DMP & Mutual Support Thread - Part 11

sourcrates

heavenlyharry01 wrote: »

So literally stop paying?
Cancel the direct debits and ignore the bills?

Should I write to the creditors?

I was told it was good I hadn't defaulted! Arghh it's so confusing!

It can be very confusing yes, because the debt charity's will tell you one thing, and people who are actually going through it will tell you another.

From a credit file point of view, at the moment, if you haven't defauted, creditors may do one of three things, they may continue marking your file as up to date, or, they may add AP markers, or at some point, they may default you.

Unfortunatly there's no way of knowing how they will proceed.

So my advice is always to take matters out of the creditors hands so your pretty sure what will happen, once defaulted, you know where you are.

In the end its entirely up to you how you proceed, I'm sure others will chip in later with there advice, but all that will happen if you stop paying is they will default you sooner rather than later, then you have a clear 6 year window when you know your credit file will be clear again.

Rosettie

Hello everyone,
I am currently in DMP with Payplan with just under a year remaining of a 5 year plan. I would like to self manage and was wondering if anyone had done this. Just curious about if my creditors would accept the same payments as they currently do through Payplan and also how get bank details from them to set up standing orders.
Any advice would be gratefully received.

Little_Miss_Sunshine

carbootcrazy wrote: »

Sorry if the answer is obvious:o but how do we know whether accounts have been sold on or are just being managed by third parties? Some companies are a bit remiss at keeping us informed and 'in the loop':(

The letter refers to 'managing' and BOS as the client
Hope that helps

Little_Miss_Sunshine

heavenlyharry01 wrote: »

So literally stop paying?
Cancel the direct debits and ignore the bills?

Should I write to the creditors?

I was told it was good I hadn't defaulted! Arghh it's so confusing!

I didn't pay anything for 8 months. Once each account is defaulted we start paying. All self managed. Nothing terrible has happened.

s@sha

Hi to everyone on the thread, I'm so glad I discovered this thread today. Many, many thanks to those who have offered such reassurance and good advice, I plan to sit and read the whole thread when I have time. I'm a long time member of MSE, but rarely post these days, although I do keep up with the news and emails.
I'm currently two months into a DMP with StepChange, but had a nasty shock yesterday when I discovered that my current bank, FirstDirect, will no longer let me have my current account with them, because I have a £2,800 debt on their Visa credit card, which has now been added to the DMP. Theyve given me 60 days notice of account closure, and advised that I will probably have to get a 'basic' account with a high street bank.
I know it's 'only' a bank account, but I'm quite upset, and feel a bit like I'm having the rug pulled from under my feet. StepChange gave me no warning that this would happen, and I've been with FD as a good, reliable customer for 25 years.( I have not had debt problems before, this is mostly as a result of marriage breakdown)
FD have brilliant customer service, I had nightmares with Lloyds years ago, which is why I moved to FD in the first place, and I'm worried about switching accounts to one that isn't so good and all sorts of problems possibly happening.
I know it's probably a good thing, but to be honest, I feel almost like I maybe should have just managed that debt myself, and SC should have told me what would happen if I added it onto the DMP?
I don't really even understand WHY i have to change the account, I still have my mortgage with FD, they seem quite happy to let me keep that, and I don't have an overdraft facility on the current account anyway, so I can't go overdrawn with them, so why do I have to leave?
Is it worth throwing myself metaphorically at their feet and pleading for mercy (playing up the 'loyal customer for 25 years, etc bit? I really don't want to swap, and I feel a bit scared by it all now....I know it's stupid but I'm frightened now what other nasty shocks this DMP might cause.

sourcrates

s@sha wrote: »

Hi to everyone on the thread, I'm so glad I discovered this thread today. Many, many thanks to those who have offered such reassurance and good advice, I plan to sit and read the whole thread when I have time. I'm a long time member of MSE, but rarely post these days, although I do keep up with the news and emails.
I'm currently two months into a DMP with StepChange, but had a nasty shock yesterday when I discovered that my current bank, FirstDirect, will no longer let me have my current account with them, because I have a £2,800 debt on their Visa credit card, which has now been added to the DMP. Theyve given me 60 days notice of account closure, and advised that I will probably have to get a 'basic' account with a high street bank.
I know it's 'only' a bank account, but I'm quite upset, and feel a bit like I'm having the rug pulled from under my feet. StepChange gave me no warning that this would happen, and I've been with FD as a good, reliable customer for 25 years.( I have not had debt problems before, this is mostly as a result of marriage breakdown)
FD have brilliant customer service, I had nightmares with Lloyds years ago, which is why I moved to FD in the first place, and I'm worried about switching accounts to one that isn't so good and all sorts of problems possibly happening.
I know it's probably a good thing, but to be honest, I feel almost like I maybe should have just managed that debt myself, and SC should have told me what would happen if I added it onto the DMP?
I don't really even understand WHY i have to change the account, I still have my mortgage with FD, they seem quite happy to let me keep that, and I don't have an overdraft facility on the current account anyway, so I can't go overdrawn with them, so why do I have to leave?
Is it worth throwing myself metaphorically at their feet and pleading for mercy (playing up the 'loyal customer for 25 years, etc bit? I really don't want to swap, and I feel a bit scared by it all now....I know it's stupid but I'm frightened now what other nasty shocks this DMP might cause.

Hi,

Well it shouldn't of been a "nasty shock" for you, you owe the creditor money, which you are repaying via a DMP, the first thing stepchange should of told you was to change bank accounts, to a bank with whom you have no debt, this is basic, first step stuff here.

Any money you have in that account can potentially be taken by the creditor in payment of your outstanding debt, it's called the right of set off.

First direct are doing you a favour here, possibly because of your previous good standing, i would get a new basic account as soon as possible.

abby1234519

Quick Question - I'm not on a DMP - asking for husband. Can you reclaim charges for accounts on a DMP. For example - CC 1 was told going on a DMP, 6 months later they were still adding missed payment charges.

I understand why - its the process, but would he have any luck getting that 6 x £12 credited back to the account?

blisteringblue

sourcrates wrote: »

Hi,

Ideally you should get all your accounts defaulted first before starting any kind of debt management plan.

Usually no payments for 6-8 months or so does the trick, if you don't get defaulted, you instead get "AP" markers (arrangement to pay) which will stay on your credit report for a further 6 years AFTER you have finished paying off your debts.

So getting defaulted and saving a good emergency fund, should be your first priorities.

Non of the debt charities will tell you this.

Once your account defaults, no further interest or charges can be added, the line is drawn in the sand so that 6 years from date of default, they will all disappear from your credit file.

Very important you do things in the correct order.

POST OF THE WEEK !! :T

Really wish we had done this when we were green, but I've forced a few defaults since but have a few AP debts which I'm stuck with but at 0% so not rocking the boat.

Little Miss Sunshine is right though, nothing disastrous will happen when you stop paying. Yes you may get a number of phone calls and messages, but these are easy enough to ignore. Nobody will come banging on your door. As long as you don't simply disappear, keep them informed by letter what you are doing and you will be in a far better position come the start of paying the DMP.

s@sha

sourcrates wrote: »

Hi,

Well it shouldn't of been a "nasty shock" for you, you owe the creditor money, which you are repaying via a DMP, the first thing stepchange should of told you was to change bank accounts, to a bank with whom you have no debt, this is basic, first step stuff here.

Thank you. Yes, I wish they had told me that, because it may seem stupid, but it never occurred to me that my current account would be impacted in any way by starting a DMP. I have been suffering with depression, and now I'm on the mend it's been a big step for me to start sorting out this debt problem. So although it's a small matter, a little thing like this just throws me.
I will ditch the idea of asking to stay with FD and apply for a basic account from one of the providers mentioned on the main site article.

s@sha

sourcrates wrote: »

Hi,

Ideally you should get all your accounts defaulted first before starting any kind of debt management plan.

Usually no payments for 6-8 months or so does the trick, if you don't get defaulted, you instead get "AP" markers (arrangement to pay) which will stay on your credit report for a further 6 years AFTER you have finished paying off your debts.

So getting defaulted and saving a good emergency fund, should be your first priorities.

Non of the debt charities will tell you this.

Once your account defaults, no further interest or charges can be added, the line is drawn in the sand so that 6 years from date of default, they will all disappear from your credit file.

Very important you do things in the correct order.

I really, really wish I had known this beforehand, too. Why are the debt charities not telling people to do this, instead of advising them to go straight on a DMP (as I now am)?