DMP Mutual Support Thread - Part 12

Willing2Learn wrote: »

That is why you should check all three CRA files regularly. As an account may just appear on one but not the other two files. Checking with all three CRAs is also key to reducing the risk of becoming a victim of fraud

Fo19nz wrote: »

Hi,
I really need some advice. So I've found myself in a shocking situation - mostly down to my own fault, but some down to an ex-husband who stacked up debt etc - I have accepted this for what it is and will deal with it myself. I cannot tell anyone in real-life about my worries and debts and I'm simply so ashamed. I am a single mum, a teacher, I have 2 children of primary age and I am trying my absolute best to stay afloat but the interest and things on my credit cards is so severe I can barely cope each month after minumum payments and a tiny bit more are paid.
I've read these threads and wondered about a DMP but equally am scared.

I don't want to lose my house, or put that in danger in anyway. Follow the advice given on this forum and by Stepchange and you will not have to worry about your home being at risk

I have 4 credit cards, 2 of which are over £10000 each. Even writing that is just awful. The idea of approaching Step Change is scary but the thought of help is a good thing, but I'm incredibly worried about certain things.

My son has his birthday next month and we are approaching Christmas - if I set up a DMP will my monthly payments literally be everything I can afford apart from the bare bones for food etc? Or will I be able to buy birthday presents or a new t-shirt for my daughter etc? How tight is it? How is the monthly sum that goes to creditors decided? Will I be able to pay £25 for my little girls ballet each half term, for example? When you work out your budget with Stepchange, using their debt remedy took, put in the highest figure for each category that it will let you - if you put in too a high a figure a warning will come up.... just reduce the figure down until the warning goes away. There are allowances for clothes and presents etc. Creditors know that families still have to live. £25 a half term for ballet can be wriggled into your budget somehow - don't worry


If I do have one of these DMPs will my mortgage company know? And could these make them want to stop me having my mortgage with them? I have a fixed rate one now, the rate expires in a few years. I have never told my mortgage company about my DMP. I am up to date with my mortgage payments so it's no concern of theirs. Once your fixed rate expires you will
not easily be able to move to another mortgage offer on a good rate, BUT you will be able to talk to your existing lender and many people on a DMP have found that their existing lender will move them to a current offer no problem. The good thing about a DMP is that if interest rates rise and mortgage payments increase, the amount availabe for, and hence the payments to the non-secured debts goes down - so you are always living within available funds

I read on the threads that people suggest an emergency fund - how do you do this? Stop paying your creditors now and start putting those monthly payments they would have had away into a savings account. Work with Stepchange, or sort yourself out to self manage if you feel able to. Tell Stepchange you want to start the DMP payments in January. If they query why tell them you have essential repairs (boiler / car / etc).

Also, will I have to phone the credit card companies? Even if you go with Stepchange, you will need to contact your creditors yourself. The moment you tell them you are seeking support and advice to deal with your financial situation they will put your account on hold and will not contact you for 30 days.

Would I be better ringing them and asking for help from them directly before contemplating a DMP? Or will this go on my credit file anyway and it be better to go for the DMP? If you feel a few months of reduced or zero interest could get you through this and you could then sort out your debt problem by paying the full amount each month, then yes - contacting your creditors and seeing if you negotiate short term help may be the option for you. Do remember, creditors may offer to reduce or waive interest for a short time, but you will be back to where you are now within a few months. What will change that will make a difference - this option is usually for people who have been unable to work for some reason, eg. extended sick leave, but they know their situation will recover and they can afford to repay at current rates once they are back on their feet.

Or should I do it myself? I'm not sure I'm strong enough to handle it this way. I self managed my DMP - but for the first year I was with Stepchange and I needed that year to help me get started. Some people plod through their DMP with support of a charity like Stepchange, others start with help (like I did) and then switch to self managed, and others start self managed straight away. You can decide for yourself which is the best way for you to move forward. I will say that even though Stepchange collected a single payment each month and distributed this amongst my creditors, I still had to deal with all the correspondence with my creditors. That was a shock for me at the beginning - I thought Stepchange would have done that - but they don't.

Am so sorry for all these stupid questions, would really appreciate your thoughts. No stupid questions on here - we've all been where you are now. We all know how your brain races with worries and questions and you just cannot sleep or concentrate. If you decide to go down the route of a DMP, then I can honestly say that within a few weeks you will be breathing a huge sigh of relief and enjoying each day again. It really does change your life that quickly.