Debt Management Plan

[Mammyloveswine]

Thinking of applying for a debt management plan. A combination of a surprise second child and subsequent maternity leave plus being part-time at work has meant that my debts are increasingly unmanageable.

We are left with little spare cash each month and end up putting something on the credit card. We are desperate to move but are unable to save anything at the minute.

Our budget could be tightened but realistically not enough to make a major difference.

But in 2 years i will be in a position to gi full time and promoted, adding almost a third to my salary and i will no longer need childcare. This is when we would like to move.

Do i try and suck it up until then? Im so stressed and anxious about money that its affecting my sleep.

Will a DMP affect our mortgate application? Even though it will be in 2 years?

My other option was to apply for a loan to consolidate all debt but i dont think this would save much, but at least i would only have one monthly payment. (As long as i cut up my cards)

Thank you.

Use StepChange, I'm on a DMP and yes it WILL & does affect a mortgage application ... there's so much info on the stepchange website and there's an online tool you can fill out to see wherr you're at and your options, it's completely confidential and you can discuss it with stepchange at the end. Best thing I ever did, I can now sleep at night.

Head over to the money saving expert forum and the debt free wannabe page. They’re really good at advising in these situations.

A consolidation loan is the last thing you need at the moment.

Go through all the relevant steps here.

Consolidation loan unlikely to help, especially as you don't seem to have a handle on your budget - if you're currently spending more than your income, how do you know if you can afford a loan?

Have you checked your benefit entitlement with extra DC and reduced income?

You say you don't think you have room in your budget to squeeze out extra disposable income, but it really depends on where you're starting from and if you haven't changed your utilities or cut down/negotiated with TV/broadband suppliers for a while, you could save here and all those odd bits saved add up and can start to make a real difference.

Also, if you currently still have a good credit record, can you transfer any credit card balances to a 0% card so the money you pay them goes on the balance, not interest.

Also seriously cut down on spending on things like Christmas - buy for your own DCs only and tell everyone else soon that you can't afford to exchange presents this year.