I have setup this blog to hopefully record our progress through our Debt Management Plan (DMP) and our journey from debt to debt-free.

If you have any questions then please let me know however if they are financial questions then can I suggest you speak directly with a free debt management company.

I am recommending the Consumer Credit Counselling Service (CCCS) as I have found numerous forum posts and success stories from people who have been where we are - all the information I could find about the CCCS was excellent and they come highly recommended.

I shall be updating this blog regularly with any information/letters/phone calls I receive from both the CCCS and/or my creditors to hopefully give you some idea of the process involved in a DMP.

I hope this site proves helpful.

Wednesday, February 26, 2014

WOW - 4 Years Later!!!!

wow...it's been a while since I updated this...in fact, 4 years to the day tomorrow :)

So, what's happend over the last 4 years and how have things changed...

Well, to start with, unfortunately my wife and I separated a couple of years ago - numerous reasons but I've no doubt the added stresses of being in debt were a factor.  As a result of that, my wife and I have had to start separate DMP's (more on this shortly).

The CCCS have had a rename/rebranding - they are now called StepChange but their amazing service remains the same, in fact better.  They have made some great changes to their website and DMP portal now so that most things can be done online - even the DMP review process is done online now.

When I started this blog, my Wife and I had combined debts of £60K - well, I can only guesstimate my wifes now but I believe her debt is around the £6k mark, my debt is around £14k and we have joint debts totalling approx £24k - so in total, we're now sitting at the £44k mark - so in 4 years we have managed to pay off a quarter of our debt.

I said I'd talk some more about the split DMP's that my wife and I had to take out.  So basically, when you separate, StepChange don't allow you to have joint DMP...or maybe they did but we opted to have separate plans, tbh I can't recall 100% but I believe it StepChange that insisted on it.

Anyhow, the interesting thing about separate plans where you have joint debts is that both plans treat the balance of the joint debt as each participant being soley responsible - so in our case, the £24K of joint debt is assumed to only being contributed to 100% by me and ALSO 100% by my wife - this basically means that for each payment that I and my wife make to our respective plans, StepChange make 2 payments towards the joint debt.  Depending on how much of your debt is joint and to who that debt is owed this may work in your favour - for us it does as it means that we're paying off the largest creditor faster (NRAM).

The other important point to remember is that when StepChange calculate your debt-free date based on the amount you pay each month, they do NOT take into account any payments from other sources (such as my wife's DMP) - what does this mean?...simple - I know that my wifes DMP contributes approximately the same amount to our joint debt as my DMP but that because she has lower personal debts, her debt-free date is a few years less than mine - so all of her debt including the joint debt will be paid up before mine.  Now, if you're following this, you'll realise that if her debt-free date is sooner than mine then logically that means that the portion of my debt that includes the joint loan will also be paid up in that period of time - so when you are quote a debt-free date by StepChange don't immediately worry - My current debt-free date is around 18.5 years!...but, with the divorce settlement that I have agreed, this will reduce to around 10 years and my wifes will increase to around 10 years also.  Obviously, it will be less than that though as StepChange are not taking into account the overlap of payments.  I have guestimated it will more likely be around 7 years for each of us.

So, that's my first update in 4 years over - phew!