DMP & Mutual Support Thread - Part 11

Nigglesquiggle

Thanks for the advice January2015. Hopefully just paying the token payments will give us a bit of breathing space to build up a bit of an emergency fund.
Do you suggest we should go it alone with creditors from now on?
Many thanks

January2015

Nigglesquiggle wrote: »

Thanks for the advice January2015. Hopefully just paying the token payments will give us a bit of breathing space to build up a bit of an emergency fund.
Do you suggest we should go it alone with creditors from now on?
Many thanks

As SC won't take your token payments, if you want to continue the DMP I think you will need to go it alone.

I used the NEDCAB template to help me set up my self-managed DMP.

Seriously, take some time to think about what's right for you and your family. I don't ever advise to sell your home to clear unsecured debts, but I do appreciate for various reasons some people feel this is the right thing for them to do. My thoughts are that you will struggle to get back on the ownership housing ladder (6 years of bad credit reference files) and you will be paying rent which will be dead money to you. If you can keep your home eventually you will have somewhere which is free to live - because the mortgage will be paid eventually.

The most important thing is don't panic - nothing bad is going to happen. Let the creditors know the situation change and make your token offer.

January2015

I was posting on another thread about defaults and moaning about BC as usual. BC didn't default our accounts until a couple of months ago. That is a good 22 months from when we notified them of our situation and that we were entering a DMP.

I've been arguing with BC that this was unacceptable. I wrote to them quoting The Information Commissioner’s Office (ICO) Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies, Sections 1 & 4 - which states

"1. Data that is reported on your credit file must be fair, accurate, consistent, complete and up to date.
Lenders that supply data to the CRAs are required to ensure that the data is accurate, up to date and meets agreed quality standards.

4. If you fall into arrears on your account, or you do not keep to the revised terms of an arrangement, a default may be recorded to show that the relationship has broken down.
As a general guide, this may occur when you are 3 months in arrears, and normally by the time you are 6 months in arrears.

The bold bits are the section headings and the next bit is the info under those headings in the ICO document.

I told BC I thought they were unreasonable to wait 22 months when we made our situation clear to them in January 2015 and this was confirmed by SC in March 2015. I advised I felt they had placed us at a disadvantage because their reporting was not:

• fair - because it meant our credit files would show defaults for over a year longer than they should

• accurate, up to date and meeting agreed quality standards - because defaults not registered in a timely manner

We wrote about both accounts in the same letter and at the same time I also reminded them they should treat multiple accounts the same, so I am eagerly watching/waiting for the backdated default on the other account:D

This will mean all our defaults will have occured in 2015 :j

January2015

Ok - so we have some money saved towards F&Fs (which we've already offered and they've been refused). We are re-thinking what we do with that money. We have a consolidation loan which is at a horrendous rate of 12.34% (don't shout at me....that was my pre-DFW days ). We've still got 10 years to go on this horrible thing.

We owe just in excess of £60k on it. I've just done the MSE overpayment calculator thing and worked out that if we make a lump sum payment of almost £30k and continue paying at the same monthly rate we will be clear in less than 3 years. We can then use the money we were paying this to save for F&Fs for unsecured debts.

All our unsecured debts are all at 0% interest anyway now. Our main mortgage tracks at 1% above the base rate (nice and low at the moment).

I think that's the best use of our windfall money. Reduce the horrific interest loan as much as possible and then totally clear it in a third of the time it should have taken. Then save for F&Fs - which we will be able to save for faster because we will have the monthly loan money to save.

Am I missing something - it seems so obvious and I think I only didn't think of it before because I had put mortgage and secured loan to one side in my head as being paid - safe and sorted as priority debts on our DMP, so to speak.

Edit: MSE overpayment calculate estimates

Overpaying would save you £40,364 in interest alone,
and mean you pay the debt off in full 6 years & 5 months earlier.

Sazzie23

January2015 wrote: »

Ok - so we have some money saved towards F&Fs (which we've already offered and they've been refused). We are re-thinking what we do with that money. We have a consolidation loan which is at a horrendours rate of 12.34% (don't shout at me....that was my pre-DFW days ). We've still got 10 years to go on this horrible thing.

We owe just in excess of £60k on it. I've just done the MSE overpayment calculator thing and worked out that if we make a lump sum payment of almost £30k and continue paying at the same monthly rate we will be clear in less than 3 years. We can then use the money we were paying this to save for F&Fs for unsecured debts.

All our unsecured debts are all at 0% interest anyway now. Our main mortgage tracks at 1% above the base rate (nice and low at the moment).

I think that's the best use of our windfall money. Reduce the horrific interest loan as much as possible and then totally clear it in a third of the time it should have taken. Then save for F&Fs - which we will be able to save for faster because we will have the monthly loan money to save.

Am I missing something - it seems so obvious and I think I only didn't think of it before because I had put mortgage and secured loan to one side in my head as being paid - safe and sorted as priority debts on our DMP, so to speak.

Edit: MSE overpayment calculate estimates

Overpaying would save you £40,364 in interest alone,
and mean you pay the debt off in full 6 years & 5 months earlier.

Yup seems sensible to me, that's what I've been advised to do to, (fortunately my consolidation is at 7%, but that's bad enough:mad:).

Saz

Sazzie23

GrinC wrote: »

Also - what does F&F stand for please?

F&f btw, suggest you start with an offer of 20% of what is outstanding and negotiate from there. DCAs usually more likely to settle for lower than original creditor. Good luck and let us know how you get on.

Saz

lardboy wrote: »

Afternoon all,

My current DMP administrator (Whittaker Bell) will shortly stop managing my plan. They have suggested Angel Advance as an alternative. Does anyone have any experience of Angel Advance? Had a quick look at their website and their fees seem quite high.

Alternatively, are Stepchange a viable alternative? I've been quite happy with the service I've received from my paid plan - yep , it was my choice to go into a plan with fees, no regrets there.

As a charity though, I'm wondering whether the Stepchange service/professionalism might not be up to scratch. Happy to be disabused of this notion!

Thanks

Lardboy

. Stepchange (SC) are fine, but not very flexible, clearly you've been able to understand about fees and stuff so if have thought you can easily go it alone. Just requires a bit of organisation and discipline.

Probably someone had suggested NEDCAB for DIY already.

Nigglesquiggle wrote: »

Hi everyone!
I am new to this thread and would really appreciate some advice. Myself and my husband have been on a DMP with SC for approximately 4 years we have debts of around £33k (original balance approx £55k). We pay £492 per month and it is due to be cleared in 5 yrs.
We are finding it really difficult at the moment. We have actually put our house on the market and considered downsizing or renting to clear the debts. Due to our circumstances we have been unable to find a mortgage with anyone so if we do move it will have to be the renting option. We have approx £70k in equity.
I have recently started a University course so my working hours have been reduced to 2 days per week. This may appear selfish of me but I was thinking of the long term gains when/if I qualify in 4 years time.
We have just done a credit review with SC and as our incomings have decreased and some of our outgoings have increased SC have advised they are a charity they can no longer take payments from us. They have advised that we can either suspend payments for 3 months and just pay creditors token payments of £1 or declare bankruptcy.
We are really confused as to which option to take. This situation has put a huge strain on our relationship and we are so low about everything at the moment. Just feel so ashamed and helpless!!! Sorry about the rant but would appreciate any advice.
Many thanks xx

Ok stop right there, don't do anything til you've decided what route to take. I'm going to say absolutely don't sell to clear your debts. Put your chins up (take the ashamed faces off) and remember that you are not bad people, you've had some difficult times and you can sort it all out.

There are other routes to deal with debt, DMP may or may not be your best option, I can't say, but I'm sure selling up is not in your interest unless for some reason you want to move house.

This is what I would do :

1. stop paying: if SC think you can't afford it,then you really can't.
Plan to have at least 3 months of token or 0 payments, while you think about it. Unlikely any creditors will take action against you in that 3 months. Hopefully some will move towards getting defaulted and all should stop your interest if they haven't already. If you are going to go bankrupt anyway, may as well stop paying now. If you stay on a DMP then it'll have little effect in the long run.

2. Have a good read through the DFW forums about bankruptcy, DMP and other options.

3. Come back on here and ask more questions.

4. Consider if you can increase your income, decrease your outgoings (other than unsecured debts).

5. Consider CCA - research it - your debts.

6. Think about it a bit more then tell us what you think and we'll help.

DO NOT SIT AT HOME WORRYING ABOUT THIS AND FEELING BAD, IT DOES NOT HELP. we are here for you.

Saz

January2015

Sazzie23 wrote: »

Ok stop right there, don't do anything til you've decided what route to take. I'm going to say absolutely don't sell to clear your debts. Put your chins up (take the ashamed faces off) and remember that you are not bad people, you've had some difficult times and you can sort it all out.

Saz

Sazzie - I love this post. Say it straight :rotfl:

I'm with you 100% on this piece of advice

[Deleted User]

Nigglesquiggle wrote: »

Hi everyone!
I am new to this thread and would really appreciate some advice. Myself and my husband have been on a DMP with SC for approximately 4 years we have debts of around £33k (original balance approx £55k). We pay £492 per month and it is due to be cleared in 5 yrs.
We are finding it really difficult at the moment. We have actually put our house on the market and considered downsizing or renting to clear the debts. Due to our circumstances we have been unable to find a mortgage with anyone so if we do move it will have to be the renting option. We have approx £70k in equity.
I have recently started a University course so my working hours have been reduced to 2 days per week. This may appear selfish of me but I was thinking of the long term gains when/if I qualify in 4 years time.
We have just done a credit review with SC and as our incomings have decreased and some of our outgoings have increased SC have advised they are a charity they can no longer take payments from us. They have advised that we can either suspend payments for 3 months and just pay creditors token payments of £1 or declare bankruptcy.
We are really confused as to which option to take. This situation has put a huge strain on our relationship and we are so low about everything at the moment. Just feel so ashamed and helpless!!! Sorry about the rant but would appreciate any advice.
Many thanks xx

Nigglesquiggle, I'm really sorry that you're feeling so worried at the moment especially after doing so well to pay off such a big chunk of your starting debt.

Can I be nosy (sorry:o) and ask why SC have refused to act for you? What has the fact that they are a charity got to do with it? Maybe I misunderstood and they will represent you but only if you do tokens and not much reduced regular payments. Or have they cut you adrift totally and suggested you do the payments yourself? I know when I had some major financial emergencies early last year I contacted them asking to temporarily drastically reduce my payments to creditors for a couple of months. They said token payments of £10 a month per creditor were better rather than, say, the £30 I suggested. I had to do a review when I was able to resume normal payments again but they carried on acting for me throughout which was very reassuring at the time.

I'm now in the process of going self-managed after just under 4 years but needed the reassurance of SC until very recently.


Good Luck whatever you go on to do:beer:. Please take the advice of the wise people on here, they really know their stuff from going through this themselves

blisteringblue

Nigglesquiggle wrote: »

Thanks for the advice January2015. Hopefully just paying the token payments will give us a bit of breathing space to build up a bit of an emergency fund.
Do you suggest we should go it alone with creditors from now on?
Many thanks

Absolutely Nigglesquiggle go it very much alone.

As long as you keep your creditors informed they are very unlikely to take any further action against you. For Stepchange to suggest bankrupcy is where it is all wrong, that is not in your best interest. You will lose you home.

Just follow the NEDCAB process and if your financial statement says you have no money to pay debts then you have no money to pay debts, do not even give it a second thought.

https://nedcab.cabmoney.org.uk/dmp.asp

Then do the same process every 3 months and let them know again. Even if this lasts a year it lasts a year. You showing your creditors that you can't pay them will stop any action. It will be much further down the line before they even think of doing anything.

It's people that hide and do not keep in contact that the action will be taken on.

Seriously don't sell the house to pay unsecured debts, and do not even slightly worry about it. I learned this a long long time ago.

Mrs BB has had to stop work because of ill health and I've stopped all payments for 4 months possibly longer and none of them have even batted an eyelid and we still owe 30k.

somuchindebt

Hello, I watched programme on tv yesterday. It was called if you can't pay we will take it away, or something like this. Didn't watch it to the end, and I must say it got me very stressed! I really don't understand this world of debt.
We get told that we can only pay as much we can pay. My creditors have been very good to me so far accepting token payments or no payments for awhile and accepting really low payments at the moment. I don't understand how come these court enforcement officers come to peoples houses and businesses and take everything. Why? There was one couple that had some cars, two houses. They were taking away all the cars and doing charging order on both houses. They did not care if this family needed a car or home to live in. So why is it like this? Does it all change once there was a court case? On the other hand my husband had won a case against a company that clamped his car in a car park, this was years ago. The company later sold or destroyed the car, he won the money back plus interest. Bailiffs got to the person and got beaten up and that's it. My husband never got his money back. The company does not trade anymore now...
Sorry if this is the wrong place to post, but I really would like to understand all this. So on one side there are these officers ruthlessly taking stuff away and then there are people like us paying what we can pay and not paying when we can't. There are even people that manage to save for F&F settlements. They transfer money to Step Change, the charity negotiates with creditors and if creditors do not accept, then the money gets transferred back to the debtor! I am not against it obviously as I am hoping to negotiate partial settlements as full settlements but it's all beyond my comprehension.... I suppose I would like to understand it more, as I have the sum in the bank to offer them, but I want to wait little bit till I am in better position, ie, creditors are more likely to settle for less, plus I am on maternity, haven't got the childcare sorted, marriage is on hold (we separated), so I need to make sure I can definitely part with money I have from the house sale. I was warned that creditors may sniff and find out about house sale and potential money available, I understand that they won't know how much I have after they take me to court though...
Your thoughts are much appreciated.