StepChange DMP - Multiple Debts

[LilMissM]

I have recently taken out a DMP which is due to start on 1st April.

Included in the DMP is my £750 overdraft with Santander, of which I had used just over £700).

The bank have now removed the overdraft option (which is fine) but is still showing as being overdrawn.

I have applied for another basic bank account with Co-op but was wondering if Santander will automatically take any money coming into the Santander account (like my wages etc) and just use that to pay off the overdraft?

Right at this moment I literally have no access to any money at all and I do not get paid until the 25th of this month.

I am panicking and very upset.

Upset that I have sadly found myself in a situation where I need a DMP (but trying to look on the bright side and see being debt free in a couple of years) and very worried and concerned that I have literally not a penny until I get paid and then worried if Santander will take it straight off me, even though they are included in my DMP.

I am going to ring Step Change who have arranged the DMP for me and get advice from them, but until I know whether I can get a new bank account for direct debits, wages etc, I don't know what to do.

Can anyone offer any advice because right now all I feel like doing it crying  

[lolerz]

Don't need to use StepChange. Bet they rushed you into their DMP without thinking.

What are the debts? Are they all defaulted and have any been sold on? If they're not defaulted simply stop paying for a few months, get them defaulted, and come back here to set up pro-rata payments etc.

You're correct to open a parachute account. Co-op is popular for high street banks but Starling is a good option as well if you've got access to a Smartphone. Get your wages paid into that ASAP. Starling shouldn't take more than a couple of hours to open.

Easy to self-manage a DMP. There are good letters in our Library to use as a base for setting it up yourself. Takes nothing more than a couple 2nd class stamps. The best part is that you are in control, no one else.

[LilMissM]

Thank you. 

None of the debts are at present overdue, no missed payments etc.

I looked at a DMP because I am just struggling to manage my money and am finding myself with little to no money left each month to live on, hence how I ended up in my overdraft again.

I owe in total around £14k, feel very stupid for getting myself into this mess  

How do I now go about getting the debts defaulted and do you think I should cancel the DMP?

StepChange did not rush me into anything to be fair, but I did ask them NOT to include Santander in the DMP because I have been with them for years and they have let me reduce my overdraft in the past each month.

They did not reply to my request, or to any other email I sent them actually.

But a DMP felt like the right thing to do because I am clearly terrible with money and don't know how to get myself out of this mess and straight again.

Honestly, I feel like I am suffocating at the moment

I will have a look at opening an account with Starling now, thank you  

[lolerz]

Cancel the DMP yes.

Getting them defaulted is simple, simply don't pay them for a few months. Cancel all DDs and Standing Orders. Let the deforestation come. It'll also help you build up a small emergency fund if you're smart by putting the money you're using on your debts into a savings pot (not related to a creditor!)

Can you list the debts as I asked, please? Who are the creditors and roughly how much etc?

If you don't trust yourself with the money you can open another current account, set up a standing order on or just after payday from your main account to that, and run your STANDING ORDERS (not Direct Debits!) from there. Starling also has savings pots that can lock this away for you and you can pay bills directly from these pots. If you haven't got any defaults etc registered already opening a current account should be nothing more than a triviality. 

Remember that 1 default is as bad as 50 so make sure to get them all defaulted. The quicker they're defaulted, the quicker the 6-year clock starts for a clean credit file. 

 

Any other questions come back here.

 

[LilMissM]

The debts are as follows:

ZOPA BANK LOANS - £6,319.54

MY COMMUNITY BANK - £6,149.12

CAPITAL ONE - £1,042.41

SANTANDER - £750.00

I shall cancel the DMP with StepChange now.

I have applied to Starling bank and it says average review time is 4 hours so fingers crossed.

I will take your advice because it sounds like very good advice.

Either way my credit score is going to be affected I might as well do it my way like you say. 

What will happen when I start missing payments and for how long should I miss those payments?

Will I get taken to court or bailiffs or debt collectors sent to my house?

That is one of my biggest stresses, anyone like that coming to my home  

[lolerz]

Topic title updated.
 

[LilMissM]

I don't even care how long it takes me to pay these debts off, so long as I can pay them off and still have enough money to live on and feed and look after my seven cats 

[lolerz]

Are all the debts unsecured etc?

[LilMissM]

Sorry for this thick response, but what does that mean? Unsecured?

Not tied to any assets.

Common secured loans would be car finance or a mortgage.

Oh in that case then yes, they are all unsecured. I don't have any assets.

[dx100uk]

hello @LilMissM welcome back again longtime.....

as said you dont need to use stepchange or anyone

it's easy to do one yourself with our help

for now get any income paid directly into your starling account and simply stop paying all of those debts you listed off.

ignore all the silly letters phone calls, texts emails etc etc, block them all.

once you get a default notice from each creditor, comeback here and we'll advise further.

dx again welcome back.

PS you should have come here first before thinking about stepchange.

 

 

[LilMissM]

dx100uk - that "PS" just make me tear up a little bit.

I feel even more stupid now because now I am here (again) I know this is where I should've come in the first place.

This is my safe place!

I just forget I have it until I'm in full blown panic mode.

Thank you for remembering me, you probably know  more about me than I do LOL

I will take the advice given by your good self (as always!) and @lolerz (thank you so much) and will undoubtedly have forgotten this whole conversation when the default letters start coming, so expect a panicky new thread when they do. Sorry, my brain doesn't work properly anymore

You are all wonderful people on here, I just wish I had the memory to remember that instead of waiting until my brain is rattling in my head x

Morning everyone, just a little update.

I now have a bank account with Starling bank and have started the switch and close old account option with them.

all my direct debits and standing orders will be automatically transferred across to my new bank and should all be done by 19th March.

Will change my bank details in work on Monday so there's plenty of time to amend my wages which are due on 25th.

One question though, my mum has a standing order to my Santander account (due on 11th each month).

She has cancelled the standing order but it said the payment for 11th March will still go ahead because its too short notice to cancel, but all future ones will be cancelled.

Will Santander take this money and use it off my overdraft or is there anyway I can get this sorted to pay into my new bank?

It's £300 which is a lot of money and money I desperately need right now.

[lolerz]

Personally, I'd cancel that switch as it'll move the OD as well.

Start fresh and get the OD terminated while it's still with Santander.

Spend an hour or so sending the emails to move the important DDs over (or do it online), it's also an excuse to have a bit of a financial clearout.

As for the standing order then yes Santander will use that to pay off the OD at first but you can contact them to release it back for essential living expenses iirc.

[LilMissM]

Have I made it all worse?

I have cancelled the switch option and my mum has phoned her bank and they said it has been cancelled and will be recalled on Monday.

I'm going to manually set up all my direct debits and standing orders in my new bank today and cancel them from Santander.

The switch option from Starling sounded good, they get it all transferred over and close your old account for you

I thought that was the best option.

Feel like a dumb ass

[dx100uk]

you dont need to re instate any DD's

let them fail, get each debt defaulted by a default notice.

obviously though, re instate DD's to your priority people...

like rent/mortgage/ctax/all utils etc etc but NOT the debts you listed.

bottom line is stop satans bank now getting any income.

[LilMissM]

I contacted Santander today and explained my situation.

The very nice lady said that they can release the money that has been paid in by my mum but that her bank (RBS) have to recall it.

Mum phoned her bank and they said it is highly unlikely that the money will be returned (even though they said the complete opposite the day before) and that even if they do a successful recall it can take up to 24 days!

Is this right?

I feel like Santander have been sound about it all but my Mums bank are being weird. We both told our respective banks the situation and that I need that money urgently.

I obviously can't wait 24 working days to get the money back, am going to phone Santander again tomorrow and see what they say.

Mum has to phone her bank at lunchtime if the money is not back in her account by then.

Any advice please lovely people? 

I finally got my Mum's money back from Santander.

I had to phone them again and explained my situation/predicament and what RBS told my Mum and they released the money so I could transfer it into my new Starling account. Breathed a sigh of relief for a moment.

The people I spoke to at Santander also recommended cancelling the Step Change DMP and either going with Pay Plan or try and manage a DMP myself. 

I have done a new budget planner and, no matter how I tweak it,  it seems I have more going out than I have coming in so my sigh of relief was rather short lived.

I genuinely do not see how I am going to get out of this mess I've gotten myself into  Seeing everything in a budget planner really puts in perspective just how much in trouble I am in. 

I will still do what you have advised in this thread, let the debts default for a couple of months(?) or more?

but I don't really see how I can

a) save a bit aside each month in an emergency fund (I have been living in my overdraft all this year) and

b) how I'm going to be able to pay these debts off altogether if my outgoings are more than my incoming.

The biggest chunk of my outgoings is my household bills, especially since my energy bills went up.

I dunno what to do  

[lolerz]

If you've got more going out than coming in you need to cut back on anything non-essential.

Expensive phone contracts, sky, bla bla bla.

 

simply make sure your rent/ctax/food/utilities are paid and cut everything else and see how much you're left with.

 

[dx100uk]

yep streaming/cable/satellite tv services like sky/virgin etc and mobile phones are the biggest gobbler of money .

cancel them all and go over to freeview via a tv aerial , you can get 90% of stuff via freeview now even stream movies for free.

use giffgaff for month by month mobile phone use even with data, you can do that for as little a £6pcm with them not +£40pcm via a contract. and keep the same numbers.

dont worry about the debts it will take months for them to default you but that doesnt mean you have to start paying anything.

we'll deal with that as it happens.

get this budget sorted.

 a guy near me last month with a wife and 3 kids from 1 to 17yrs who had defaulted on his mortgage to the tune if £4000 suddenly found out himself and his whole family were spending more on phones and tv services than their monthly mortgage payment and chose not to pay the mortgage...go figure...

went from +£400 a month down to <£50 for all the family.

dx

dx

[LilMissM]

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 0[b]

Monthly Income Details
Monthly income after tax................ 1658
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 350[b]
Total monthly income.................... 2008

Monthly Expense Details[/b]
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 577
Management charge (leasehold property).. 0
Council tax............................. 154
Electricity............................. 75
Gas..................................... 75
Oil..................................... 0
Water rates............................. 39
Telephone (land line)................... 0
Mobile phone............................ 23
TV Licence.............................. 13
Satellite/Cable TV...................... 66
Internet Services....................... 0
Groceries etc. ......................... 225
Clothing................................ 50
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 50
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 20
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1512
 

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card....................1042......261.......0
Loan...........................6149......274.......0
Loan...........................6319......0.........0
Family member..................4500......125.......0
Overdraft......................621.......0.........0
Total unsecured debts..........18631.....660.......-  

Monthly Budget Summary
Total monthly income.................... 2,008
Expenses (including HP & secured debts). 1,512
Available for debt repayments........... 496
Monthly UNsecured debt repayments....... 660
Amount short for making debt repayments. -164

Personal Balance Sheet Summary[
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -18,631
Net Assets.............................. -18,631

 

 

That's my budget to the best of my knowledge.

My head hurts a lot at the moment but I think I have put everything in there.

Just a thought, but given the terrible terrible mess I'm in, do you think I would be better getting like a DRO or something like that?

my credit score is going to be cr@p now anyway and to be honest after this experience, I don't think I ever want credit again. I feel horrible

Would something like a DRO be better for me.

I know I said previously that I don't care how long I'm paying the debts off for, but I don't want to be paying for the rest of my life and right now that's how it's looking to me.

Can't believe I'm actually asking this question. 

[lolerz]

You earn too much for a DRO.

Don't even worry about repayments for your debts for now. Get them all defaulted by not paying them. We'll deal with those once they're defaulted.

[LilMissM]

Also, the reason my new budget planner is different from the one I did with Step Change is because I didn't put in for things like vet bills, clothing, haircut etc. I just put the actual bills.

When I spoke to the chap at Santander yesterday he said to definitely include these sort of things because I don't want to be in such a dire situation that I can't even afford to buy myself a new pair of shoes.

I also have seven cats and for the most part they don't cost me a lot at the vets, but every now and then I do need money for vet bills and I should've included things like monthly flea treatment etc.

Looking back on it now it just wasn't a very accurate budget planner.

Santander sent me after I had spoken to him yesterday and I took his advice and filled it in more accurately and cried.

I have had a terrible start to the year financially already.

I started a new job in December, was ill with flu two weeks in so didn't get a full wage then. January the washing machine broke so I had to buy a new one.

I also had a horrendous migraine (I am diagnosed with chronic migraine and have three monthly treatment at the Walton Centre) so was off work with that and again, didn't get a full wage

 I discovered last month that the tax office had changed my tax code in January to the emergency tax code for some reason, even though it was correct in December,  I was over £400 short in my wages for February.

Hence me using my overdraft and finding myself in this now seemingly unfixable situation.

This whole situation is making me feel very depressed and helpless.

[dx100uk]

so you should get that tax back too.

dx 

[LilMissM]

Yeah I'm hoping I get that back this month.

I just don't see a way out of this situation though  

[LilMissM]

.

 

santander.pdf

[lolerz]

.docx converted to PDF and redacted.

Don't use .docx here as it includes personal details.

Ignore satans bank totally.

 

[LilMissM]

Doh, sorry  And thank you