Lloyds Default DMP Removal Help

ZoeB23

Ok a little long winded sorry but here goes....
I joined Step Change September 2014, stuck all my creditors in there and away I went paying them off, got to February this year and I started to receive default letters from Capital One and Lloyds bank. I have since had a change in circumstances towards my income and with this in mind I decided it was time to come out the DMP and go back to my normal payments with my creditors as the prospect of a load of defaults (which I was unaware would occur) was not what I wished for for the next 6 years.

I decided to challenge the defaults and try and get them removed - Capital one would only remove the default if I paid off my arrears and went back to my normal payments with them, which I did and this one has been removed. Lloyds who I have a loan with, have simply said tough you have the default and that's that.
I complained and spoke to someone last Friday saying I wasn't aware that joining a debt charity, which they suggest to do when experiencing financial difficulties, would lead to a default. I explained I wanted to go back to my normal payments too. She said she would call me back that evening on the outcome. She didn't call back and today I received a letter from them.
They have said that upon review of the situation there has been no mistake in the default being applied but they apologise for the poor service I received and would like to offer me £100.00. They admit that although the blame lays with Step Change they also believe they are at fault for not informing me the impact the DMP could have on my credit file.
They also go onto explain that when I customer enters financial difficulty the account falls under the control of the collection centre they offer help by a repayment plan this is a short term nature and if the account is not brought up to date within 6-12 months the account then falls in recoveries. And this is when the default will be placed on my file.

They put my account into recoveries from collections in March, which is 6 months since I started my DMP, but I did speak to them in April telling them I was coming off the plan, I asked them if I could go back to normal payments but they just told me I had to wait till September to have a financial review to see if I could afford it.

They listened to a call I had in January in which I told them the interest I was paying each month wasn't touching the balance of the loan, to which they agreed to stop all interest and charges, they felt this would mean I wouldn't be able to bring my account up to date and because of this the account would be passed to recoveries.

Do I stand a chance of questioning them about this? Could they have offered me to pay the arrears back before the 12 month short term repayment plan they call it is up, when I contacted them about ending the DMP? They obviously assumed my financial situation would be long term because of the DMP so that's obviously why it went to recoveries.

I came out the DMP because of the impact it would have but I'm still stuck with this!
Any help or advice would be great!

sourcrates

Hi,
If you don't make contracted payments to your creditors, then it's fairly common knowledge that a default is more than a possibility, entering a DMP will almost certainly get you defaulted.

A creditor usually can serve you a default notice after 3-6 contracted payments are missed, but they can default you at any time, you should of been informed by your creditors and stepchange that this was a likley outcome of entering a DMP.

ZoeB23

Yeh unfortunately I know that now it's just they way they've gone about it I'm wondering about....

xHannahx

The paperwork stepchange send out makes it clear of the credit rating impact. If you do their plan online it also makes the impact clear.

Sazzie23

I'm surprised you didn't get paperwork from creditors explaining you'd get a default if you didn't pay. I started my DMP in 2013 and creditors sent regular letters at the start saying you'll get a default...actually in the end most of them haven't when I wish they would, but they did threaten it all the same.

I don't remember SC specifically telling me I'd get defaults, but they did make it clear to me that a DMP wasn't supposed to be an easy option & for many folk its not an option to not do it.

ZoeB23

Yes I since discovered this about the DMP. This is why I have cancelled it all, I can't be doing with all those maybe defaults etc.

It's the way Lloyds have moved my account the way they have done, that's what I'm asking advice for?

sourcrates

ZoeB23 wrote: »

Yes I since discovered this about the DMP. This is why I have cancelled it all, I can't be doing with all those maybe defaults etc.

It's the way Lloyds have moved my account the way they have done, that's what I'm asking advice for?

You appear to of turned around your situation in a short space of time, possibly due to an increase in your income, most people who enter a DMP don't have that luxury unfortunately, I think you were possibly a little nieve about the effect a DMP would have on your credit file.

Don't get me wrong, you seem to of done well, it's just that creditors will take a little more convincing that things have improved, in such a short space of time.

They can only act on the information you give them, you have complained, but you still feel the default was applied unfairly, you can go to the FOS, as long as it's within 6 months of your complaint , but I think they will side with the creditor on this.

ZoeB23

Thanks for your advice sourcrates..... I'm so frustrated with it, I called the lady dealing with the complaint yesterday and again she still hasn't contacted me back to discuss.
I guess I was hoping they'd offer me to pay the arrears and get back up to date with it and remove the default like Capital One have done. I don't know whether to just leave it and be stuck with the default, but then I'm restricted for 6 years