there when it becomes due rather than being a stress.

You also need enough in the emergency fund to cover at least a month's mortgage and a house repair and a failed white good. Stop paying everyone except Amex for 6 months, pay Amex down and save what you can as well.

ManyWays

Can I ask what your current mortgage rate is and when the fix ends?

I agree with the points several people have made about what you are paying for and what (if anything) your partner is paying for.

I may have missed some recent issues, but I think the concerns about Amex, although often mentioned, are based on collections activities a while back. Does anyone think this is common now, because I have not seen it.