DMP mutual support thread part 13 !!

im on the same boat as you mike, just sent my application yesterday, personally i have stopped all DD to my creditors, as well as these other steps:

I have created a budget with StepChange and I have agreed to the plan by sending them the plan signed and the information about my creditors and income (still waiting a response on the activation of the plan. Just did this yesterday though!)
I have sent a letter to all of my creditors explaining that I am setting up a plan with the debt charity and asking them to give me a month of breathing space and to freeze my interests and charges while I come back to them (they don´t have to agree by the way, but I´ve heard that most of them are willing to do so, at least for a while). I will copy the basic letter I have sent down below!
I have cancelled all my direct debits to my creditors (this felt awful as I have never missed a payment yet!)
I have opened a basic current account with a debit card and a basic savings account in a bank with whom I have no credit.
I have changed my bills to the new account as well as letting my HR department know that I need my income paid in there.
I have created a budget accordingly to the plan in YNAB.
I have put all my other credit cards, debit cards (from accounts I have in overdraft), store cards etc in the back of my underwear drawer. Now I only carry my debit card and £20 in cash. And my YNAB app. Anything I need to buy has to be accounted for from either the cash in my pocket or the cash available in my account at that moment (double checking in mot under budgeting any of my basics!)

Hi all, haven't been on this thread for a long time now.

Started my DMP in 2011 and it took nearly 5 years to pay it all off. It was very hard at times, such as when my son got married and when the car went wrong. Christmas and birthdays were difficult, not much spare to buy presents etc.

However we got through it and now I have a credit card again! I use it much more wisely now though. We've moved house and haven't had any problems really with our credit rating affecting what we have wanted to do.

I'm glad I did the DMP, to be honest there was no other way, we had so much debt we couldn't cope any more. The help on this forum was outstanding, so stick at it folks, there is light at the end of the tunnel.

Could some tell me process off a dmp with sc. and how long it takes in to effect.
Also seen people say to stop paying for a couple off months to build an emergency fund, is this right ?

PMarie1981 wrote: »

… I've been with step change for a few years now and my current debt is just over £10,000. Six a counts have defaulted and two haven't, one is with very catalogue and the other is argos. Both of these the interest have frozen but showing late payments on my credit file.

Anyway I have been lucky enough to have family who said they will pay all my debt! But I dont know where to start, do I contact stepchange and let them deal with the creditors or do I write to each one that's defaulted and ask for a reduced settlement or just pay the full amount to get it finished with? Also if I pay of Very and Argos, would they then bill me for all the interest I haven't paid. Sorry if that's a silly question but I'm worried I pay off the debts then end up with still owing them further down the line?

Hi and welcome to the forum

I never used StepChange for my DMP as I self-managed. I believe that SC will want you to evenly distribute the money fairly to all your creditors. If it were me, I would cut out SC from the process and negotiate directly with the creditors. You want to make offers of reduced final figures and see whether they will accept. National Debtline have a letter template that you could use. Below is their factsheet which describes how the process works and includes a link for the template.
https://www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

You are far more likely to get a lower settlement figure for accounts that have defaulted than for account that have not.

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Mike1006 wrote: »

Could some tell me process off a dmp with sc. and how long it takes in to effect.
Also seen people say to stop paying for a couple off months to build an emergency fund, is this right ?

It is recommended that you delay the start of the DMP by 3-6 months to allow you the breathing space to build a reasonable Emergency Fund. You can send holding letters to all your creditors, explaining what you are doing and giving them a start date for the DMP. A letter template is linked below:
https://www.nationaldebtline.org/EW/sampleletters/Pages/Hold-action-on-your-account-%28sole-name%29.aspx

Mike1006 wrote: »

Thanks for the advice. I know this might sound daft but is it that easy to set up a dmp with sc ? Seems straight forward. Once I send my forms to sc will they deal with everything after that ? And how likely is it that company’s will reject an amount that sc will offer on my behalf? Sorry about the questions, just want to get this right

Yes - it's all pretty straightforward.

It doesn't really matter whether your creditors accept or not, SC will send them the offer of payment with a copy of your I&E which will demonstrate the amount offered is the affordable amount calculated through their methodology of allocation. Most, if not all, will just accept it.

You can expect your creditors to send various letters which outline what will happen if you don't keep up with your contractual payments - this is standard computer generated blurb and something they have to do. Just file those letters away and let the DMP run its course.

Do please take heed of the advice to stop your non priority payments now - and wait a few months before returning the DMP paperwork so that you have time to build that emergency fund. Write holding letters to your creditors as suggested by W2L outlining your situation and plans.