#DebtAdvice #FinancialFuture #MoneyManagement
Hey there!
It sounds like you’re navigating quite a financial journey, and I’m really glad to hear you’re starting to see a light at the end of the tunnel! Managing debt can be overwhelming, but it seems like you’re taking the right steps. With your current situation, you’ve got a lot to think about, especially regarding your remaining debt of approximately £16,500. 🏦
**Here are some thoughts on your situation:**
- **Debt Management Plan (DMP):** You’re already in a DMP with StepChange, which is great! This structured approach is effective in reducing debt over time. Since you’ve reduced your debt from £34,000 to £16,500, keep up the good work! ✨
- **Budgeting and Savings:** It’s awesome that you’ve managed to save £2,200 for emergencies. Setting aside funds for unexpected expenses really helps avoid new debts in the future. 💰
- **Addressing Missed Payments:** Regarding the missed payments on your loan, it could be wise to consider addressing the arrears. Clearing the backlog of £1,000 with your savings could stop the missed payment reports from affecting your credit score. This could possibly improve your overall financial health in the long run. 📈
**Possible Solution:**
To approach this, you might want to:
- **Clear the Arrears:** Use part of your emergency savings to pay off the £1,000 arrears, which will help you stay on track with your DMP. 🛠️
- **Negotiate with the Lender:** Reach out to your lender to explain your situation. Sometimes, they may offer a temporary reduction in payments while you’re on a DMP. 📞
- **Continue Saving:** Keep saving a portion of your monthly income for future goals, whether that’s for a home or other aspirations. 💼
**Looking Ahead:** Now that you’re thinking about a mortgage for the future, consider how to improve your credit score as you move forward. Once your debt is cleared, this will open up more opportunities for you! ✨
**What’s Your Next Step?** I’d love to hear from others who might have been in similar situations or have tips on budgeting and managing debt. How did you navigate the transition from debt management to planning for a brighter financial future? Let’s share experiences and support each other! 🤝
Thanks for sharing your story, and don’t hesitate to ask if you need more clarity or details!
> One of my debtors is a loan (£321) which
Pedantic: you’re the debtor, they’re your creditor.
I would speak to Stepchange about this, as I don’t think the creditor should be reporting these as missed payment. You’re on a DMP, so I’m pretty sure you have a legal right to make the payments as you are.
Probably you should make a formal written complaint to the creditor stating that these are being recorded incorrectly and should be removed from your credit records. And if they don’t address it to your satisfaction then you should escalate to the lender’s regulator.
I think normally the last black mark on your credit record should be the date when you enter the DMP.
You can get a mortgage from a specialist lender 4 years after your last black mark, and your record is completely clear after 6 years.
I’m confused. If that loan is only £321, why can’t you just pay that off in one go?
With your salary, and somehow having a free house (guessing military?), you could be debt free within a year.
As someone who has been In your position with a DMP I can tell you there’s nothing you can do regarding the credit file. Unlike with an IVA, a creditor is not required to mark your debt as Defaulted, they can have it as Missed Payments, but it usually has an additional note to say you are in a fixed payment plan.
If you settle it outside of the DMP it will be marked as Settled but those Missed Payments will remain.
On a positive note, things only stay on your credit file for 6 years. So when you reach the date your debts were defaulted + 6 years they will drop off your file and you will look more appealing to lenders.
On an extra positive note, if you find a good mortgage broker they will be able to get you a mortgage even though you’ve been on a DMP, and even if your debts are still on your file. But you are likely to be paying a higher interest rate because of it
Going off topic.
Wait!! Are you my neighbor!? Your typing is like him, your situation is like him!? I’m surprised!
Do you live in London?