General advise

[ha12006]

Hi

 

I would like general advise please

 

long story short, i am living with my family and now on verge of leaving and now my circumstances will change, particularly my outgoings which will mean i will no longer be able to pay the minimum payments for the loans and cc.

 

if i continue paying the minimum payments, all my debts will be cleared off in 3 years, however due to personal circumstances i wont be able to afford.

 

i have been advised to consider DMP or IVA as my oustanding ammount is in excess of 15-20k.

 

before i make this change, i will be consulting with companies like payplan or step change and wanted to query if they 'check' my outgoings for example request my past three months bank statements etc. because im sure they will be interested to know how i managed to cope for 4 years and why not now.

 

Regards

Edited July 19, 2013 by ha12006

[Wintry]

Hi

 

I would like general advise please

 

long story short, i am living with my family and now on verge of leaving and now my circumstances will change, particularly my outgoings which will mean i will no longer be able to pay the minimum payments for the loans and cc.

 

if i continue paying the minimum payments, all my debts will be cleared off in 3 years, however due to personal circumstances i wont be able to afford.

 

i have been advised to consider DMP or IVA as my oustanding ammount is in excess of 15-20k.

 

before i make this change, i will be consulting with companies like payplan or step change and wanted to query if they 'check' my outgoings for example request my past three months bank statements etc. because im sure they will be interested to know how i managed to cope for 4 years and why not now.

 

Regards

 

Hi

 

They might ask why you are struggling and if you think your situation will improve again or indeed if it will worsen further but that should be about it on that front.

 

There are always reasons why people find themselves struggling and the advice and appropriate solutions should be based on the financial situation you are seeking help with, nobody should ever judge you.

 

You have not said who has advised you to consider a DMP or IVA, the latter is a formal insolvency solution so I was wondering if bankruptcy has also been discussed or other options for that matter.

 

Have you any potential PPI claims?

 

It is worth remembering that Payplan do administer free DMPs however they are not a charity they are a profit making business.

 

Also there is no such thing as a free IVA with any company or provider best to get 2 or 3 opinions (if you feel this is the right solution) and compare preferably including one that has no financial interest in any solution they may offer.

 

As well as the two agencies you have mentioned there are others such as National Debtline & CAB (see below)

 

http://www.nationaldebtline.co.uk/

 

https://www.mymoneysteps.org/

 

http://www.citizensadvice.org.uk/

 

http://mymoney.nedcab.org.uk/moneyadvice/

 

Always best to get full advice on all your options based on your full circumstances, making sure you fully understand the pros, cons, fees & possible implications before making what could turn out to be big & important decisions for you

 

The above is just a guide based on the limited info you have supplied so far if you put up further info there may be people on here who can help & guide you further.

 

My view

 

Your choice at the end of the day

 

Best Wishes

[ha12006]

Hi, thanks for your reply. it was national debtline that gave the advise of DMP or IVA.

 

as for ppis, none of my loans and cc have ppi.

 

when i spoke to national debt line, i was panicking over the change and when i was asked the questions i felt as it was, 'on the spot questions' which i gave a general answer. i even included my partners wage , hense they feel DMP may be suitable, but i rather not include her wage because she has her debts she needs to pay but not struggling as me. hense i am looking to get advise elswhere if i speak to natoinal debt line, i will have a feeling that they think i am changing the story. hope this makes sense?

Edited July 19, 2013 by ha12006

[Wintry]

Hi, thanks for your reply. it was national debtline that gave the advise of DMP or IVA.

when i spoke to them, as it was 'on the spot questions' i included my partners wage in, hense they feel DMP may be suitable, but i rather not include her wage, hense i am looking to get advise elswhere.

 

Hi

 

Thanks

 

Fair share contributions for priority expenditure are usually expected with any debt solution and this would likely apply advice wise whoever you consult.

 

I presume it was National Debtline who pointed you towards the two agencies you have mentioned.

 

Going with a free DMP is a no brainer in my opinion if you eventually go down that route.

 

You could consider doing your own DMP if you decide on this as a solution however this method is not for all, might give you more flexibility & control however.

 

Like I say difficult to say much more without further info on your overall circumstances.

 

Got to be your choices at the end of the day

 

PS - I am off to get down for the night now anyway, its been a long hot day:)

 

Best Wishes and maybe catch you later

Edited July 19, 2013 by Wintry

[ha12006]

true say, many thanks for your help take care. goodnight

[Peterbard]

The key thing really we don't know is what your position will be after you leave home. You've said you won't be able to meet minimum payments, but if you had interest and charges frozen, roughly how long would it take you, from the disposable income you do have, to repay your total debt?

[ha12006]

at the moment, incoming is approx £1283 a month, total given to cc and loans is approx £565. and i have £484 to live on, which includes food, travel, clothes, internet, phone bill etc.

i actually get paid every 4 weeks which is approx 1184, and in one month i get paid twice. so just for easier calculations i use monthly wage which 1283.

if i move out then if i consider rent, utility bills, council tax, tv license, broadband, food, travel i have approx £326 to pay credits, regarding time scale, i am unsure.

Edited July 20, 2013 by ha12006

[Peterbard]

I think your calculations are wrong somewhere. At present you spend £565 on debts and have £464 to live on. That totals £1049 which leaves £234 unaccounted for.

 

I'd make sure you get your current calculations correct first, before trying to calculate what the situation will be when you move. Currently you are saying living expenses will be £957 pcm with £326 for debts. This sounds more accurate.

 

Assuming worst case scenario of debts of £20000 and £326 pcm to service them, it would take approximately 61 months (just over 5 years) to repay the debt if all freeze interest and charges. This is certainly realistic for a DMP, and personally I would be reluctant to be suggesting a formal insolvency route for you. An IVA lasts 60 months, and you'd have taken a formal insolvency route for the sake of 1 month. This doesn't make sense to me.

 

I hope that helps put it in context for you. Obviously I don't know which creditors you have, but I have not yet come across one who won't freeze interest and charges with a bit of persuasion. If you go with one of the big free organisations, you will have to negotiate the freezing of interest and charges. If you do a self managed DMP, you will have to; if you go for either NEDCAB or CashFlow you will have a sort of half way house where you manage it with support.

[savvysaver]

Hi, what came to my mind is if it is at all possible to stay with family longer, then it would make sense to. My son being in huge debt & in the forces was going to come out. This would have meant moving back home with no guaranteed income & being in debt pretty much forever. He is now staying in at least as long as it will take to clear his debts, and also to accumulate some savings. Surety of a home base with little or no outgoings bills wise would enable you to be in a happier financial place a lot faster. Not an option for everyone though. Good luck.

[Peterbard]

That would bring it down to 43 months to pay off the debt if it is possible to live with family for a further three and a half years. Either way, a DMP is perfectly do-able.

[savvysaver]

Whichever way works out best for you. Important though to get a free dmp as it's a rip off from the ones that charge. Worth perhaps contacting them all individually & seeing if any of them will take less in order to settle. If so, and the others are interest frozen, then save up enough to pay off any of them that will take less. Some of them may well do that as they are greedy and just want money upfront even if it's a lesser amount. Prioritise as M Lewis says & pay off higher interest ones first, while paying minimal off others. Do phone calls/ homework yourself as it'll be quicker & after a few phone calls & a lot of coffee you'll be in a better (more informed) place.

[Peterbard]

Do you mind my asking how you arrived at the figures above? Every DMP will start from the point of getting an accurate picture of your finances. It is of no benefit to you to portray anything other than the full picture if you are to get the best help. Equally, it is not for the DMP provider to judge, though they may give advice to try to help you if your expenditure exceeds certain amounts in particular areas. They will not ask for proof though for a normal DMP; once you start down formal insolvency routes, things are different.

 

The most important thing in any DMP, self managed, part managed, or fully managed is to do your very best to get all interest and charges frozen. Obviously this reduces the debt much faster as all payments go towards paying off the capital owed.

 

If you need help choosing what sort of DMP to choose, post up and one of us will post up the benefits and disadvantages of each type. It may even be on the site somewhere already, as I'm pretty new here.

[fletch70]

Just a quick thought, you say you get paid every 4 weeks but have worked outr your monthly outgoings and monthly income. The problem with that is unless you start on the month you get paid twice you will always be playing catch up. Why not do it all on your 4 weekly take home pay. Then when you get you extra payment you could possibly use that to do a F&F on one of your debts for less than you owe....

[Peterbard]

Just a quick thought, you say you get paid every 4 weeks but have worked outr your monthly outgoings and monthly income. The problem with that is unless you start on the month you get paid twice you will always be playing catch up. Why not do it all on your 4 weekly take home pay. Then when you get you extra payment you could possibly use that to do a F&F on one of your debts for less than you owe....

 

Or multiply by 13, then divide by 12 to get a monthly salary.

[fletch70]

Davy the only problem with that is that if your outgoings are say 1000 and your 4 weekly salary is 1200 but that equates to 1300 monthly. If you offer to pay 300 towards your debt, every month you will be 100 short until the month you get paid twice. I learnt the hard way when I was in a job that paid 4 weekly

[sequenci]

Davy the only problem with that is that if your outgoings are say 1000 and your 4 weekly salary is 1200 but that equates to 1300 monthly. If you offer to pay 300 towards your debt, every month you will be 100 short until the month you get paid twice. I learnt the hard way when I was in a job that paid 4 weekly

 

This is where an effective monthly budget should help. Paying paid 4 weekly is pretty unhelpful in this day in age - I'm really surprised so many firms still do it!

[fletch70]

Sequenci I agree. Now my father would have had no problem dealing with it, he had a spread sheet for everything including a 10% bugger it factor (for emergencies) . I am however a different person and tend to spend what I have..sorry it is just how it is. I would change if I could

[Peterbard]

 

You can, you just need teaching how by someone non-judgmental.

[fletch70]

Davy with all due respect I do not need teaching how to change as I know full well what I should do. I agree that with the right help I could overcome the challenges that cause me to overspend however there are more important challenges in my life at the moment.

[Peterbard]

If you know you could overcome the challenges, don't say you can't then! lol:razz: