Your views and questions.

Moderators: TalbotWoods, JaneClack

By spaniel
#249303 Hi. last weekend I finally decided to face my debts and have been in contact with National Debtline re debt management plan. I have now received the forms to complete and am absolutely petrified. Got a lot of debts (still too embarrassed to say exactly how much) - just worried that my creditors won't accept the small amount I have to offer. The guy at National Debtline said I was worrying too much but this is all new to me. Maybe in a couple of months time I will have calmed down. Dreading the letters from creditors. I have been reading members' messages - there is obviously life after debt. Anyway will keep you posted.
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By DuffNCustard
#249305 I'd recommend you give either Payplan or the CCCS a call. Both are debt charities and both will run DMPS free of charge - they handle your creditors for you - blummin marvellous!

All your creditors will know about them too.

They support you throughout the plan - really good advice and 'good people'
By sillytel
#249313 Yep,i would fully endorse what Duff says.I have been with CCCS for 3+ years and they have been brilliant.I dont hear from my creditors very often so when things settle down and you are 6 months or so into a DMP life will get a lot easier.
Chin up and good luck whoever you decide to go with.
By nigpet
#249315 You have as much to offer in payment as what's there - they can't get blood out of a stone, & a valid income / expenditure plan from one of the organisations mentioned is your biggest defence.
By spaniel
#249375 Thanks so much for your replies. National Debtline sent me the form to complete and return . They will then assess our situation and then refer our details to a DMP provider. Could be one of the two you have mentioned. I have already gone through our income and priority payments with them so I will be absolutely gutted if they say we aren't suitable for a DMP. The only option left then would be bankruptcy.
Sillytel - you say it gets easier after 6 months. Should I expect the next six months to be awful - can you give me an idea what to expect please? I would like to be prepared. Thanks again.
User avatar
By TalbotWoods
#249385 Hi Spaniel

Could you give us a little more detail so that we can advise a little better. In particular:

Roughly how much is your debt?

:?: Do you have any assets to protect (i.e. do you own your own home)

:?: Whose names are the debts in (this can actually help as it is possible that one solution would work for one person, whilst the other partner goes a different route)

:?: What is the spilt between secured and unsecured debts?

:?: Are any of the debt joint debts (this has a big bearing)

:?: Roughly what is your overall income

:?: Roughly (without debt repayments) what would be your expenditure

The reason we need an idea of these is that though a DMP is not possible for you, there are other options other than bankruptcy, which need to be looked at first.

If bankruptcy is the only option, please dont be afraid of it, there are many many people out there (including a LOT of members here) who we have helped through bankruptcy, and they do not regret it one little bit. For many it gives them their lives back, something that some other debt reduction methods would not have done for many many years!

By spaniel
#249405 Hi Tim

Here goes.

1. Debts approx £115,000.
2. We have our own home but no equity - probably go into negative equity if we sold it. We have a car worth maximum £5k but without it we couldn't go to work (live 40 miles from work). Husband was made redundant last year. Has found another job but pays half what he was earning.
3. My partner and I owe an equal amount of the above amount.
4. No secured debts. Owe to 9 credit card companies (approx £70k) and 2 unsecured Lloyds Bank loans (approx £45k)
5. Have a joint credit card with Halifax - owe £6k
6. Overall income is £3331
7. Outgoings (including large mortgage) £3080 (this is taking into account money for food, all bills etc)

Any help would be really appreciated.

User avatar
By TalbotWoods
#249413 OK Despite your first thoughts this is far from the worst debt we have seen, and certainly a lot less complicated than most. So though it sounds odd, well done on not moving debts to secured debts, that helps you hugely.

However, with this level of debt, once the creditors realise you are having problems they are likely to move to 'secure' the debts via Charging Orders. Which turns an unsecured debt into a secured debt, and these seem to be the flavour of the month with County Court Judges at present

OK so the various options:

DMP - with about £300 spare per month and preying that the creditors don't add charges or interest (which they mostly will) it would take a minimum of 32 years to clear, So for the next 32 years your life will be driven by debt repayments, CCJs, Charging Orders, Creditors and DCAs chasing, etc.

IVA - an IVA with £300 per month would only yield a return of about 5% to the creditors, and that they would almost defiantly reject. I've sen them accept 8% once and that was with HIGHLY exceptional circumstances

DRO - Debts to high

Admin Order - Debts far to high!

So unfortunately (as you see it at present) bankruptcy appears to be the only option.

Now before you go NOOOOOOOOOOOOO!


:arrow: Currently all your debts are unsecured (except mortgage) so all will be included, leaving you debt free.

:arrow: Your credit file will be back to normal in 6 years.

:arrow: Creditors can do nown't about it and it is final

Possible problems

:? Your car, the Insolvency Service (IS) normally only allows you a car to the value of about £2000, but if yours is worth more, and you need the car, then they will allow you to replace your car up to £2K

:? Your House - if it is in negative equity and will be in 2 1/4 years time then the OR will give it back to you. If in that time it has accrued equity, then they will allow you to buy that back (providing the equity is more than £1K, if its less than £1K they give it you back!)

:? You said you have a high mortgage, if it is too high the IS may grumph about it, but that is where some negotiating skill come into play

:? Excess moneys, with a surplus of £300 the IS will expect you to pay an Income Payment Agreement for the next three years, but that is it once the 3 years is up that's it, no more repayments. (In an IVA you would need to pay for between 5 and 7 years - In your DMP you would be paying for 32 years!)


Hmmm, there isn't any.

:mrgreen: It don't get reported in the local papers any-more

:mrgreen: No one tells your boss (unless you are in a reserve trade, which 99.9% of us aint!)

:mrgreen: You can have a bank account with either Co-op or Barclay's (They don't mind if you have had debt with them!)

Now what you have to decide is how strong you are, if you are VERY strong then a 32 year DMP may work, but expect CCJS and Charging Orders

If you want the quick mostly painless way out then in this case I would suggest that you look at bankruptcy as the best case.

We can help you with all the paperwork, and support you through the whole process.

And as other on here will attest, though bankruptcy dented their prise at the time, they certainly do not regret it - I know I didn't!

By sillytel
#249423 Hi Spaniel,
In answer to your earlier question, the next 6 months if u go for a Debt Management plan won't be easy as a lot of your creditors will chase you( via letter and phone calls) to try and get bigger payments than anyone else in the queue.
However,after a while most creditors,as soon as they see that you mean business and you can show them that you want to pay off your debts and that you don't have any more to offer, will back off and accept your payments.
However, looking at the latest data and the time it will take you to pay off the debts i think you need to VERY SERIOUSLY consider the Bankruptcy option that Tim highlighted.
If you are unable to pay at least 1% of each debt monthly i don't think your creditors will wait 9 years before they come looking for CCJ'S and Charging Orders.
Just for you to be aware, i am on a debt Management Plan via CCCS,i owed £204K(yes that's correct)when i started my DMP in May,2007 and now i owe £105K.However ,i am paying £2,200 per month so hope to be debt free in 4 years time.
Its a long haul and i have had a number of problems stopping interest being applied by some of my creditors,only recently have i managed to get all my creditors(22 of them) to stop interest and charges.
I have one CCJ and a charging order and own my home outright.
Tim and Sarah are the experts on this site and will give you sound and sensible,well thought out advice.
Listen to them.
Take care and good luck whichever way you decide.
By spaniel
#249483 Hi

Thanks for your emails. You have both given me quite a bit to think about. My partner and I are in near mid 50s so are not too bothered about needing credit ever again - cash from now on! We will probably be dead before the DMP is paid off. We pay £2150 per month for our mortgage and it has another 12 years to run which is when we retire. We don't have any intention selling the house ever (unless forced by court to do so). If charging orders were put on the house (which looks likely if we go with a DMP) can we be made to sell it when there is enough equity? I am usually a pretty strong person but the thought of receiving menacing phone calls from my creditors freaks me out. Why do they still pester you once the DMP is in place - its not that I can magic extra money for them.
If we go down the bankruptcy route then I think we will just give up the house and move away and start fresh.The problem is who will rent to us? I suppose I could start with a DMP and if it becomes too much then we could file for bankruptcy.

Oh, and another question. I have managed (this morning) to get a 3 month payment holiday from the mortgage company and, if we want, a 9 month interest only period. Obviously I can offer this to my creditors but I want to keep a bit back for emergencies. Do I mention this to the DMP company or should I just accumulate the extra money and offer it to the DMP company at the end of the year to share between creditors?

Thanks for all your help. I feel a little less sick today.

Have a good weekend.

By chandjay
#249555 Do NOT offer your creditors any of the money that you may save from your payment holiday.
Whatever you offered your creditors would NEVER, NEVER be enough, so it's pointless.
You're better off saving it for a rainy day. It's much better off in your pocket than swallowed up by your creditors(probably by the interest in the early days).
By spaniel
#249575 Hi Chandjay

Good advice, thanks. I will now find a secure hiding place. Day by day I am starting to feel less guilty especially when I add up the interest I have already paid over the years. Monthly interest on one of my cards is £363. I accept responsibility for being so irresponsible with credit cards but why did this credit company give someone on £20k per annum a £17k credit limit? I have now completed my DMP forms and will post them to National Debtline tomorrow. Let the fun begin!

By nigpet
#249593 If you ever start to feel guilty again, google "bank bail out", read it for 10 minutes or so & than go away & lie down until the guilty feelings subside. You know it makes sense.
By chandjay
#249603 Hi Spaniel,
Don't get me started on "interest and charges".
I could have managed my debt and not been in the mess that I'm in now, if it hadn't been for "interest".
At the height of my debt, I was paying over £600 a month in interest alone. This went on for years while I struggled with my illness(prostate cancer)and all the while I was robbing Peter to pay Paul just to pay my creditors oodles of money in interest.
When I finally came to my senses(and found this site), my debt had increased by at least £30,000, while for all those years I had been paying over £1k a month to my 26 creditors.

DON'T FEEL GUILTY. I know who the bad guys are.
If I think about it too deeply, then I could scream at all the wasted years that I was being charged excessive interest, whilst paying a grand a month back to my creditors, and for what ? ...... just to be paying the interest back for years and years and years.

Just be thankful that you decided to face your debts and that you have now found this site, and you can start to re-build your life.
It's the best thing that I ever did, and now - four years down the line - I have a reasonable lifestyle. Just 10 weeks to go to my fortnight in Spain - Wahay !!!
By spaniel
#249685 Hi

I don't think I would have managed to get through this weekend without this site - thank you very much for your support. As you know I am going through National Debtline who will then forward it to a Debt Management Company. I was told by them that it could take a couple of weeks before I am contacted . Should I contact CCCS direct. The National Debtline staff have been really helpful but are they just acting as the middle man?

Re Co-op Bank account. I telephoned the Co-op Bank and asked to open a basic account (visa debit card only). I explained my circumstances to the member of staff who said that I would probably qualify for the account one up from the basic one. I said if a credit check was required then there is no way I would be successful. She said to give it a try and I did and guess what - I was refused.

I suppose the only reason I will miss a credit card is for car hire overseas (when I can eventually afford another holiday). Chandjay - you have got me thinking of a holiday - certainly need one! I know you can use a visa debit card to rent a car in the UK but not abroad. Anyway, I just want peace of mind from now on. I am fed up feeling sick all the time.

Is it worth me changing my landline number? We are ex-directory but all our creditors have the number. The problem then is that they will start pestering me at work which would be awful.

Anyway, tomorrow is a new start. If anyone can get back to me before tomorrow regarding "Should I contact CCCS direct. The National Debtline staff have been really helpful but are they just acting as the middle man" it would be really appreciated. I just want to get things moving.

Thanks again.