Debt Management Plan......

[Beaniebeemer]

I need to explore getting help with mine and DP’s debts. We live like we are a married couple and we have two children and a mortgage.

I was out of work when COVID hit (I’ve worked constantly for 20 years but had a breakdown last year and have been unwell) but I managed to secure another job (supermarket work so low pay). Just as I secured this new job my DP lost his job of 8 years. He was the breadwinner. We are now living on my part time wage and UC. DP wants to go self employed and once things start improving he hopes to be able to pursue this. I doubt initially he will be able to earn enough to sustain things. I might be able to do a few more hours but someone needs to deal with the kids 6 and 8 around school (if they ever go back!)

Right now we have c. £25k of debt. We could keep up and pay everything ok before both of our employment situations took a turn for the worst. Never been in arrears. We are on COVID payment holidays at the moment so we have a bit of a breather but it costs about £650 a month to service the debt (the mortgage is only £500).

What I really need to know is will going through a DMP cause issues with the house. Would creditors try and come after the house (the debts are all unsecured). I know it would damage my credit rating. I would have to product transfer my mortgage in 18 months to stay away from SVR.

Just wondering if anyone can help me. It’s such a worry at the moment. How life can change

If you go down the DMP make sure you do it with one of the debt charities like Step change. The charity will go through your income and expenditure to work out how much you can pay to reduce your debt. The debt charity will liaise with your creditors and arrange payment, you pay the charity they in turn pay your creditors. Hopefully they'll be able to freeze your interest. Your creditors won't come after your house, they'll be happy they are getting paid. If you have an overdraft your bank might want to close your account to enter into the DMP. If you have decent credit just now opening a new account shouldn't be a problem, I'd do that first to get the best bank account you can.
Step change are amazing, very helpful, pragmatic and non judgemental.

Thank you. Yes my credit is fine at the moment. I’ve been told to use Step Change so I will have to contact them in the next week to get things moving.