Panicking about upcoming DMP

jenpenny

Hi.
My DH and I are in the process of a DMP/DAS and I just wanted to ask a couple of things. I am so stressed just now! Basically, CAB have firstly told us the initial process is they write to out creditors and bank(large overdraft) asking for our outstanding balances. This takes 28 days. In the meantime we have cancelled our direct debits as advised. We previously amazingly have never missed a payment on the £1000 plus we pay out each month to credit cards. So obviously a few letters and phonecalls have began. I wanted to ask how many payments missed would it usually take before the credit card company sell the debt to another company? I didn't want that happening as I wasn't then sure if that wrecked our credit rating even more, or caused difficulties for our DAS(would it?). And how long before things get really bad and people start knocking on the door? Just CAB have been great, but it seems a really slow slow process and they still haven't send letters out asking for agreements with an amount to enter a DAS.

Any advice gratefully recieved!

Jinx

jenpenny wrote: »

Hi.
My DH and I are in the process of a DMP/DAS and I just wanted to ask a couple of things. I am so stressed just now! Basically, CAB have firstly told us the initial process is they write to out creditors and bank(large overdraft) asking for our outstanding balances. This takes 28 days. In the meantime we have cancelled our direct debits as advised. We previously amazingly have never missed a payment on the £1000 plus we pay out each month to credit cards. So obviously a few letters and phonecalls have began. I wanted to ask how many payments missed would it usually take before the credit card company sell the debt to another company? I didn't want that happening as I wasn't then sure if that wrecked our credit rating even more, or caused difficulties for our DAS(would it?). And how long before things get really bad and people start knocking on the door? Just CAB have been great, but it seems a really slow slow process and they still haven't send letters out asking for agreements with an amount to enter a DAS.

Any advice gratefully recieved!

1. It is relatively simple. You cant make the required payments so you enter a DMP.
2. The DMP means reduced payments so it breaks your contract with your creditor.
3. This leads to a default on the account which is the bit that trashes your credit rating.
4. And because the original creditor gets bored/fed-up/cant be bothered dealing with it sells your debt to a debt collection agency. They then receive your reduced payment via your DMP company. As you have a default it doesnt do further damage to your credit rating.

Throughout the whole process you can get phone calls and letters. Your DMP company will deal with them and you can insist on only communicating by letter. Once its all up and running you will find it a lot less stressful. Well done for starting

jenpenny

Thanks Jinx

But how long before the credit card companies sell the debt on? Like 1 month, 2 months or much longer? CAB have told us things should hopefully be in place in 6 to 8 weeks. Wehave just this month now started our 1st ever month of missing payments - does that mean likely that the debt won't get sold on.
Thanks!

VanillaDelia

It is usually 3 months worth of missed payments before being sold on to a DCA. To be honest, as much as these people can be bullies, they are more likely to accept offers of your DMP, than the creditors themselves (In my experience anyway).

Jinx

Its a difficult one to answer - some of them default you quite quickly and move on to debt collection agencies asap. Others let you arrange to pay for a while then sell the debt on. Some actually have in-house solicitors so it looks like the debt has moved on when actually it hasnt! (When a debt is sold you should get a letter from the current creditor saying theyve sold then an intro letter from the debt collection agency) In my opinion a quick default from them all is better as the sooner its there the quicker it will drop off! I think there is guideline of something like 3 months from breaking the credit agreement to default - maybe a wee search on the forum would enlighten?

I dont think your debts will get sold on this month but it doesnt matter really, you've started your DMP and once its running, its just a case of changing who receives your payments....The original creditors will get the payments this month.

In my 6 years of doing my own DMP only one has not passed on my debt at all and thats Tesco Visa. Its actually them I owe the last of the cash too so dont see them selling it now...

eyeopener2

jenpenny wrote: »

Thanks Jinx

But how long before the credit card companies sell the debt on? Like 1 month, 2 months or much longer? CAB have told us things should hopefully be in place in 6 to 8 weeks. Wehave just this month now started our 1st ever month of missing payments - does that mean likely that the debt won't get sold on.
Thanks!

hiya

I know it's all very worrying but please just let things take there course.

my situation, which can be seen in my sig, is that all my creditors have defaulted me but only one has sent me to a DCA.

You will find creditors treat all debtors differently (sometimes even husnadd and wife if they have debts with the same company) so it is very difficult to give you any hard and fast advice on this.

What I would say to you is accept that you will get a mountain of mail, many, many phonecalls and some stress. However this will suddenly stop and you will think the postman has forgotten youand your phones been cut off!

Try not to worry, which I know is easy to say,but you can think the sky is going to fall in (which is won't) and your life is ruined (it isn't its just different) but until something actually happens or you have a threat to deal with its pointless and will make you ill.

Get your DMP up and running, start repaying your debts and live within your budget. That is more than enough to be sorting out than what some DCA might or might not do.

E2

lcbjcomc

In my experience it is better that they are sold off to DCAs as this is one of the only ways to guarantee no further interest or charges being applied. It took my biggest debts with Lloyds TSB 2.5 years to finally be sold.

jenpenny

Thanks everyone for lots of useful advice. We are hoping to be up and running with the DMP(will actually be a DAS as in scotland) as soon as the CAB get us there. I so far this month have had marbles on the phone who were actually fine. Egg phoned me almost 15 times in one day to ask why I had cancelled my DD. When I finally decided to speak to them(and said I had financial difficulties this month as had lost an overdraft facility)they were actually ok and the phonecalls have stopped(for now).

lifewaiting

Hi
My DAS took almost 4 months to set-up from first contacting the CAB to making the first payment. I waited about 2 weeks for an appointment with CAB and they referred me to the specialist DAS advisor which took another 2 weeks. She then wrote to my creditors requesting current balances which took a while as some companies did not respond. After about 8 weeks I was at the stage where the proposal was put to my creditors who have 21 days to respond. My DAS advisor then had a couple of weeks holiday which delayed things a little bit more. I was then contacted by the collection agent who agreed a date for my first payment which was about 3 weeks in advance. I am sure it can be done more quickly (my DAS advisor is only part-time and has no cover when she isn't there).
The phone calls start pretty quickly after you miss a payment as I am sure you know by now and in my case, carried on for a few weeks despite repeatedly explaining I was entering into a DAS. Part of the problem was that the majority of my creditors had never heard of DAS or understood how it worked.
I am now a few months down the line and all is well. I make my payments every month and hear nothing from my creditors apart from the occasional monthly statement.
Stick with it - it's worth it !