DIY DMP - Stick or Twist

[Kiko]

Hi Folks,

Bit of background on my situation.

I am a gambling addict (although haven't gambled since the end of May) and have racked up debts circa £30k (listed below). Originally I contacted a DMP Service that you paid for. I had arranged them to come to my house for a meeting, but after lots of reading seen I could get a DMP done via a charity for free, so I pursued that. Now after a solid month of reading, I have been going down the road of a DIY DMP, as I feel really educated on the whole idea, and feel it could work for me.

After reading various threads here, it seems this forum sees DMP's much more negatively as the previous one I was on, and would like some thoughts on my situation.

My debts stands as follows:-

Debts	Total
Hitachi	£10,443.45
Barclaycard	£ 5,600.00
Natwest	£ 3,220.00
RBS CC	£ 1,800.00
RBS OD	£ 4,500.00
Onstride	£ 1,000.00
188 188	£ 1,100.00
Mr Lender	£ 400.00
Lending Stream	£ 300.00
Friends	£ 2,400.00
Argos	£80
Sunny	£250
Wonga	£ 300.00
Quick Quid	£ 400.00
Total	£31,793.45

My expenditure as follows:

Expenditure	Cost
Rent	£400.00
Transport	£125.00
Food / Toiletries	£195.00
Telephone / Internet	£15.00
Satelite	£20.00
Medical	£25.00
Work Meals	£30.00
Pets	£30.00
Tobacco	£20.00
Medicine	£10.00
Hairdressing	£12.00
Clothing	£30.00
Sports / Hobbies	£15.00
Total	£927.00
Income	£1,780.00
Surplus	£853.00

So I have £853.00 to pay off my unsecured debts. I have no assets, no dependencies.

I was planning sending off the first letters to creditors this week, meaning I would have a full pay packet in my pocket this month, from which I was going to pay off the Sunny, Wonga & Quick Quid Pay Day Loans.

Would a DMP be best suited to my situation? Would I be eligible for a Trust Deed (I am in Scotland) ?

On the other forum a couple of well respected guys have mentioned the dangers of a DMP because of the AP (Arrangement to Pay), where this could be an ADDITIONAL 6 years added to my credit file after the DMP is complete, and this isn't something I want.

They suggested making no payment until I received default notices from my creditors, as at least that way I have a fixed date for this ending fully.

I also want to exagerate my outgoings too, possibly saying my rent is £200 more, as I thought I could use this money per month added to a pot to offer final settlements a year or so down the line.

If anyone can offer any advice it would be appreciated. Continuing as I am making minimum payments and not having any life is soul destroying.

- - - Updated - - -

I also want to say I understand the committment required for doing your own DMP to begin with dealing with all the creditors, but this isn't a problem for me.

[MrsD]

Re: DIY DMP - Stick or Twist

welcome to AAD

Personally I think DMPs (and Trust Deeds) are the work of the devil,and would run a mile before I entered into one.

If you were to run your own, you would have to have huge discipline and it won't guarantee that you stay out of court.

When did the debts accrue, are any of them taken out before 2007?

[Kiko]

Re: DIY DMP - Stick or Twist

welcome to AAD

Personally I think DMPs (and Trust Deeds) are the work of the devil,and would run a mile before I entered into one.

If you were to run your own, you would have to have huge discipline and it won't guarantee that you stay out of court.

When did the debts accrue, are any of them taken out before 2007?

Yeah I get that impression from many on here.

I have huge confidence in my discipline running it on my own. I think doing it on my own would lead me trying to clear my debts even quicker.

Unfortunately none of my debts were taken out before 2007, so I can't go down the route of unenforcement? (I forget the word, but I have seen it mentioned many a time on here).

Would you have any suggestions on how to best tackle these debts?

My thinking with the DMP was that I would hope all my creditors would freeze the interest, as with no assets I have nothing to lose going down a bankruptcy route for example.

[Undercover Elsa]

Re: DIY DMP - Stick or Twist

Hi Kiko and welcome to AAD!

I concur about the default issue, in my view it's better to default so that it drops off your file in six years than have the AP markers round your neck for six years after you finish paying.

It's not a good idea to falsely increase your rent payment on an I&E. That and all your other regular priority payments - council tax, utilities, insurance etc are fixed sums so could land you in trouble should you ever have to prove your I&E.
Other items such as housekeeping and travel costs are fluid and therefore you would be better making sure you're claiming all you are allowed to under the national trigger figures, which may legally increase your outgoings. You shouldn't leave yourself short.
Have a play with the Nedcab I&E calculator. It flags up a warning if you overstate on housekeeping etc, taking your family circumstances into account.
https://nedcab.cabmoney.org.uk/quickfs.asp

Elsa x

Edit just seen your above post. If you wait till the accounts are defaulted/terminated the interest will cease in virtually all cases.

[Kiko]

Re: DIY DMP - Stick or Twist

Hi Kiko and welcome to AAD!

I concur about the default issue, in my view it's better to default so that it drops off your file in six years than have the AP markers round your neck for six years after you finish paying.

It's not a good idea to falsely increase your rent payment on an I&E. That and all your other regular priority payments - council tax, utilities, insurance etc are fixed sums so could land you in trouble should you ever have to prove your I&E.
Other items such as housekeeping and travel costs are fluid and therefore you would be better making sure you're claiming all you are allowed to under the national trigger figures, which may legally increase your outgoings. You shouldn't leave yourself short.
Have a play with the Nedcab I&E calculator. It flags up a warning if you overstate on housekeeping etc, taking your family circumstances into account.
https://nedcab.cabmoney.org.uk/quickfs.asp

Elsa x

Edit just seen your above post. If you wait till the accounts are defaulted/terminated the interest will cease in virtually all cases.

Thanks for the welcome! (And to MrsD also).

Yeah the defaults make a lot of sense, and I think this would be the route I would go down before starting the DMP.

If I could default, and just pay a £1 token payment for the next couple of months, I reckon I could easily clear 8 of those debts (the lowest ones)

Duly noted on the rent! My only concern there is that my rent is relatively cheap to where I live, and should I have to move then there could be an increase by a couple of hundred.

[Undercover Elsa]

Re: DIY DMP - Stick or Twist

If your intention is to allow them to default asap then it would be a simple case of not paying anything until they do so. It could take up to three months or longer for them to actually default and terminate the accounts, during which time you may accrue enough to pay off the higher interest debts.
You wouldn't need to think about token payments until after termination so an I&E wouldn't be required until then.

[Kiko]

Re: DIY DMP - Stick or Twist

If your intention is to allow them to default asap then it would be a simple case of not paying anything until they do so. It could take up to three months or longer for them to actually default and terminate the accounts, during which time you may accrue enough to pay off the higher interest debts.
You wouldn't need to think about token payments until after termination so an I&E wouldn't be required until then.

Should I still go with sending a letter to my creditors confirming I am speaking with a debt charity regarding my financial situation?

[Undercover Elsa]

Re: DIY DMP - Stick or Twist

If you do that they are obliged to put a 30 day hold on your account to allow you time to get help.

[Kiko]

Re: DIY DMP - Stick or Twist

Also, when the creditors start calling me once they are receiving no payments how am I best to answer the calls? Should I encourage them to default me ASAP, as that is my intention. Or...?

[MrsD]

Re: DIY DMP - Stick or Twist

Where did you get the letter and what does it say?

The minute your creditors understand that you have money troubles, they will bombard you with calls and letters.

Do you have DDs coming out of your bank account for any of these payments? what about continuous payment plans? it may be sensible to change your main bank account to keep what money you have coming in. I would be cancelling them if you intend to try to have the debts defaulted. As Elsa says better to pay nothing at all until default and save the money that would have gone on payments, then when the debts are defaulted, I would look at way to get rid, it may be that you can negotiate full and final (and reduced) balances once they are defaulted. But you must be prepared for the shitstorm that will come your way as soon as they get your situation.

I would research everything, including sequestration (bankruptcy) as it will also stay on your record for 6 years in Scotland.

[Kiko]

Re: DIY DMP - Stick or Twist

Where did you get the letter and what does it say?

The minute your creditors understand that you have money troubles, they will bombard you with calls and letters.

Do you have DDs coming out of your bank account for any of these payments? what about continuous payment plans? it may be sensible to change your main bank account to keep what money you have coming in. I would be cancelling them if you intend to try to have the debts defaulted. As Elsa says better to pay nothing at all until default and save the money that would have gone on payments, then when the debts are defaulted, I would look at way to get rid, it may be that you can negotiate full and final (and reduced) balances once they are defaulted. But you must be prepared for the shitstorm that will come your way as soon as they get your situation.

I would research everything, including sequestration (bankruptcy) as it will also stay on your record for 6 years in Scotland.

I have a couple of options of letters at the minute from CAD, National Debt Helpline. These are just your basic stating that I am having financial difficulties, I am seeking advice, and would like to have each creditor send me the current balances etc.

My new bank account is now active, and my work have been advised of my change of bank details so I have all that ready. DD's are still to be cancelled. I only got my bank card yesterday so was waiting on this before I went forth with cancelling them.

I have tried to do as much research as I can, and believe I have a lot of understanding, bar a few questions which I will be asking.

I just came here as the other forum were really advocating DMP's, then I came here and it was a different view point (which is good).

[MrsD]

Re: DIY DMP - Stick or Twist

Also, when the creditors start calling me once they are receiving no payments how am I best to answer the calls? Should I encourage them to default me ASAP, as that is my intention. Or...?

I wouldn't ever speak to them on the phone, everything in writing only. We changed out phone number at the beginning of our situation, was a Godsend.

[Undercover Elsa]

Re: DIY DMP - Stick or Twist

Also, when the creditors start calling me once they are receiving no payments how am I best to answer the calls? Should I encourage them to default me ASAP, as that is my intention. Or...?

You can't 'encourage' them to default you. Simply doing nothing will have that effect. Not paying, not answering the phone and not answering the inevitable barrage of letters you would get.
Save the letter re seeking advice from a debt charity until after termination, which will then give you 30 days grace to sort yourself out and decide what to do.

[PlanB]

Re: DIY DMP - Stick or Twist

I am a gambling addict (although haven't gambled since the end of May) and have racked up debts circa £30k (listed below).

Hello Kiko and to AAD.

First of all I want to say well done you for getting on top of your gambling addiction

There are industry guidelines on lending and/or providing credit to gamblers which we can help you to explore.

I'm not suggesting that this is a way of fending off debts but I do think it's something that should be looked at if any of these debts were related to your previous gambling habit.

I see some are pay day loans and we have a PDL expert on the forum so I'll flag this up for their attention.

Stay positive

Plan B x

[CleverClogs (RIP)]

Re: DIY DMP - Stick or Twist

I am a gambling addict (although haven't gambled since the end of May) ... and would like some thoughts on my situation.

Had you considered playing the National Lottery?

The stake isn't much and it might help overcome your addiction whilst, if you win, not only could you pay off your creditors, you could buy Noddy a pint.