Use a DMP for bank overdraft?

mon2016

I have a £2000 overdraft from Santander, I had written a letter to them asking to allow me another year to pay it off but I received a letter from them today and they said my account will be reviewed on 1st September and it most likely will be cancelled. They said to call the collections number to discuss a monthly payment arrangement.

I am unemployed and have only £20 or £30 left over per month after paying other creditors so I would doubt they would accept such a low amount.

Would it be better to set up a DMP with stepchange for this overdraft or just wait until they sell it to a DCA?

sourcrates

Hi,

No you can't set up a DMP for just one debt/creditor, it's a waste of time, wait a year, 18 months, see who buys it, your circumstance may of improved by then, agree a payment arrangement with the DCA that buys it.

mon2016

sourcrates wrote: »

Hi,

No you can't set up a DMP for just one debt/creditor, it's a waste of time, wait a year, 18 months, see who buys it, your circumstance may of improved by then, agree a payment arrangement with the DCA that buys it.

Though I have a Quick Quid loan of £300 that I was going to set up a DMP for, would a DMP for 2 creditors still be a waste of time?

I have 4 payday loan debts but I was able to set up 6th month repayment plans with 3 of them outside of a DMP.

Does it really take a year for someone to buy a debt? I have never been in this situation before

sourcrates

if your going to set up a DMP then its recommended you include all your debts, as you have to have a properly formulated budget.


Each creditor then gets a pro-rata payment each month, that's pretty much how it works, most providers will insist on all your debts been included.


I thought from your 1st post the OD was your only debt.


As you are unemployed, you should not be paying anything, you should write to each creditor and tell them your not working, and you will review the situation in 6 months time.


A Debt Relief Order may well work for you, do some research on "DRO".


Yes the debt collection process does not work quickly, they send streams of letters and phone calls over a period of up to 2/3 years some times.

Powered_By_Pies

Hi mon2016, if you have multiple creditors (even ones where repayment agreements have been made) then look to contact someone like StepChange to discuss your options. You may find a DMP works best as it will roll the debts into one monthly payment to SC who then divide that equally to all of the creditors.

I dont know which payday lenders you use but they are used to DMP's (let's face it half of the time they cause DMP's to happen) so they will usually go along with it. They'd rather a little of something than a whole lot of nothing.

The bank may try and stick a spanner in it but if you go through someone like SC then eventually the bank will realise they have to accept it regardless. It's a process a lot of people go through and you won't be targeted by them as a 'unique case' they think they can bully into payong what they want.

Debt is not a crime and through a managed DMP you can get everything rolled into one, on an affordable monthly payment and the creditors will eventually accept it as it shows you're willing to face up to paying back what is owed.

Good luck!

National_Debtline

Hi Mon2016,


If you want a DMP then you are right to look at Step Change as they do DMP's for free, and you should never pay a fee for this service. What you should try and calculate when weighing up your options is how long a DMP would take to clear your debts if nothing changes. So if you owed approx. £2500 and can only afford £20-£30per month this could take 7 - 10 years to repay if all of the interest and charges were frozen. (To work this out you should divide your total debt level by the monthly payment to tell you the number of months and then divide by 12 to get the number of years).

You may return to work during this time and increase the payments, which will reduce the time it takes to clear the debts but because that is uncertain, and you can only really look at your situation as it is at the moment, it also means that a DRO may be another option. A DRO is a way to get debts written off for people who owe less than £20,000, have less than £50per month to pay to your debts and have less than £1000 worth of assets (plus you can have a car worth up to £1000). We have a factsheet about Debt Relief Orders that you may want to read, good luck


Laura
@natdebtline