Huge amounts of debt, advice on DMP needed

January2015

The_Debt_Expert wrote: »

SC are completely impartial and don't do things 'for the benefit of creditors', as don't other free services. I know from working with creditors that they're more likely to accept a plan through a debt advice service like SC/payplan/NDL etc than they are a self-managed plan, because history shows people are more likely to stick to it. Hence, all these organisations work for the benefit of debtors. To suggest otherwise is odd.

As someone who started their DMP with StepChange, I can say they were brilliant, but forcing defaults by paying ony token payments was a no-go with them. I had to switch to self-managed and drop to £1 monthly payments to achieve defaults on all my debts. For someone on a DMP this is important because the clock starts ticking on clearing credit reference files. With late payment markers it just keeps recording those late payments and can therefore affect credit files for up to 12 years. If credit companies would be realistic and admit the relationship has broken down and issue defaults in a reasonable amount of time then working with the likes of StepChange would be fine.

The_Debt_Expert

That's very odd, because creditors should default your accounts once usually around 3 months of arrears are outstanding. Payments shouldn't need to be down to £1 to 'achieve' defaults. I'll do some digging on this.

sourcrates

The_Debt_Expert wrote: »

That's very odd, because creditors should default your accounts once usually around 3 months of arrears are outstanding. Payments shouldn't need to be down to £1 to 'achieve' defaults. I'll do some digging on this.

With the greatest respect, you seem to be basing all your advice as dictated by the lending code, and what creditors "should do" when in reality, a lot of creditors do there own thing, until forced to tow the line.

In my experience, what creditors and debt collectors are "supposed to do" differs greatly from what they actually do !!

CP2016

The_Debt_Expert wrote: »

That's very odd, because creditors should default your accounts once usually around 3 months of arrears are outstanding. Payments shouldn't need to be down to £1 to 'achieve' defaults. I'll do some digging on this.

There are masses of posts on these forums about this. My own experience is that I first fell into arrears in January 2012, the earliest defaults were March 2012 and the last of the early ones was January 2013. Next didn't default me until September this year despite being on a DMP since 2012. They have agreed to backdate it but really, there's no logic or consistency to the default process that I can see.

January2015

The_Debt_Expert wrote: »

That's very odd, because creditors should default your accounts once usually around 3 months of arrears are outstanding. Payments shouldn't need to be down to £1 to 'achieve' defaults. I'll do some digging on this.

Tell that to Barclaycard. Even after 6 months of £1 payments they were still not prepared to default. It took 8 months for them to write and say they would default and then only 12 months after £1 payments started have they defaulted. This on two accounts.

For 12 months prior to token payments they had been getting DMP calculated payments which were much less than the contractual payments. Despite writing to them, quoting the lending code and pointing out the relationship had clearly broken down due to our financial situation, and evidencing it was not going to improve before we retire, BC would not budge. Only way to make them play ball was either token £1, or no payments at all. They are the worst, but definitely not the only creditor to do this. Self managed was the only way we resolved this problem. StepChange were not prepared to help us.

glentoran99

The_Debt_Expert wrote: »

That's very odd, because creditors should default your accounts once usually around 3 months of arrears are outstanding. Payments shouldn't need to be down to £1 to 'achieve' defaults. I'll do some digging on this.

With the greatest of respect I think you should change your forum name

Ilona

glentoran99 wrote: »

With the greatest of respect I think you should change your forum name

I think if anyone can claim the title of Debt Expert, it has to be sourcrates. Look how many posts he has made in seven years on the forum. A lot more than 25 in one month.

Ilona

Keezing

So I completed all of the NEDCAB forms and sent off my holding letters today, by recorded delivery!

I'm still not sure whether to pay them a token amount for the first few months or pay them nothing at all. Part of me wants to copy January2015 and pay the token payments, as we had a similar debt size and no CCJs have been taken out on her yet!

sourcrates

Keezing wrote: »

So I completed all of the NEDCAB forms and sent off my holding letters today, by recorded delivery!

I'm still not sure whether to pay them a token amount for the first few months or pay them nothing at all. Part of me wants to copy January2015 and pay the token payments, as we had a similar debt size and no CCJs have been taken out on her yet!

Seriously, go with her advice.

You will only get legal action once a debt gets sold on to a specialist debt purchaser such as Lowell or Cabot, you are a million miles away from that point.

Original creditors very rarely take legal action themselves.

The usual course of events is to either pass the account to a debt collector to manage on there behalf, or sell the debt and wash there hands of it.

January2015

Keezing wrote: »

So I completed all of the NEDCAB forms and sent off my holding letters today, by recorded delivery!

I'm still not sure whether to pay them a token amount for the first few months or pay them nothing at all. Part of me wants to copy January2015 and pay the token payments, as we had a similar debt size and no CCJs have been taken out on her yet!

If I had my time again, I would make no payments until accounts defaulted and passed to debt collection agencies. Banks/credit card companies will not take out CCJs against you. They will sell debts on to DCAs and it is they who would do that - but only after trying to contact you and make arrangements to pay. You have months before anything approaching CCJs will even be considered.