DMP Mutual Support Thread - Part 12

Suseka97

vaper wrote: »

Hi folks.....stepchange said we could afford £500 per month to pay towards the debts so when I do start sending them payments, do I divide the amount up between the creditors eg £500 between 9 creditors = £55 each or do I need to pay more to the ones with the biggest balances? Vaper

If you check out the NEDCAB site it has a DMP calculation that suggests you divide each creditors individual balance by the total debt balance x the £ amount of money available to apportion.

So for example if you have £500 available each month and you owe creditor (a) £1000 and a total of £10,000 - you would divide £1,000 by £10,000 multiplied by £500 and the payment to (a) would be £50 per month. If you owed creditor (b) £2,500 - you would divide £2,500 by £10,000 multiplied by £500 and it would equal £125 per month.

With that said it's completely up to you how you wish to divide your monthly payments up. You might want to focus on the smaller debts and clear them off first, paying the others much smaller / or token payments.

StopIt

acee wrote: »

Hi
Sadly I'm the latest victim - similar story to must been robbing Peter to pay Paul for around 2 years then Peter didn't have a pot to pee in so set up a DMP with stepchange I have £15k debt with 10 creditors ranging form 3k to £300 per creditor it will take around 18 months to pay starting 1st August.
Most creditors have been fine Satsuma Likley Loans & Halifax overdraft all stopped interest immediately, Lending Stream passed the debt on and the amount reduced from £1600 to £922 so I'm happy with that. None of the rest have sent any letters confirming they have accepted my repayment plan offer but not too concerned although I would like to know my final balance so I know how much each creditor is expecting.
Halifax sent me a letter with the temporary limit amount reducing by the agreed sum each month for 6 months then the 7th month the temporary limit amount is Zero - does this mean my account will then be cleared or they have only accepted the payment plan for 6 months? The letter is not clear at all and would be really handy if they wiped the remaining debt but I think its too good to be true.
Thanks

Welcome to the MSE forums.


A few questions regarding your DMP


1: Have you saved an emergency fund? You're going to be pretty much unable to get credit for the duration of the DMP so it is essential that you have money for the "Car/Cooker/Cat blowing up fund"


2: If the answer to 1 is no, get in touch with Stepchange and explain that if you started your DMP immediately you'll be vulnerable to shocks and need to build a money buffer as you wont have access to credit if funds were needed. Token payments during this time are optional, but sometimes appreciated by creditors.


3: Most creditors stop interest but some don't until you're defaulted. To this end, using the period of time paying token payments usually speeds up this process.


4: Halifax look like they've put the account on a Arrangement to Pay scenario. At the end of the 6 months, they'll be putting interest back on, if the letter is what I think it is. It may be worth telling them that you're on a long term DMP and will not be resuming payments at the contracted rate at the end of this 6 month period so to drop this arrangement and go straight to either defaulting the account or the usual DMP procedure.


Hopefully the rest of the creditors will be in touch to acknowledge your DMP and will let you know where you stand. Good luck. Feel free to make your own thread with an SOA if you want any specific DFW based advice.

Mr_Yellow

So with my first DMP payment due to be taken on 1 August, I have had an email from Step Change this morning to say that Virgin Money (my biggest single debt) have rejected the offer from Step Change.

Has anyone else had a similar issue with Virgin Money before? I've not made a payment to Virgin since May, and I've had a couple of letters from they saying I need to pay £230 to clear the arrears on the account. Am I right in thinking that if Virgin have rejected the offer they will pretty quickly default the account and pass the debt onto a different debt collection company?

I assume this is nothing to worry about?

StopIt

Mr_Yellow wrote: »

So with my first DMP payment due to be taken on 1 August, I have had an email from Step Change this morning to say that Virgin Money (my biggest single debt) have rejected the offer from Step Change.

Has anyone else had a similar issue with Virgin Money before? I've not made a payment to Virgin since May, and I've had a couple of letters from they saying I need to pay £230 to clear the arrears on the account. Am I right in thinking that if Virgin have rejected the offer they will pretty quickly default the account and pass the debt onto a different debt collection company?

I assume this is nothing to worry about?

It is indeed nothing to worry about.


It just means they don't want to play ball. Fine, let them sell the debt on and find someone who will accept the payment offer instead. Other creditors say they accept the payments, yet sell the debt on anyway so the end result is the same, just the official procedure they use is different.

Mr_Yellow

StopIt wrote: »

It is indeed nothing to worry about.


It just means they don't want to play ball. Fine, let them sell the debt on and find someone who will accept the payment offer instead. Other creditors say they accept the payments, yet sell the debt on anyway so the end result is the same, just the official procedure they use is different.

Great, thanks for confirmation. Since setting up the DMP, Virgin are the ones who have contacted me the most, I seem to get a letter or a statement from them every other day! Be good if they do sell the debt quickly, and then leave me alone!!

acee

Stopit thanks for your reply I really appreciate it.


1: Have you saved an emergency fund? You're going to be pretty much unable to get credit for the duration of the DMP so it is essential that you have money for the "Car/Cooker/Cat blowing up fund"
No luckily I live back with parents so basically all my wage is going on paying my debts anything that pops up they will be happy to help (they don't know I'm on a DMP) too embarrassed to ask for help. My life is on hold for around 18 months until debts are clear but will be worth it in the long run just have to stay strong maybe get a 2nd job.

2: If the answer to 1 is no, get in touch with Stepchange and explain that if you started your DMP immediately you'll be vulnerable to shocks and need to build a money buffer as you wont have access to credit if funds were needed. Token payments during this time are optional, but sometimes appreciated by creditors.
As above and want to get debts paid off asap - any emergency I'm sure my parents can help aslong as its not ridiculous amounts.

3: Most creditors stop interest but some don't until you're defaulted. To this end, using the period of time paying token payments usually speeds up this process.
I'm hoping they all do just wish I acted earlier instead of trying to do it all myself.

4: Halifax look like they've put the account on a Arrangement to Pay scenario. At the end of the 6 months, they'll be putting interest back on, if the letter is what I think it is. It may be worth telling them that you're on a long term DMP and will not be resuming payments at the contracted rate at the end of this 6 month period so to drop this arrangement and go straight to either defaulting the account or the usual DMP procedure.
The letter states if I repay my overdraft and my account is back in order they can reapply the fees so still not sure what the letter means does it mean at the end of 6 months or when the overdraft is back to zero - I will ring them direct on Friday to confirm.

I've also contacted all creditors asking for all correspondence to be via email only and to take my home number and work number off their database. They have all been great so far and have said they will do this and only post to my home address if they legally have to.
Have to say I'm impressed with the creditors so far I thought they would have hounded me and been difficult to deal with afterall I've got their money, fingers crossed it continues.

Rebeccadougherty

Hi again all

Just had a letter from Aqua saying they haven't received the amount for my agreement this month and mentions about a default. The thing is this is the payment I lowered that I've already agreed with everyone I did speak with all the creditors on the phone about this reduction although I haven't told them I plan on two more lesser payments.. I was also planning on keeping the next two payments less to build up my emergency fund as I've mentioned before but I was advised on here not to tell the creditors as I'm scared about it and also someone said they didn't tell their creditors for a few months and nothing happened. Step change already know I'm lowering two more payments but if I'm gonna be threatened can I really even do it? I don't want the agreement to be cancelled and charges applied like the letter says please please help really panicking about it

sourcrates

Rebeccadougherty wrote: »

Hi again all

Just had a letter from Aqua saying they haven't received the amount for my agreement this month and mentions about a default. The thing is this is the payment I lowered that I've already agreed with everyone I did speak with all the creditors on the phone about this reduction although I haven't told them I plan on two more lesser payments.. I was also planning on keeping the next two payments less to build up my emergency fund as I've mentioned before but I was advised on here not to tell the creditors as I'm scared about it and also someone said they didn't tell their creditors for a few months and nothing happened. Step change already know I'm lowering two more payments but if I'm gonna be threatened can I really even do it? I don't want the agreement to be cancelled and charges applied like the letter says please please help really panicking about it

Rebeca,

Simple letter to them explaining about the reduced payments and telling them to update there records, is all you need to do.

Stop panicking, stop been scared, deal with them in a business like manner.

You want defaults anyway, it's just another standard computer generated letter, please stop panicking at every letter you get.

Rebeccadougherty

Hi sourcrates and thank you

Should I explain about this months lesser payment or this month and my planned two more months or should I write to everyone and say two more months payment will be less than they should be? I don't need this stress what with my work and family issues there is so much pressure. I get that I want the default but I don't want charges added again and the agreement being cancelled. Just feel utterly hopeless atm. Also I don't even have access to a printer atm. Meh. And what reason do I give? I can't *say* it's for an emergency fund. The woman at stepchange told me it isn't allowed?

sourcrates

Rebecca I think you should just stop everything and take a deep breath.

This is turning into an emotional rollercoaster for you, taking every letter to heart, You would be better served cancelling the agreements completely, walking away for 6 months, wait until all your acrounts have defaulted and been sold on, then starting again without the worry of charges or interest.

You are been dictated to by your creditors, instead of you dictating to them.

You really need to take control of this and not be put off by the simplest computer generated letter.

You do not have to justify anything to anyone, and what stepchange say should not always be treated as gospel.