Fearing our DMP is a massive mistake

desperado88

sourcrates wrote: »

You may encounter a similar situation then, I once spoke to one of my creditors (years ago) and asked them this very question, there reply was "we don't accept lower payments or DMP`s until the account has defaulted for at least 3 months" crazy as it may sound, its better for you, to wait until the accounts have either been sold on, or assigned to DCA`s, because otherwise most creditors only want full payment or nothing !!

Absolutely crazy is,nt it i spoke to a guy from the halaifax the other night on the phone and he advised me to default and pay something seven days latter when collections calls.he also told me to contact stepchange and said that their computer systems were linked....strange stuff.

sourcrates

desperado88 wrote: »

Absolutely crazy is,nt it i spoke to a guy from the halaifax the other night on the phone and he advised me to default and pay something seven days latter when collections calls.he also told me to contact stepchange and said that their computer systems were linked....strange stuff.

It is crazy, but that is how the banking system works, its best to get as much knowledge on the subject as possible, if you know how the system works, then it becomes less of a guessing game and you can turn it to your advantage.

jmhgibson123

i agree, you need to have defaulted by quite a bit you will get charges put on but dont stress that too much, i personally would do token payments for 6 months and then up the offers to creditors, i have done this and pay them from my bank account or online, choose the best way to pay when you write to them and ask them to send the details of how to pay, you can also ask them to only contact you in writing..to cut out the phone calls and really dont worry about the wording of the letters they are scare tactics. as each creditor sells your debt on if it was originally taken out before 2007 any new collection agencys that contact you send them a letter asking for a copy of original agreement as you dont tecognise the debt. there is a prove it template on here somewhere if the collection agencys cant find agreement they cannont enforce the debt in court..so in theory there is no harm in not paying. good luck

blisteringblue

I'm new to all this, like you I'm quite a high earner and was just about meeting minimum payments. OH has been at uni part-time for 2 years and in the run up to finishing she gave up her job at Xmas to concentrate on the qualification as its better for us in the long run.

Went onto the Stepchange site and did their little test and it advised us to do the DMP and we would be clear in under 5 years (owing 60k) assuming interest is frozen. Thought long and hard as credit rating would be trashed and decided this is what we would do.

Like you I was worried my payment plan showed my payments only around 20% less than the original minimums. I questioned this with Stepchange and they class the contract payment of a credit card as a flat 3%, this is the interest and an amount to payback the debt in a reasonable time. Hence the SC contract payment always look so much bigger.

We're in the middle of our first month and we've paid SC but it's not gone to the creditors yet. But most have signed up to the plan and have frozen interest or have frozen and holding for a month.

There was an interesting letter from MBNA when they agreed and they have 30% of all our debt in 2 CCs and they simply agreed, freezing interest and basically as long as we paid the amount in the plan and the whole process to clear the debts took less that 5 years they were quite happy.

So my plan now most seem to be on board is to not rock the boat. I'll "tweak" the review a little next year to make sure we are paying the same. If I can't tweak it sufficiently I will go it alone which is what you seem to be advised to do.

Another interesting thing I read is that Stepchange are actually sponsored by the financial industry. It's like a body they will work with because it is in their interest to get their money back, so less people look down the bankruptcy route.

I think reading your posts you just need to take a little more ownership yourself rather than relying on the DMC to do this for you.

Most creditors I've spoken to have been fine when you discuss it. They ask why your circumstances have changed, but as long as you talk to them, your plan looks fair and they are getting their money back most have been fine.

I wish you would name them though, if it is Stepchange then I am surprised because I've found them fine to work with.

jmhgibson123

my only issue i had with step change is that when a new dca took over some cc i sent the prove it letter which they couldnt produce documents for and step change would not let me take them off my plan, i had to cancel or they would continue to pay new dca, so i have sort of written of almost 4000 of debt which they didnt want me to, i find this a little strange

Puzzcat

I started my dmp in November and hadn't missed any payments prior to setting up dmp. 8 out of 9 creditors froze interest and number 9 has just refunded interest charged after a complaint to the fos. I am also with stepchange but also contacted all the creditors myself along with sc. I check my balances every month and update my sc debt on the website. They are my debts and I'm proud to be dealing with them.

rubyinthesky

I've started my DMP on 1st April. Hadn't defaulted but only because I was living on credit. StepChange didn't mention me defaulting first. MBNA, who I owe most to, have already replied that they are accepting my £12 a month and freezing interest and charges.

Still waiting to see what Barclaycard, Halifax, First Direct and Kent Reliance do, but all have put a hold on my account after I phoned them.

jmhgibson123

you are better off with defaults though regarding your credit file once a default is placed it takes 6 yrs from that date to drop off, if you have no default you are marked as ar constantly so debt takes forever to drop off

blisteringblue

jmhgibson123 wrote: »

you are better off with defaults though regarding your credit file once a default is placed it takes 6 yrs from that date to drop off, if you have no default you are marked as ar constantly so debt takes forever to drop off

While I do understand this principle it strikes me rushing to get the accounts defaulted so they drop off your credit file is only important if you want to get more credit? Isn't that why we are all here in the first place?

Personally I want the smoothest easiest ride through this process, with minimum fuss. All my creditors have been nice to speak to, all seem happy with what we are doing. This is a much better experience than all the calls and mither you will get for simply "disappearing" until they default you.

I don't plan on using credit again as we aren't going to move, and come the finish of this whole process I now know how to budget correctly so I'll actually pay for what I want with my own money.

sourcrates

blisteringblue wrote: »

While I do understand this principle it strikes me rushing to get the accounts defaulted so they drop off your credit file is only important if you want to get more credit? Isn't that why we are all here in the first place?

Personally I want the smoothest easiest ride through this process, with minimum fuss. All my creditors have been nice to speak to, all seem happy with what we are doing. This is a much better experience than all the calls and mither you will get for simply "disappearing" until they default you.

I don't plan on using credit again as we aren't going to move, and come the finish of this whole process I now know how to budget correctly so I'll actually pay for what I want with my own money.

I understand what your saying, but creditors have not always treated customers in financial difficulty fairly, I believe they have been told by regulators to be more sympathetic now due to the current financial climate, hence why you seem to have had little trouble in your case, it has not always been so, when I first got into trouble 7 or 8 years ago, they would not discuss any partial payments or arrangements until the account had got to the debt recovery stage, about 6-8 months down the line, then I had the worst DCA`s in the business ringing every 5 mins, 20 times a day threatening to take the clothes I stood in and everything inbetween, thankfully that is no longer the norm, but the exception, I learnt how to deal with such people, and, armed with that knowledge, they ceased to be any threat to me, what you have experienced would not have been possible in the past.