Debt Advice Needed.

A question about : Debt Advice Needed.

Hi, wondering if anyone can give some advice please. I currently have approximately Ј29,500 of debt built up on 8 different credit and store cards. My payments are around Ј800 each month. I am feeling pretty deperate at the moment to the point of where i am not eating or sleeping. My job was made redundant last August although I chose the redeployment route but am only sitting on my 28hr contract with no overtime. For the previous 6 months I was lucky enough to be given an alternative job working 37 hours and on a higher pay scale but unfortunately that job is coming to an end next week and i'm back to my own 28hr job. I have made a quick calculation in my head and when I work out my husband's income and my own and subtract our outgoings I have approximately Ј450 or could stretch it to Ј500 a month for repayments. I have been considering the DMP route but am feeling a little scared, is there anyone who has been or is on a DMP that can offer advice. Would it affect my husband - I feel this is my problem and I don't want to include him in my mess. Also do I have to include all my debt in a DMP I have one card that I would like to keep paying off without including it or is that not possible. I feel so ashamed and embarrased at my actions I can't even tell my husband - I have done the same thing previously and am paying a chunk of our mortgage as I had taken on a mortgage advancement (hence the reason I don't want to tell him- even though he is very understanding). I now know I need to sort out my problems and get rid of all the cards which I should have done previously. I guess if i opt out for a DMP there will no more credit at all I can only buy what I have the ready cash for. I am also worrying because our cars are getting old and one of them will need changing within the next two years and also our household appliances are getting old as well. How badly does a DMP affect any future credit rating. Also is there a maximum time limit for paying off a DMP and do most companies freeze interest rates. I am sorry for such a long speel but I wanted to give as clear a picture as possible. Hope somone can give me advice, I.m feeling pretty desperate almost to the point of sucide.

Best answers:

• Hi Madison. Ok, so its pretty rubbish right now but you appear to have had your light bulb moment and can start to tackle your debts.
  It IS a scary time and you have to realize that for the time being things wont be quite the same, such as spending on credit cards and having a shopping spree. However I guarantee within a few months you will feel a whole lot better about your life and your family relationship and tackle your debts with relish.
  Firstly to get help on here with day to day budgeting post a Statement of Affairs. This includes all your outgoings, income and daily expenditure. It is important to be totally honest with yourself. The figures when written down may scare you but take that with this is as bad as it gets!
  Do not feel guilty. It doesn’t help and you are not the only one to be here and wont be the last. We all initially feel guilty about getting into debt but I for one am proud to be sorting it. Soon you will be looking at people thinking “I’m sorting my debt and you still have your head in the clouds”. So shake off that guilt. Accept the reasons for the debt. It’s happened and you have to live with that for a while – but not for the rest of your life because you are here to sort it, with a lot of help.
  A DMP would affect your husband if he were included. I am with Stepchange and they included my wifes overdraft which was a small percentage of my huge credit card debt. We are in it together. As a couple. I guess, if he has no debt then you wouldn’t need to include him in it.
  I can only speak for Stepchange but yes, they do insist on including all debt. You have to really. Your creditors are not going to be to chuffed to find they are only getting a percentage back whilst one of them is getting his full lot. Besides, you need to stop spending on cards, stop using credit (also known as debt). From now you don’t use credit.
  Repayments are calculated using a formula. On the stepchange website there is a anonymous tool you can use. Put in your budget and debts and it will provide you with a solution. It’s ok to use this. All data is anonymous. Then you could call them or as I did just email them. They are extremely helpful.
  With a DMP your credit value will be trashed. It’s hard to accept at the beginning but soon you will ne living on the available cash you have and won’t need credit. When budgeting for the future allow an amount each month for an emergency fund to replace white goods, home maintenance etc.
  Last bit of advice. Act today. Now. Don’t put it off. You can do this.
  https://www.stepchange.org
  Statement of Affairs: https://www.stoozing.com/msoc/soacalc.php
• Hi Runforlife, thank you so much for the help and advice I appreciate it sooo much. Yes I will do SOA as soon as possible and post it. No my husband has absoultely no debt in his name its just on the mortgage, although, his name is on a joint account that I use and I have overdraft on so I suppose that will reflect on him unless i'm able to clear the overdraft first which is ublikely as I have no spare cash at all when I pay all my monthly payments. I will most likely use Stepchange they seem to be the most reputable company with no charges. Thanks again I appreciate your advice.
• May be worth just trying to take your husbands name off the joint account and then go for it. Also consider getting a new bank account, one that hasn't got an overdraft and from a bank that you have no financial ties with other products such as credit cards, loans or overdrafts. Then arrange for your salary to be paid into that account. That way it will be out of reach of any creditors.
  I went with Nationwides Flex Direct and so far am pretty pleased with the way it operates.
• If you enter a DMP and have a joint mortgage then in all likelihood it will affect your husband's ability to get credit. That is regardless of whether you include or exclude the joint bank account or whether you can get it put in just one of your names.
  He won't become responsible for your debts at all, but as your credit files will be financially associated then when he applies for credit a potential lender would look at your file as well as his (and on a DMP you will almost certainly end up with a wrecked credit file).
  That said it does sound like a DMP may be a good option for you, just that I would suggest that you likely do need to inform your husband if you decide to do a DMP.
• Thanks again for your advice. Yes I already have a seperate basic bank account that my salary is paid directly in to and it has no links or ties to any of my creditors other than our mortgage and insurances are a direct debit from it. I did surmise that my husband would be affected by a DMP in my name. The only good thing I suppose is that he never takes out any credit in any shape or form and has never had a store card in his entire life and I don't anticipate him starting now - just wish I had taken a leaf fom his book then I wouldn't be in this mess now. Do you know if a DMP stays on credit files after the debts are cleared and also do most companies freeze interest on the debts (my debts are with nationwide c.c/ m&s c.c/ debenhams/ santander c.c/ halifax c.c/ next). Thanks again.
• You will get a default within a few months (hopefully - and I say that as otherwise it shows as 'arrangement to pay' and won't drop off your credit file for 6 years until after you have finished repayment whereas a default is issued earlier in the process and henceforth falls off the credit report from 6 years of that date).
  Having said that so far only Natwest have defaulted me! I'm still waiting on the others.
  Natwest, MBNA, Marks and Spencers and Lloyds Bank have all stopped interest from the outset. Barclaycard did at the beginning but reinstated a lower interest charge of 5% or thereabouts which I can live with.
• Perhaps DMP is your best option. I think that you are starting the right way - getting your affairs in order, getting a good overview of the options and make smart decisions based on that. Once the DMP ends, the flags will disappear within six years whether you keep the accounts in question open or you close them. During your DMP, any repayments you make will be reflected on your report each month.
• Hello. Mostly they freeze interest and accept a lower payment if you tell them you are in financial hardship - they are supposed to do this as per the consumer credit act. You provide the income and expenditure details and Step change work out how much thy will pay each creditor.
  Sometimes if the amount they are going to get is close to your contractual minimum payment they still apply interest as it looks to them that you are not in financial hardship!
  Most companies will freeze interest though-if you look on here there at not many times that people say a DMP has been refused.
  As I know from my cost, there is no point trying to financially disassociate if you have a joint mortgage. You need to talk to your husband really. Both your credit ratings will be shot to pieces and this will impact your ability to get a new remortgage for example .You would have to stick with your current lender. So really its best to tell him now rather than having to tell him when he has spotted a fantastic remortgage deal.... Good luck. X
• If you can pay back Ј450 a month and all your creditors will freeze interest then it will take a bit over 5 years to clear all your debts. Of course those are two big IFs, but that makes a DMP a sensible option for you. If it was going to be 10+ years, then you should probably look at other options, but they would all be complicated by your jointly owned house.
  With any luck you will be able to get some overtime and be able to pay the debts off even quicker!
  It would be better if you could tell your husband though. % years is a long haul to try to keep a big secret in a marriage.