Hello from a newbie and some advice please?

WhoopieDoodle

Hello everbody. I have been lurking for a few days but decided it was about time I joined in and stopped hiding!

My husband and I are about to embark on a DMP with PayPlan; we spent several days working out where we could cut back (i.e., have cancelled Sky, we are having a water meter installed, cancelled newspapers, etc etc) so we can make the monthly payments to PayPlan and keep our heads above water.

The total debt is £45,000 divided between 7 credit cards and an overdraft (I feel sick as I type these figures)

Due to the amount we are able to afford each month it will take approximately 37 years for these debts to be paid off. We really do not want this situation with us into old age but we do have a lifeline in that my husband retires in 5 years time and will receive a lump sum. From this lump sum we will be able to pay all the creditors off (even the full amounts if required)

I am dreadfully worried that the creditors will not accept our current proposals but we really cannot afford a higher payment. We do not want to go bankrupt etc as we know the lump sum is guaranteed.

So, can we use this as a bargaining tool if the creditors get nasty?

We also plan to increase the DMP payment each year when our wages increase.

Basically, can we keep the creditors happy for 5 years with our current payment knowing they will receive full payment at the end of this time?

I hope you can understand what I have typed ... I am really nervous and it is quite scary admitting the debt to people.

Thank you for your time.

HHH_2

Im sure if payplan have offered you a DMP as a proposal they will feel confident your creditors will accept your offers. It's very scary to be in this situation isn't it but you've now done something about it so well done, you will start to feel better soon. As regards telling creditors about the lump sum Im not sure what's the best thing to do so I suggest you ring payplan again and ask them they will advise you as to what is best.good luck with it all.

poppett

Just wanted to say welcome Whoopiedoodle. I'm sure someone who knows a bit about DMP will come along and advise you shortly. But sit back, relax and have a read through these great boards.

RAS

Hi

Is there a reason that you do not want to go BK - equity in a house etc?

Also, are you addressing the issues that led to the debt building up in the first instance?

WhoopieDoodle

HHH and Poppett, a huge thank you for your replies.

I try to relax but it is very difficult. As soon as I wake I think of our debts and these thoughts stay with me all day until I go to bed. I think it will get easier with time and once we know our creditors are happy to accept the PayPlan payment.

Something that did shock me was the amount of money hubbie and I have wasted on silly things like coffee in town, sandwiches, impulse buys. It's quite ridiculous.

The daft thing is, I have enjoyed doing a budget as it has shown us the error of our ways and taught us a valuable lesson i.e., if we can't afford it, we don't have it!

I will ask my husband to contact PayPlan and see what they say regarding his lump sum payment. We have already decided we will use it to clear the debts and never touch credit again but we hope and pray it will be enough to keep the creditors at bay for 5 years.

This site has been a Godsend to be honest. I felt so alone and had nowhere to turn, then I found the forum and it really has helped.

I'm on a mission to save money - I found a penny in a box under my bed yesterday! What's the saying? Look after the pennies and the pounds take care of themselves?

:T

WhoopieDoodle

RAS, hello.

Bankruptcy could cause problems with my husband's job. Also, we did think about selling the house but after the mortage is paid off along with the secured loan, there would be nothing left.

We feel the only option is to pay what we can afford for the next 5 years, then when my husband retires, we can pay all the debts and have a clean slate.

The issues that led to the debt were due to my husband having a very large secured loan before we married (I didn't know about it) and using credit cards to fund our lifestyle.

I only found out about the debt two weeks ago, which is all in my husband's name, but I married him and I took vows that I would stand by him, so I will. Also, although I believed he could afford our lifestyle (I never knew exactly what he was paid etc) I benefitted from the overspending so believe I'm as much to blame.

What a pickle eh?

Donedoingdebt

Obviously Payplan will advise on this lump sum issue. But personally, I would not mention this to any creditor as they will be like vultures waiting to swoop in 5 years time.
I'd stay quiet about it & if in 5 years time, when you actually receive this money, you still wish to pay off all debts then by all means do so.
If this lump sum is a cash payment as a %age of his pension, then please be aware that this will subsequently reduce the amount of weekly pension he receives & that may have a significant impact on his lifestyle in his retirement years.
As you're realising now, you'll begin to feel a lot better when you can account for every penny & stay in control of your finances.
As others have said, relax & let Payplan take care of it. It's what they're there for.

WhoopieDoodle

Donedoingdebt, thank you for your reply.

Hubbie is going to speak to PayPlan regarding the lump sum. We looked at his forecast last night and have decided how much to commute.

At the moment we are trying to deal with the debt problem and looking to the future, with the hope we can start again. The age we are at depresses me somewhat, but when OH retires he can gain further employment and I am self-employed so don't see a problem in that respect.

I'm trying to take it one day at a time but wish I could think about something else instead! Argh!

boredofbeingathome

Hello whoopiedoodle, well done for posting. I know its hard but try to stay positive. Perhaps if you posted your SOA then people may be able to suggest more ways to help. The one thing i do advise though is to look at other newbies who have posted, from being very depressed at first posting the more they post and look for solutions the better they feel and the posts seem to be more upbeat. There are lots of tips on old style board about how to save money especially meal budgeting. Ithought i knew how to split a penny in two but this brings it to another level and get interest on the split penny!! Good luck and keep head held high, i think sometimes the problem comes when we realise how alone we feel but you're not.

Verbatim

Hi and welcome,

I agree that things will get easier once you're in control. Although it looks like 37 years now you'll probably find that this date could come down once you've strarted.