Advice please, making extra payments while on DMP

missnb

Hi everyone,

I am currently on a DMP and make fixed payments to creditors every month. There are a couple of creditors who I now owe less that a hundred pounds each to. Over the next couple of months, I will be in a position to pay over a hundred pounds extra towards my debts every month. So, my question is, should I:

1. Add this amount to my DMP payment, therefore paying a proportion more to each creditor every month?

OR

2. Begin paying certain creditors off completely and removing them from my DMP, in the hope that I can avoid defaults from the smaller amounts owed, and concentrate on repaying the larger amounts through the DMP?

Any advice is appreciated.

Thanks

happy_bunny_2

If not being charged interest on the smaller debts, you could keep the money to one side and then look to do a full and final at some point down the line, on a pro-rata basis.

Is it a self managed DMP?

missnb

No, the DMP is through StepChange. I wasn't sure if it was 'courteous', to make sure all lenders were getting a fair share of the money I have spare.

I already have a default from one lender on my plan, so am I right in thinking I may as well just continue paying that creditor as part of the DMP?

I've heard so many horror stories about defaults being randomly issued after months of being on a DMP, so I am worried these other lenders could turn round and issue a default out of the blue, after months of me paying the lowered payment to them with no problems.

Then again, is one default just as bad as five or more? Some people on here say if you've got one, you may aswell have a million with regards to how it affects your credit score.

sourcrates

A default notice is just a piece of paper, I would think you have already been defaulted since your in a DMP, your credit is most likely already shot so I wouldn't worry about that side of things, a default notice is a letter basically telling you that you have not made the original required payments, something the creditor must send you by law, I would just concentrate on getting them paid off as soon as you can and don't worry about things you cant control, if you can pay off one creditor, then do so, if the amounts are low, possibly ask each for a settlement figure first, then add the extra money to your DMP payments, or you could save up a bit of cash to pay off another debt, your choice.

happy_bunny_2

missnb wrote: »

No, the DMP is through StepChange. I wasn't sure if it was 'courteous', to make sure all lenders were getting a fair share of the money I have spare.

I already have a default from one lender on my plan, so am I right in thinking I may as well just continue paying that creditor as part of the DMP?

I've heard so many horror stories about defaults being randomly issued after months of being on a DMP, so I am worried these other lenders could turn round and issue a default out of the blue, after months of me paying the lowered payment to them with no problems.

Then again, is one default just as bad as five or more? Some people on here say if you've got one, you may aswell have a million with regards to how it affects your credit score.

In theory, you are correct. You should be fair to all creditors. Maybe ask Step change for their thoughts?

What is the status of the accounts on your credit report?

How far into the DMP are you?

Some creditors issue defaults after years, even just before paying off in full. if this happens you can complain to try and get the default moved to earlier, as they are supposed to default within 6 months according to ICO guidelines, but DMPs can be a bit tricky.

I am of the opinion of default first, then worry about it after that. not everyone agrees with that mind...but after 6 years, its sorted from a credit file perspective.

happy_bunny_2

for DMP Defaults, take a look at paragraphs 22-24 on here:
https://forums.moneysavingexpert.com/discussion/3172602

The more general points on defaults are in the paragraphs before this.

missnb

Thank you for your replies.

Barclaycard has noted on my credit file 'arrangement to pay', but all the dots are green, and it says overall, account it 'up to date'.
All the other lenders (except Capital One - which shows Default since April) say 'Debt management plan' in April, then 'arrangement to pay' thereafter, and overall 'up to date'.

I have been in the DMP since April and haven't missed a payment so far. I wonder if it is worth having a notice put on my credit file that I am in a DMP, with regards to the Capital One debt?