If considering a DMP-when do I cancel the DD's

Bettingmad

Edit the below to suit when sending token payments

DearSir/Madam

Re:- Account/ReferenceNumber *********

We are writing to inform you thatwe are seeking advice and assistance from Stepchange, regarding our currentfinancial difficulties, where we are currently unable to make the minimumpayment to our account. As per your advice on your monthly statement I haveinformed you on the telephone and contacted Stepchange. Stepchange Ref. No. ********

To this end, we would appreciateif you could hold any action on the above account for a period of at least 30 daysto allow for a solution to be sought from Stepchange.

Also, during this period, couldyou please freeze interest and/or any other charges accruing on the above account?

In view of our circumstances, please accept a token offer of £1 towards this month’s payment.

The above request is asked as perguidance issued by the Lending Code 2011, the relevant extracts are listedbelow.

Breathing space for personalcustomers
201. a customer can demonstrate to a subscriber that they are making agenuine effort to develop a repayment plan, using either a debt advice agencyor a self-help tool the subscriber should suspend collections activity relatedto the customer’s current account, credit card and/or unsecured personal loanwhile discussions continue, for a period of 30 days.
202.The subscriber should confirm with the customer and/or their adviserthat collections calls and letters will be suspended during the ‘breathingspace’ period (except where required under Consumer Credit legislation) andshould discuss with the customer and/or their adviser how the account willcontinue to operate during the 30 day period.

203.Where the customer and/or their adviser provides clear evidence ofdemonstrable progress being made in developing a genuine repayment plan, butwork has not yet concluded, subscribers should extend the breathing space forup to an additional 30 days.

Interest and charges concessions

224.Subscribers should consider reducing or stopping interest and chargeswhen a customer evidences that they are in financial difficulties. Suchreduction/suspension decision should be based upon an income and expenditurestatement indicating that they are unable to make repayments sufficient to meetcontractual terms. Where a customer is able to make only token payments, theirdebt should not increase as a result of interest and charges levied. Theassessment should reflect the customer’s lack of ability to pay rather than thestage an account has reached in the arrears cycle or whether they are usingfree sources of debt advice. Where a firm declines to allow concessions, theyshould be prepared to explain why to the customer or their adviser if requestedto do so.

We hope you will act in asympathetic way due to our financial difficulties and again ask that you willconsider taking no further action on the account for 30 days. I also ask thatyou suspend interest and charges in line with the lending code.

We further ask that the enclosedpostal order is only cashed by you if you are in agreement with our currentproposals.

Pleasecan you ensure this information is passed onto your relevant department.

We look forward to hearing fromyou as soon as possible.

Yours faithfully

Sign Digitally

Bettingmad

The format has come out all wrong and spaced together words!!! May have to rather more editing.

alarmed

Thank you very much.
Also how does being on a DMP affect my ability to get cheap car insurance,home insurance etc and paying them on a monthly DD?Apologies if its a silly question
I believe if you pay monthly on these its through a type of credit agreement?.

cc4rhu

It doesn't affect those in the slightest.

Bettingmad

alarmed wrote: »

Thank you very much.
Also how does being on a DMP affect my ability to get cheap car insurance,home insurance etc and paying them on a monthly DD?Apologies if its a silly question
I believe if you pay monthly on these its through a type of credit agreement?.

It's never effected me, I have renewed all my insurances via instalments without any trouble.
No such thing as a silly question.

alarmed

gizmo111 wrote: »

Do you owe money to your current bank?

I have an overdraft with them that I use amost fully each month

Bettingmad

alarmed wrote: »

I have an overdraft with them that I use amost fully each month

Is the OD going to be part of your DMP?

If it is you are going to need to set up an account not linked to any of your debts pronto and arrange for any income to go into the new account.

alarmed

Thank you Bettingmad you are a great help and I really appreciate it.

Just curious and I digress here but those who normally use a broker to organise thier finances,mortgages etc...how did they react when they discovered you elected for a DMP?
Only ask because mine has been a close source of info over the last few years and we kind of feel like we have let hime down in a sense!

Bettingmad

Have you completed a SOA yet? You will get better advice when this has been complted.

You will probably need to ask the mortgage question on the Mortgage threads for the best advice.

Hopelessly_Hopeful

alarmed wrote: »

Thank you Bettingmad you are a great help and I really appreciate it.

Just curious and I digress here but those who normally use a broker to organise thier finances,mortgages etc...how did they react when they discovered you elected for a DMP?
Only ask because mine has been a close source of info over the last few years and we kind of feel like we have let hime down in a sense!

Try not to worry about the broker - it's a business transaction.

You may find you wont have much luck changing mortgage whilst on the DMP unless with your current lender.

How long is your DMP scheduled to run for

HHx