DMP - advice needed

Exhibit07

Hello

after speaking with StepChange and Debt Camel it looks as if a DMP is my only option.

I currently have 85k debt (this includes interest on loans)

Monzo - £15k

Updraft - £21217

Updraft - £4600

Updraft - £4000

Norvuna - £9251

Zopa -£6500

Zopa - £7300

Zopa - £6324

Catalogue - £1218

Credit card - £1300

Credit card - £2800

Credit card - £1700

Salary Finance - £5000

I need to understand how best to start a DMP to default as quickly as possible so I can start rebuilding my credit.

Do I just submit my DMP now or do I wait is someone able to advise me on the best way to do it?

Please be kind this has been horrendous and I’m making myself ill with the shame of it all.

TattieHeid

I'm also in a DMP and I arranged mine through StepChange. They advised me to cease all payments towards my creditors which meant they started to default after three months. One didn't default until 8 months later but I've raised a dispute with it on my credit file and it should be amended. I believe they need to be marked as default between 3-6 months after payments have ceased. I don't think this can be done faster.

I know people have strong opinions about doing DMP yourself or through a company - I have found using StepChange has been simple as they deal with it all. I know what you mean about the feeling of shame and having someone else managing it helped ease this a bit. Best of luck!

ManyWays

Salary Finance, is that deducted from your wages? It may be hard to get them to stop doing that in a self managed DMP, but it can be included in a StepChange DMP I think.

Exhibit07

https://forums.moneysavingexpert.com/discussion/comment/82167943#Comment_82167943

yes it is. I’m worried about that one do you think I should try and leave it out?

Exhibit07

I’m confused on how the DMP process works.

When do I stop paying creditors?
At what point should I get step change to do my DMP?
if a loan defaults and goes to a DCA how would I be able to set up a DMP?

I feel physically sick at not paying my debts anymore so just need some help and advice before I accept and sign the DMP with step change.

sammyjammy

First things first stop making payments now, leave the Salary Finance for now, that'll be tricky. If you've already decided to do a DMP with Stepchange then I'd still advice sort yourself out with a new budget and put aside some money for an emergency fund first. Do you own a property?

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82167980#Comment_82167980

Stop paying them now and ignore them completely then they should start to default. 3-6 months is the normal sort of timeframe but some lenders can be difficult and take longer. Once they are all defaulted then you can approach Stepchange and set up the DMP, alternatively you can manage the DMP yourself and just start paying them as they default which can be a lot simpler than using Stepchange.

If a debt goes to a dca then you just make the payments to them instead, Stepchange will take care of that if you use them, if you self manage then they will just write to you telling you how to pay. Make sure you pay by standing order so you stay in control, DCAs like you to pay by debit card or direct debit as it makes it more difficult for you to change the payment amount.

While you are waiting for defaults then live on your dmp budget to make sure it's achievable and save the DMP payments you would be making into your emergency fund.

ManyWays

https://forums.moneysavingexpert.com/discussion/comment/82167977#Comment_82167977

No, they are often pretty expensive!
I think you should get a StepChange DMP set up. Stop paying all the others immediatley.

You can always end the StepChange DMP after 9 months if a lot of the debts haven't been defaulted, or make complaints to get defaults added. But that will get the salary finance one defaulted.

Exhibit07

just to give further context on my situation as I didn’t include it in my original post.

my income is 37k per year plus a commission which means I earn approx £3300 per month after tax. The commission could change instantly as it isn’t written into my employment contract.

my minimum payments across my debts is £2700 per month. I live in a family owned property however I have been asked to contribute more towards that and have to over utilities myself so I literally have nothing left and I’m running up more debt on my credit card to manage.

RAS

You are in the classic hole. Because you income does not cover your costs and debt repayments, you are using your CCs to make up the gap. Which means your debt increases every month. And with this much debt, compared with your income, you need to act promptly.

Please do a proper SOA, with expected living costs, but no amount of fiddling will sort this out.

Default the lot. And read up on affordability claims re Updraft and Zopa.

ManyWays

Also affordability claims to novuna and Salary Finance!