DMP questions - can anyone advise please?

iwilldoitthistime

Hi there

Ive finally got to the point of no return and filled in my debt details on the CCCS website and it tells me I should do a DMP which will take me just over 6 years to clear.

I just have a few questions before I start this final stage towards debt free heaven...

1. Will my credit score be trashed for ever?
2. What happens if something goes wrong - for example my car dies (I pray not, but you never know) and I dont have enough for a 'new' one? Will I be able to get any type of credit (obviously dependant on whether I could afford to pay it) either for a new car, or repairs??
3. How long does all this take to set up? Its past the half way point in the month for my pay, so I cant change anything as regards new bank details before pay day. Am I best to move my pay after the essential DDs have come out and just pay a token amount amount on my credit cards etc after sending 'the letter'?
4. As regards my new bank account - I have debt with Lloyds in the form of CC, O/D and loan, so need to move account. I already have another current account with Halifax (which they made me open when I got my mortgage) - but as this is now owned by Lloyds, should I get an account somewhere else entirely?

Apologies for the length of my post. I just have so many questions. Im sure this is the right thing to do to sort myself out, but Im panicing over the 'what if's'...

thanks again.

Growurown

iwilldoitthistime wrote: »

1. Will my credit score be trashed for ever?
2. What happens if something goes wrong - for example my car dies (I pray not, but you never know) and I dont have enough for a 'new' one? Will I be able to get any type of credit (obviously dependant on whether I could afford to pay it) either for a new car, or repairs??
3. How long does all this take to set up? Its past the half way point in the month for my pay, so I cant change anything as regards new bank details before pay day. Am I best to move my pay after the essential DDs have come out and just pay a token amount amount on my credit cards etc after sending 'the letter'?
4. As regards my new bank account - I have debt with Lloyds in the form of CC, O/D and loan, so need to move account. I already have another current account with Halifax (which they made me open when I got my mortgage) - but as this is now owned by Lloyds, should I get an account somewhere else entirely?

1. Not forever - defaults on your account remain for six years. If you go on a DMP you are likely to be defaulted.
2. If something goes wrong you can decrease your DMP payment to help cover the cost. Some people make token payments for a couple of months before starting the DMP so they can put money away for emergencies. You aren't supposed to take out any new credit when on a DMP, it is part of the agreement.
3. It can be set up very quickly, it only took a couple of weeks in my case. I would cancel all the creditor payments straight away send letters and token payments when the next payment is due. Put the money you would have paid them into your emergency fund.
4. I would play safe and open an account with someone you know you have no debts with. Lots of people go with the Coop.

Lastly well done for taking the first step. The next few months will be tricky but it does all settle down eventually, and there is a lot of help and advice on the forum. Good Luck

datlex

Have you checked out CAP Christians against poverty? They might be able to help you and it have less impact on your rating

elymum81

datlex wrote: »

Have you checked out CAP Christians against poverty? They might be able to help you and it have less impact on your rating

Don't think they offer any special service that other organisations don't and its my understanding that a donation is built into your budget with CAP... charity begins at home I think!

If you have not kept to your arrangements this will have already had a negative impact on your credit file. As previously advised defaults (which creditors seem quick to mark on file) will remain for at least six years.

elymum81

Growurown wrote: »

1. Not forever - defaults on your account remain for six years. If you go on a DMP you are likely to be defaulted.
2. If something goes wrong you can decrease your DMP payment to help cover the cost. Some people make token payments for a couple of months before starting the DMP so they can put money away for emergencies. You aren't supposed to take out any new credit when on a DMP, it is part of the agreement.
3. It can be set up very quickly, it only took a couple of weeks in my case. I would cancel all the creditor payments straight away send letters and token payments when the next payment is due. Put the money you would have paid them into your emergency fund.
4. I would play safe and open an account with someone you know you have no debts with. Lots of people go with the Coop.

Lastly well done for taking the first step. The next few months will be tricky but it does all settle down eventually, and there is a lot of help and advice on the forum. Good Luck

Couldn't agree more :-)

iwilldoitthistime

thanks for the information Growurown.

If the defaults will stay on my file for six years, is that six years from the final settlement date? So in effect the largest debt would be on my file for 12 years? (assuming it is settled last)
When Ive eventually paid everything off, is that when I need to start rebuilding my credit score?
Also - will my DHs credit score be effected in the same way? The credit is all in my name (although it is our joint debt).

I know Im doing the right thing as we cant go on like we have for the last couple of years, and Im probably just worrying as this is something new. This site has really helped me realise there are options out there and we can sort this mess out.

thanks again

elymum81

iwilldoitthistime wrote: »

thanks for the information Growurown.

If the defaults will stay on my file for six years, is that six years from the final settlement date? So in effect the largest debt would be on my file for 12 years? (assuming it is settled last)
When Ive eventually paid everything off, is that when I need to start rebuilding my credit score?
Also - will my DHs credit score be effected in the same way? The credit is all in my name (although it is our joint debt).

I know Im doing the right thing as we cant go on like we have for the last couple of years, and Im probably just worrying as this is something new. This site has really helped me realise there are options out there and we can sort this mess out.

thanks again

Yes it can be six years from the date of settlement should the creditor do this - haven't been around long enough to know whether they actually do this!

You may have a financial association if you have shared any financial products - eg. bank account. My ex's horrendous file did not affect mine and we shared a mortgage, bank account etc. Maybe have a look at credit expert for advice on that. x

loubie_lou

elymum81 wrote: »

Yes it can be six years from the date of settlement should the creditor do this - haven't been around long enough to know whether they actually do this!

You may have a financial association if you have shared any financial products - eg. bank account. My ex's horrendous file did not affect mine and we shared a mortgage, bank account etc. Maybe have a look at credit expert for advice on that. x

That's not necessarily the case. Different companies apply defaults at different times. In my situation, my companies started defaulting me about 4-6 months after I stopped making my normal payments. Good luck! :T

elymum81

loubie_lou wrote: »

That's not necessarily the case. Different companies apply defaults at different times. In my situation, my companies started defaulting me about 4-6 months after I stopped making my normal payments. Good luck! :T

I know its not necessarily the case....'Can' is different to 'will'!!!
You are correct that different companies work in different ways... some apply a default after 2-3 months, others longer, rarely some may leave it as long as a year.
I could be wrong but I'm pretty sure they can CHOOSE to leave a default on file six years from the date of settlement - bear in mind tho this is worse case scenario. x

gizmo111

elymum81 wrote: »

I know its not necessarily the case....'Can' is different to 'will'!!!
You are correct that different companies work in different ways... some apply a default after 2-3 months, others longer, rarely some may leave it as long as a year.
I could be wrong but I'm pretty sure they can CHOOSE to leave a default on file six years from the date of settlement - bear in mind tho this is worse case scenario. x

No - there is no choice about it - once a default is registered then it drops off whether settled or not after 6 years.

elymum81

gizmo111 wrote: »

No - there is no choice about it - once a default is registered then it drops off whether settled or not after 6 years.

So in theory if a default remains after six years you can request that it is removed if it doesn't automatically drop off?! Thanks... have learnt something!