Any advice on DMPs welcome

[fivesacrowd]

Dsis been having really tough time lately. We lost our dad suddenly, her dh lost his job & their dd is ill. She's in about £40k of debt and has been advised to contact step change & start a debt management plan. Her dh says he doesn't want anyone else dictating how they spend their money, but my understanding is that a set amount will be negotiated to pay off the debts and the rest will be theirs to spend. I know it will affect their credit rating, but I think it's probably already been affected as they've missed a couple if mortgage payments. Hoping someone on here will have some experience of living with a dmp, what's involved and how does a poor credit rating impact on daily finances.

There is a long running DMP support thread somewhere on Martin Lewis' forum. May be worth talking to the people on that.

Try Payplan (google for website) Free and very helpful.

I don't know hoe it would affect the credit rating of her husband but she could try entering into one herself especially is the debts are her own his shouldn't come into it. Worth asking with either the Step change or Payplan adviser (I believe they are the same kind of free DMP agencies.

I read somewhere that the Citizen's Advice Bureau can help with this. But don't join one of these plans which take a percentage for admin.

Yes Viv CAB are wonderful for this and totally independant. The last time I rang them was to ascertain that my dad could indeed ignore the wishes of my mother's Will with impugnity - they are not worth the paper they are written on apparently - but she was very sympathetic!

If your Dsis has missed mortgage payments, and the mortgage is in both names, then yes, her DH will have been affected and those missed payment will count against him too.

She will find it difficult, if not impossible, to get credit, not a bad thing necessarily. I think it takes five years for bad credit to be expunged BUT on the bright side, in a DMP it shows that you are doing something positive. Better to face these things head on.

The DMP companies can approach your creditors and they know the right things to say to get a repayment plan in place. The good thing is, they can often agree with the creditors to freeze the interest, so all that you are paying off is actually eating in to the debt.

She might need to change bank accounts and to close all dealings with those banks to whom she owes money/has debt.

It takes time for all the payments to be set up and agreed and there will be narky phonecalls and letters, although actually the people in the banks are normally nice, if a little persistent.

Don't know how else it affects credit rating as we haven't come up against this yet.