my partner and myself currently are in debt of about £16k, we are only 20 years old but stupidly took out a loan to furnish our house and several overdrafts and credit cards when we turned 18 (as people stupidly do)!! we are renting privataly at the moment and are not behind n any rent payment or utility bills but we are really struggling to meet minimum payments on everything, as our incomings are about 2k and our outgoings before any general living expense is only about 50 pounds under this!we do both work full time and have other commitments so another job is no option for either of us! It has got to the stage we really need help , but we can not get accepted and would probably not want to get into further debt by gettinga consolidation loan, we have about 6 creditors currently.. We are thinking that a DMP will be the best option but are not 100% sure, over an IVA , we are also hoping to get a mortgage when most of the debt is paid off but dont want to totally ruin our chances of this. We also move about quite alot with work so dont want whatever we choose to do affect our chances of renting or getting a job in another city! What would be best to do,as we cant carry on as we are ..

Thanks

I assume that you are in the UK - Which I am unsure of with your "other city" comment ?

If you are - then visit the Citizens Advice Bureau before you do anything - Which you should have done months ago - before you got yourselves into this mess

yes i am in the uk, I am well aware of what i " should " have done. I am not here for people to point out my mistakes as i am aware that I am in a mess that I shouldnt be, I am here to see how people that are/have been in the same situation have dealt/are dealing with it!!

Hi bubbs

I'm near enough in the same situation, me and my partner owe about 16k, I work full time and my partner works part time and have 2 children, we basically have more going out than coming in!!

We can just about sleep with all the worry! I contacted a debt management company(not too sure if I can list it?) and they asked a few questions, what was coming in, what is owed......etc..

As far as I can see, they get into contact with the creditors and arrange the repayments. I just got the paperwork this morning and there is a lot to go through.

hope this helps...

Hi Peapod,

A Debt Management Company would normally write to all your creditors after receiving creditor details and signed authorisation from you and request up to date balances.

They will then work out your income / expenditure and draft a Financial Statement / Offer and send it to all your creditors asking them to accept your reduced pro -rata or token offers. If your offers are accepted the Debt Management Company normally distribute your payments for you and usually charge a percentage of your monthly payments for their administration costs. Also some companies I have come across have been known to 'keep' your first three months payments for their 'administration' costs, this usually does not go down well with creditors for obvious reasons.

With a Debt Management Plan there is no guarantee that your creditors will freeze all interest and charges on your accounts whoever administers it, however with some loans the interest has been added at the start anyway and many creditors ask for reviews, say every 6 months or year.

If you can only offer token payments some Debt Management companies will send you a self help booklet / pack as it would not be 'financially worthwhile' for them to take on your case, also be careful with your priority debts / expenditure such as mortgage, rent, council tax, HP. etc as many DM Companies leave these negotiations to you, basically you must make sure these are addressed and paid before non-priority debts.

It would do you no harm to contact one of the free independent advice agencies such as CAB as they will advise you on all your options and implications and may be able to help you with a Debt Management Plan for free.

All the best.

Pincer

Hi bubbs,

Only just read your post, but as we are currently one year in to a DMP thought you might like to hear of some personal experience. Anyway after an initial call explaining the situation much as you have done in your post an appointment was set-up to talk to an adviser who went through all of our finances both incoming and outgoing and work out a way forward after explaining everything very throughly.I must say at this point the people on the phone were very nice and at no time were they condescending or judgmental just very understanding and helpful. After all you already feel bad enough thanks!!

So after the call they sent out the paperwork to get things under way, got in touch with the creditors who were quite ok with the arrangements mostly. One creditor did take us to court but the DMP people help us through that and the court decision was what was offered in the first place. I will say your budget is quite tight so no room for frivolities, but the peace of mind of not worrying how you're going to make the next payment is well worth it. What we have found is that we now think very carefully before parting with any money. Anyway we have about 3 years left to be COMPLETELY debt free and that is something to look forward to.

Finally the people we are with charge us nothing for the service which is the way it should be. Again as was previously said not sure if we can say names, but here goes PAYPLAN. Just google and you'll find their site.

There is help out there, just go for it you don't need to struggle on as we found out. Hope this helps and good luck.

Hello.

First of all my advise to you is not to panic. I have been in a similar situation to you, but i am single, and obviously only have a single salary. My friend used to be a high flyer in sales, but then fell pregnant, and was a single Mum to be, so she had to bite the bullet, get a council flat, and go down the IVA line of things. About 6 years down the line, she cant even get a bank account, yet alone a catalogue, and only had access to proper banking by having a joint account with her brother, which in all fairness she has sole use of, as her brother just helped out to provide his name to get her an account. My advise to you, dont get an IVA or a DMP, as it WILL screw you're credit rating up, regardless of what they say, and you can say good-bye to a mortgage,

From taking advise of my mates problems, and the fact i still had debts, and like yourselves wanted to get a mortgage, i thought long and hard about things. I kept on getting regular credit reports from Experian to make sure my account was up to date with no linked errors, (which happens SO much you wouldnt believe) and a true cedit report works wonders. Keep up to date with you're credit cards, loans etc..and stay within you're overdraft. Dont go over it, as you're bank has their own internal credit scoring,and that will go down hill rapidly - though it shouldnt affect you're external credit report. Due to my occupation, (police) i have links to 'credit unions'. They're great because they dont credit score you to get a loan, they provide low rates, high lending amounts for un-secured up to £25k and spread them over 7yrs. I did this option.

I did my consolidation loan for about a year to evidence on time payments, that i could control my debts and got a mortgage - a low one mind, and i havent looked back. My plan was to get a 2yr fixed rate, at the end, release the equity, which i have done, and i have paid off £10k from my debts. Not bad for 2yrs work!! Its not all paid off, but a large chunk is. As long as you're honest in you're applications, look to the future as there are no short term results in getting rid of debts, and stick to you're plan, you should be ok!

Also look at options of double checking that you're not due any tax rebates by calling you're local tax office, pausing payments on pensions, savings etc..to help increase you're income. Use public transport....its so much cheaper!! I hate it, but it saves me £200/mth!!

The main bit of advise is that there are no real answers to solutions, apart from grafting, saving as much as you can to help pay off more, and stick to you're long term master plan! Good luck.

thanks very much for all your replys (especially glitter girl) its nice to hear from someone who has been in our situation, .After alot of thinking we contacted a dmp company and have just recieved all the paperwork from Payplan (who as you said were non judgemental and very helpfull) . We are starting our dmp next month and should be debt free in just under 3 years !

Again thanks for your help, and like you we will think twice on every penny from now on!