A question about : Is a DMP really the right thing for us?
Hiya all,
I've been reading the threads and commented on posts a few times, but my username was a bit too personal so I have been wary of saying too much about myself if you know what I mean 
Any whoo, I've set up another account with a new, not personal name, so am looking forward to my new found freedom haha!
I've been considering entering into a DMP with Stepchange. I've gone through their online assessment and its what they recommend.
Hubby works full time and as I've been a stay at home mum to our 2 children for years, I'm re-training which involves being on a placement (unpaid) and attending courses mon-fri.
Although my hubby brings the money in, I'm in charge of paying the bills. We have had late payments here and there on non secured debts but are up to date on everything. We (I) have been just about keeping our heads above water, but the unsecured debts are strangling us and we are not living. We also got married last March, which we did quite cheaply but still has hit us hard. I'm so stressed out as I feel like I'm on my own to deal with it all, while hubby is in work. I'm dreading the mail coming, while I'm living from paying one bill to the next.
In hindsight this has been building up for a while as paying debts has been swallowing up income, meaning that whenever anything has needed replacing or the kids have needed clothes I've relied on BNPL's on the catalogue. Bet your all reading this and can already guess whats coming next....Yep the BNPLs have been ending one by one over the past 5 months or so, bumping up the balance with not only the cost of the items but the interest accumulated during the payment free periods. This has meant that a bill that was Ј30 a month last oct his risen to this months bill of Ј265. There are more BNPLs due to go on over the next few months too. We were just about making ends meet when the bill was lower, but I think it's this increasing by Ј235 a month that has really tipped us over the edge.
Our other outgoings include:
Bank loan - bal Ј4965 - Ј219pm
Current bank od - limit Ј2950 and living in it, maxing out every month - interest charges Ј40pm
Other od with old bank Ј667 (long story but there is a genuine reason for this od, we didnt cut and run have been paying Ј15 a month to cover int but they now want to set up an arrangement to clear debt so will be at least Ј100 a month
Next - bal Ј880 - last bill Ј91
and the previously mentioned..
Catalogue - bal Ј5254 and climbing as BNPLs are added, the items ordered are included int he balance, but as they are coming off BNPL the interest is going on too - currently Ј263
Total unsecured debts Ј14716 costing Ј713 a month.
To live normally SC says we need Ј2269 a month to cover mortgage and living costs. Total guaranteed income is Ј2497, leaving Ј228 to pay unsecured debt.
When filling in the costs, I did go a little higher on things to be on the safe side and to be able to start saving a little each month for emergencies as we don't have anything at all at the mo and the whole point of this is to have money to pay for breakdowns etc at home and not have to borrow to do anything. Hubby has also been working a lot of overtime to be able to meet minimum payments, living in work most weeks, 7 days a week. I haven't included the money from this either, because 1. its not guaranteed that there will always be overtime, it all depends on if anyone else takes holidays/is sick etc and he has to share the overtime with other people who want it, which he's not at the mo and it's gonna start causing bad feeling at work. 2. its just not sustainable, he's working 12 hour shifts often only having 1 day off in 12 if he's lucky and its not easy work, i'm worried he's gonna make himself ill.
So after all that lol, question is....Should I start the DMP with SC and let all our debts go belly up or is it worth me just defaulting on the catalogue?
my reason behind this thinking is that things like Next and the second account od are only short term problems really as the od will be a 6 month plan and although the Next bill is high, it reduces a lot every month, last month the bill was Ј99.odd this month its Ј91, so we are getting somewhere aren't we?
I dont know 
am I just being unrealistic and looking for excuses to keep juggling the balls that I have been dealing with on my own for so long? Just delaying the inevitable. I'm just so worried about this and whether i'm doing the right thing. I feel like I've failed
I feel like I should explain that a lot of the debts accumulated when hubby had to take a pay cut and reduce hours at work for just over a year during the recession, it was either that or loose his job. This started the cycle and I think we've been digging deeper ever since really, with the cost of living going up and up and the minimum tier Child Tax Credits that we were receiving stopping because we are above the income threshold. They are also taking Ј23 a month off us due to overpayments.
Also one more thing worrying me is that I'm training to work with children, which I need an enhanced disclosure for. Will defaults show on them when I'm checked? How bad can it get when having a DMP? How often do these kind of debts end up with a CCJ? Because I'm sure that they will show up on my disclosure?
I'm going to stop typing now, because I'm stressing myself out more (I'm having chest tightenings so am gonna go take some kalms now) and as you can see, I'm one of those that could go on and on lol.
Many thanks in advance to anyone who replies
Best answers:
- Hi there, whoever you are!
Can I strongly suggest putting an SOA up so that we can see the overall picture in the numbers alone?
I don't think too many will be able to make a judgement or give advice until we can get the overall picture.
Good luck, get an SOA together and you will receive lots of advice! - No of adults in household - 2
No of children - 2
Total monthly income including child ben - Ј2497
Outgoings
Mortgage Ј698
water rates Ј38
council tax Ј94 its 10 payments of Ј112 but SC took yearly payment and divided by 12
gas and elec Ј100 This is a bit low too and i'm waiting for the increase which i'm guessing will be to about Ј135 a month
home insurance buildings and contents Ј29
TV, landline and Broadband Ј60
Tv Licence Ј13
Mobile phones x2 Ј28 for both
repairs and maintenance Ј13
Household appliance rental Ј7 - its one of these insurances on our washing machine that we own, but our machine is over 5 years old and sounding dodgy and we've called them out twice already so I am reluctant to cancel this at the mo, because my machine is on it's way out for sure and replacing it ourselves is gonna cost more than what the policy has left to pay.
Fines/CCJs/Decrees - Ј23 its the previously mentioned Tax Credits overpayments that we are paying back. Didn't know where else to put this payment
Life insurance and pension payments Ј84
Transport
Spares and servicing Ј15
Car Tax Ј12
Insurance Ј50
Fuel and parking Ј125 Hubby back and fore work
Food, toiletries and cleaning Ј500 heres where ive gone over a bit to be able to put money aside each month
School meals Ј100
Pet food, insurance etc Ј15
School trips/activities Ј11 my eldest comp is really expensive, they go on trips all the time. This doesn't near cover it, but it was the most SC recommend so I put Ј12 and going over a bit on other things will help to cover it a bit.
Medicine/prescriptions/dental and opticians Ј42
Hairdressing Ј15
Union fees Ј22 Hubby work union
Clothing and footwear Ј76
Newspapers,magazines, sports, hobbies, entertainment and kids pocket money Ј50
Sundries Birthdays, Christmas etc and Emergencies Ј49
Unsecured debts
Bank loan - bal Ј4965 - Ј219pm
Current bank od - limit Ј2950 and living in it, maxing out every month - interest charges Ј40pm
Other od with old bank Ј667 (long story but there is a genuine reason for this od, we didnt cut and run have been paying Ј15 a month to cover int but they now want to set up an arrangement to clear debt so will be at least Ј100 a month
Next - bal Ј880 - last bill Ј91
Catalogue - bal Ј5254 and climbing as BNPLs are added, the items ordered are included int he balance, but as they are coming off BNPL the interest is going on too - currently Ј263
Total expenditure Ј2269
Surplus Ј228
Total unsecured outgoings currently Ј713
Ј228 (surplus) - Ј713 (unsecured payments) = -Ј485
As mentioed in my opening post, these payments have been maintained by lots of overtime and not forgetting that Ј85 of it is for the second od that is only getting a Ј15 payment to cover the interest at the mo, but the bank wants to set up a plan to clear it @Ј100 a month
I hope I've not missed anything - You've missed out your unsecured debts! :-D
- Hi Liv. You have taken the first big step by posting on here.
Just a few comments but I'm sure others will be along soon!
School Meals: any chance of Children taking packed lunches instead?
Medicines etc look high at Ј42.00 per month, what does this cover?
Regarding an enhanced CRB debt, ccj's etc will not show up on one of these, it will only show criminal not civil matters, so please try not to worry about this aspect.
Can you also list all your debts together with the apr's please?
Good luck.x - You're actually not in that bad shape to be honest. A DMP will certainly help you with the administration of everything, which looks a little chaotic to me but to my eyes everything could be accomplished here by talking to a few of those to whom you owe money and a combination of snowballing debt/cutting spending in some key areas.
The old bank OD people can go jump, in my view. It is completely unacceptable of them to expect you to pay Ј100 a month to repay this.
I would begin by getting in touch with someone in their senior complaints escalation service (they all have something like this) and asking for a breakdown of what is fees, interest, etc.
Explain that they can't get blood out of a stone, ask them to freeze the interest and your payments will then chip away at the capital. I assume that this facility is no longer available to you anyway, so it shouldn't have any effect on your day to day spending.
There are some areas where I think you should cut your spending while you deal with the debts. Groceries are one, clothing another. Estimated savings to be made: Ј200
I appreciate that you have kids but packed lunches, home cooking and batch cooking can be done for considerably cheaper than you are listing. You would be amazed at how much you can potentially save here if you start dropping brands and planning ahead with your meals (and the costs attached thereto).
TV Landline and Broadband seems unusually high - I pay about that at the moment and I have the XL virgin tv pack with high bandwidth broadband etc. If that's what you are on then you need to cut it back - get freeview for a bit, there are plenty of cheapo broadband and phone deals out there too which should be able to save you. Estimated savings to be made - Ј35
Join the MSE Energy club thing (one of the options at the top) and fill in details to be absolutely sure that you are on the cheapest deal possible for your gas and electricity.
Now you mention that you have BNPL on your catalogues. I've done this and it sure stung, mainly because the interest became payable which caused the monthly fee to rise so high. It was a while ago but I got in touch with Shop Direct and they kindly agreed to freeze interest and have me pay at a steady rate. It stopped me from being able to use the catalogue until it was clear, but it proved to be the best thing I could have done. I managed to negotiate a relatively painless six months of low payments with them which bought me time to be able to throw all available money at the other debts. Once those were done I had much more available to me for Shop Direct and overpaid the catalogue to nothing within a year. I strongly recommend getting in touch with your catalogue company and talking them through the situation. Offer them say Ј100 a month for six months and ask to have it reviewed after that.
This will let you use your other available money to pay down some of the other stuff, including your current account overdraft and get rid of Next Catalogue completely.
Yes, you could go into a DMP but I honestly don't think you need to - a quick chat with a couple of these companies and some sensible offers of repayment should see you right.
But you'll need to cut some of your services down and start being a bit better with how you spend your money. - The complicated one first -
Catalogue APR 19.9% - Total Balance including items still on BNPL Ј5254.
Balance that I'm paying off Ј3691.74. Basic interest added last month was Ј35.96, not including Ј268.35 BNPL interest applied.
The minimum monthly payment is slightly higher than the take 3 interest free payment. I'm not good enough to work out whats what, but I rang them to ask about it and they told me that because I am paying over the take 3 payment when paying the min, that I wont pay any interest on items that qualify for the take 3 plan, but not everything on my account qualifies and that is why there is some interest being added every month. My statements don't tell my what is and is not being charged interest though, so I've not got a clue what is going on.
Main account OD limit is Ј2950 - Nominal EAR 1st Ј100 0.00% Over Ј100 is 18.28% or annual rate is 19.90% after the first Ј100. The balance increases as the month goes on as hubby is paid weekly and we save for the end of month bills, then is usually maxed out when everything is paid. Interest is usually between Ј37 and Ј40 a month
Bank loan with same bank as main account - balance is Ј4964.24. Not sure what the APR is at mo, I can get it off the agreement, I will have to dig it out. If it helps Our balance before our last payment was Ј5112.96, we paid Ј218.21 and we were charged Ј69.49 interest. The interest is calculated and applied monthly so it works more like a repayment mortgage than any loan we have had before.
Other bank account APR To follow
Next APR 25.99% balance Ј880 - Your hubby's bad back and meds? Have you considered a chiropractor? I will cost a bit for the treatment but its definitely worth a shot! And in the long run would be financially viable
I was diagnosed with frozen shoulder and doc said roughly two years on painkillers and steroid shots before its right. I visited the chiropractor and it was completely normal afte only a month. You'd be surprised what ailment can be treated - You'll find that it's less about your current issues and more to do with having more than one current account. I wanted another current account from lloyds and they wouldn't give it to me because I have an open natwest and santander account on my credit file - despite not having used the natwest account in years and years - they don't seem to like you having more than 2 it would appear.
- I think that you should make more of a fuss with Barclays. Try calling head office and asking to speak with the chief executives office - if they query why, explain that you need to talk to the most senior complaints team.
They will have more powers than the normal guys and discretion to help you out, particularly if it looks like you're going to cause a lot of fuss (like me haha).
Virgin are talking nonsense when they make those claims, again try to get through to a more senior team which will have more discretion than the normal phone people. I managed to get a lot of leeway from them when I called. Have you really been with them less than a year? Seems unlikely, surely you can give a month's notice and demand a cessation of service? I'd ask them how you go about doing that as well.
They aren't comparing apples with apples. What they have said is that the cost of your current large (and discounted) package is more expensive than the cost of a potential future smaller (and undiscounted) package. Which may be true, but what is stopping them from applying discounts to the smaller packages?
In my view you really do want to drop that food and clothing budget a bit more - I know it's very hard but forward planning, batch cooking etc should be able to save you more money. Better to cut deeper than you need - try some of the money saving recipes on the old boards here. - Another thought, or 3 lol
1. If I move our main banking to Halifax, will Natwest start demanding all of their od back within 6 months like barclays?
2. Does anyone know what kind of interest I'll be paying if the od is always maxed at about Ј2950 and so how much I would have to pay to them each month to keep chipping away at the balance? Nominal EAR 1st Ј100 0.00%, Over Ј100 is 18.28%, or annual rate is 19.90% after the first Ј100. Currently the balance increases as the month goes on as hubby is paid weekly and we save for the end of month bills, then is usually maxed out when everything is paid. Interest is usually between Ј37 and Ј40 a month at the moment.
3. Can they increase the APR on the loan if we don't bank with them anymore? - 1. Possibly, but again hit their head office etc.
2. Looks like 19.90% but I would certainly try to negotiate (see 1) with them to get it frozen given the exceptional financial circumstances.
3. Depends on the loan - check the small print, they might very well have a fixed rate or it could be variable. My understanding is that the majority of loans the banks have in very small writing the ability to change it at will for whatever reason they like including no reason at all as long as they jump through various regulatory hoops in terms of letting you know when etc. Same as (1) applies here though, if you are meeting payments as requested by them at the outset of the agreement it's unlikely that they will do something which could potentially jeapordise the loan being repaid.
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