DMP & Mutual Support Thread - Part 11

sourcrates

heavenlyharry01 wrote: »

What I didn't understand is the selling of debts onto collection companies. Surely they get sold cheaply?? So why don't creditors accept full and final settlements easier before they get sold on??

A very good question, and one I don't know the answer too.

They actually get paid twice you see, once when they write off the debt and sell it, then again when they claim tax relief on the write off.

It's basically too tedious for them to deal with things of that nature, hence we are blessed with the debt collection industry !!

[Deleted User]

A couple more queries. Sorry!

Whilst on my SC DMP all but one of my debts, even before they were defaulted, have been marked 'DM' by Noddle. If people go self-managed do they still get recorded as DM by such as Noddle?

Also, one of my debts is with the Asda CC (suppled by Santander). For the length of my DMP it seems to be New Day who have been dealing with it/collecting it. I'm not sure if New Day is a DCA who have bought the debt or if they took over the Asda/Santander card business in general. Does anyone know, please? Interest has been frozen on this since the start of my DMP but it was never defaulted. It is being marked on Noddle as 'Up to date', it always has been since the DMP has been operating. Any idea what this means and do you think they could restart adding interest anytime soon?

This one is now my smallest debt and easily possible as a F&F target in a couple of months time. If New Day are just the owners and haven't 'bought' the debt I'm thinking a good deal might be just a dream.

Strathmore100

Brief update from me and further questions.

Now that I've decided to go down the DMP route I've so far applied for a new bank account with first direct, they are part of the HSBC group so I think that isolates my income from my creditors.
They are as follows;
Barclays
Barclaycard
Halifax
NatWest
Hitachi finance
Does anyone think that they could be related to HSBC?

I've also taken out another loan to pay off the joint account o/d so that I can close that account and disassociate my o/h from the DMP. I felt awful when I clicked 'apply' for the loan with the knowledge that I will be defaulting on payment straight away. But it's more important to protect my o/h. I just hope that they don't get nasty about it. I also found it very strange that they gave me a loan so easily, I know that I've never missed a payment on anything but my current personal debt is already high and I have 2 cc available to me that I haven't used in years with a combined limit of £26,000 and I was honest with my new much lower salary in the application, so I would have expected them to think, 'hang on a minute, he can't afford this'.

I'm getting ready to send my token payment letters out next week and will also make my first call to SC.

My main concern is that I've been playing around with the SC budget planner and cut back where I can which leaves me with a monthly payment of £120 to service £23,000 of debt:eek: the salary that I've used is the minimum that I can expect on a quiet month at work but for approx 6 months of the year it will likely be up to £250 per month higher so there is scope for me to pay more in certain months. I'm worried that the creditors Will flat out refuse to accept such low payments once SC have split the amount between them and end up pursuing me through the courts. I should find a way to cut our budget even more but right now I can't see where to make any more savings. I'm not planning on making such low payments forever as in 2 years I am very likely to be promoted and that will provide a very substantial increase in salary again so I'll be able to reduce my DFD by 10 years.
Does anyone have any thoughts/experience of a DMP being accepted with such a low payment for my level of debt?

Thanks again everyone

sourcrates

Hi carbboot,

NewDay is a leading consumer finance provider, specialising in the UK credit card market, they bank roll many of the bad credit, credit cards available in today's market.

Your credit file can be marked with any of the markers you describe, it's entirely up to the creditor.

Anything is possible, so just keep an eye out for interest starting again, and if it does, be ready to complain.

January2015

Strathmore100 wrote: »

Brief update from me and further questions.


My main concern is that I've been playing around with the SC budget planner and cut back where I can which leaves me with a monthly payment of £120 to service £23,000 of debt:eek: the salary that I've used is the minimum that I can expect on a quiet month at work but for approx 6 months of the year it will likely be up to £250 per month higher so there is scope for me to pay more in certain months. I'm worried that the creditors Will flat out refuse to accept such low payments once SC have split the amount between them and end up pursuing me through the courts. I should find a way to cut our budget even more but right now I can't see where to make any more savings. I'm not planning on making such low payments forever as in 2 years I am very likely to be promoted and that will provide a very substantial increase in salary again so I'll be able to reduce my DFD by 10 years.
Does anyone have any thoughts/experience of a DMP being accepted with such a low payment for my level of debt?

Thanks again everyone

Hi

Our DMP payments are now under £500 pm and we are repaying over £84k of debt. I think that works out to a similar debt payment/debt level ratio as you are proposing. You are proposing approx 0.52% monthly payments (£23k x 0.52%) and we pay approx 0.56% - so I wouldn't worry too much about the amount you are proposing.

As and when you get extra money I would suggest you stash it away for either emergency funds or saving towards a partial and final settlement offer on one or more of your debts (also known as full and final settlement offer). Don't worry about paying anymore to the creditors than is agreed.

Also when setting up your DMP build in wriggle room in your expenditure calculations. You are going to be on a DMP for years probably and whilst you won't live extravagantly you do need to be able live and have some small pleasures/luxuries occasionally. Don't be too hard on yourself and your family.

Good luck with it.

Strathmore100

Thanks January2015, very kind of you to reply and give an insight into the percentages involved, it's certainly helped to relieve some of the stress.

Perpetual_Miser

Hello all,

I'm in need of a bit of advice:

I've been towing the line on my DMP with StepChange since Nov 15 and, as you can see from my Sig, I've made fairly good progress.

Now, without going into much detail I will be undergoing a very big move next month which will mean I will be temporarily unemployed.

I should have enough savings to cover my current DMP payments for the next 2-3 months (by which time I expect to be back in employment). However, this doesn't seem very sensible as I will be leaving myself quite short in the interim.

What are peoples' experiences with temporarily reducing DMP payments? Are my creditors likely to kick up a fuss?

Whilst I hate backpedaling, it would only be a temporary reduction before resuming in earnest again very soon.

Thanks,

January2015

Perpetual_Miser wrote: »

Hello all,

I'm in need of a bit of advice:

I've been towing the line on my DMP with StepChange since Nov 15 and, as you can see from my Sig, I've made fairly good progress.

Now, without going into much detail I will be undergoing a very big move next month which will mean I will be temporarily unemployed.

I should have enough savings to cover my current DMP payments for the next 2-3 months (by which time I expect to be back in employment). However, this doesn't seem very sensible as I will be leaving myself quite short in the interim.

What are peoples' experiences with temporarily reducing DMP payments? Are my creditors likely to kick up a fuss?

Whilst I hate backpedaling, it would only be a temporary reduction before resuming in earnest again very soon.

Thanks,

Just contact SC, explain the situation and advise you will need to drop to token payment for 'x' many months. I think SC like £5 minimum token payments from memory.

Don't worry too much about this - these things happen. SC and your creditors will be fine with this short term blip in payments.

[Deleted User]

Perpetual_Miser wrote: »

Hello all,

I'm in need of a bit of advice:

I've been towing the line on my DMP with StepChange since Nov 15 and, as you can see from my Sig, I've made fairly good progress.

Now, without going into much detail I will be undergoing a very big move next month which will mean I will be temporarily unemployed.

I should have enough savings to cover my current DMP payments for the next 2-3 months (by which time I expect to be back in employment). However, this doesn't seem very sensible as I will be leaving myself quite short in the interim.

What are peoples' experiences with temporarily reducing DMP payments? Are my creditors likely to kick up a fuss?

Whilst I hate backpedaling, it would only be a temporary reduction before resuming in earnest again very soon.

Thanks,

First of all, congratulations on what you've achieved so far:T:beer:


As for reducing payments because of a temporary problem well these things happen as January said. I'm sure SC are well used to this sort of thing happening during the course of people's DMPs.


I had major financial problems myself early this year and with no credit and very small emergency savings I had to resort to speaking to SC and reducing my payments. I paid £5 to each creditor as SC suggested and they arranged it all for me. The lady I spoke to at SC even suggested that I take more than the initial 2 months leeway I'd asked for. She said it was sensible to builds up a little emergency fund so I didn't have to keep asking creditors to accept reduced payments further down the line. SC frown on doing it too often;). I was dubious about doing that as I really want to get the debts slayed as soon as possible but I did it and am really glad I did. None of the creditors batted an eye or even contacted me about just getting token payments for 3 months:)


Just do what's right for you. SC are very understanding about these things. Good Luck for the rest of your DMP and the big life changes that you have planned:beer:

sourcrates

Ok,

Had a few PM`s from people worried about creditor legal action during the period of non payment, in order to attempt to secure a default on your DMP accounts.

Let me make it crystal clear the usual order of events in this process.

In order for a creditor to take legal action against you for non payment of account, the relationship between you must of irreconcilably broken down, this is normally expressed by the issuing of a default notice, which normally gives you 14 days in which to bring your account up to date, otherwise a default will be placed on your credit file, hurrah i hear you say !!

Once said default has been placed, you have succeeded in your goal.

Note again, legal action cannot be taken unless an account first defaults.
Neither can they sell that account on either.

In practice, your lenders may say they will concider legal action, in reality, all they do is pass accounts on to debt collectors, either to manage your accounts, or on occasion they get sold on.

Of course there will always be one exception, but as a general rule of thumb, this is how the system works, if legal action were to be taken, you would have plenty of written notice (civil procedure rules) and the chance to avoid it, so worrying about been taken to court should not really be high on your list of priorities.

Hope this helps.