DMP Mutual Support Thread - Part 12

Rebeccadougherty

Thank you but I don't think I can just do that? Nobody is explaining how to do things, stepchange are proving to not be as helpful as I thought. How do I just cancel it? Everyday loans would almost certainly not allow this -they are awful. I am trying to take control by doing this DMP but not everyone find it's as easy as you seem to. Debt is a serious thing of course I'm going to take it slightly to heart.

sourcrates

Ok, I am trying to help you, honestly, but in order to do that, you need to re-think how you deal with these people, that involves doing things you may think go against the grain so to speak.

Stepchange, and most of the other debt charities, are funded by the banks, they make no secret of this fact, so there entire focus is on getting you repaying your debts as soon as possible, and as you have found out, that can leave you with not much emergency cash, so, in order to redress the balance, we always advise on here that it's better to save up a little bit first, before starting any repayment program.

Usually people just write to each creditor, telling them they are taking debt advice, and to suspend collection activity until you have figured out a way forward, you can do this for as long as you need to, 6 months, 8 months, a year, as long as you need to establish the best way forward, and to save an emergency fund.

During this time, you may get letters and calls, but you can tell them to contact you in writing only, debt collection can take a very long time, yes they may keep adding interest etc, but you need to think long term, after a debt defaults, the balance is frozen, no further interest or charges can be added, that is the ideal time to start your DMP.

You see it's always better for you if the creditor sells the debt on, as the new owner, will nearly always accept a partial offer, and you can usually make payments for this monthly, so this balances out any extra interest you may of accrued by delaying payment originally.

Nothing will happen by taking these measures, original creditors almost never take legal action, they simply sell the debt on and wash there hands of it, all these letters and calls are 99.9% bluff in order to get you to pay them, it's all hot air, a creditor has no more power or discretion than you do, to use the courts, there is nothing to be afraid of here, you just need to think outside the box and you will realise the creditors are all like toothless tigers really.

Suseka97

Rebeccadougherty wrote: »

Thank you but I don't think I can just do that? Nobody is explaining how to do things, stepchange are proving to not be as helpful as I thought. How do I just cancel it? Everyday loans would almost certainly not allow this -they are awful. I am trying to take control by doing this DMP but not everyone find it's as easy as you seem to. Debt is a serious thing of course I'm going to take it slightly to heart.

Hi Rebecca.

Sorry, but I do think a few on here have been trying to help you with this, but it's clear from your posts that this is still all getting on top of you and you are not in control of the situation as yet. Sourcrates has given some very good advice and trust me, none of us take our debt lightly - even if some of our posts and responses might suggest so. It's just some, like me, are several years into their DMP journey - have been where you are now, and have come out the other end much the wiser.

Above all you absolutely must view the DMP as yours and whilst organisations such as StepChange can really help folks get on top of their debt problems, ultimately its for you to decide and dictate its terms. You can cancel the DMP at this point by simply telling SC that you are not yet ready to continue - nothing bad will happen if you do. You can use their messaging service if you don't want to speak with them, or send them a letter and if you've already set up your SC direct debit, just cancel it.

You can then write to all your creditors telling them that your financial situation has worsened (no need to explain why - or if you really feel you must, make something up) and say that you'll be back in touch in x months at which point you will let them know how much you can afford to service the debt. If, by then, they've sold your debt on to a DCA - then great, if not, then follow through with your offer of payment. You can also send token payments if that makes you feel better.

Yes, you may get charges and interest applied in the meantime - but there's no guarantee it'll stop when you enter a DMP anyway. Halifax charged interest for over a year into our DMP and Barclaycard (x 2 accounts) stopped interest, then started charging again because the apportioned payments (made by SC) took us over their standard minimum payments at one point and SC would not lower their payment. In both cases interest only ceased when they sold the debt on to a DCA.

Just try to remove the emotion from the situation which of course is easy to say - but it's essential for your health and well-being. I was a mess at the start of my DMP, fearful of every letter that dropped on my doormat and every time the phone rang. But I started my DMP before I found this forum and so really did fear the worse, believing all the threats the letters spelled out to me. Had I found this forum beforehand the start of my DMP journey would have been very different. Anyway here I am, 4+ years on starting with 14 creditors and £85k worth of debt and honestly nothing bad has happened. No knocks on the door, no court action - nothing beyond letters threatening x and y -that's it.

You can do this, you really can

vaper

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

Hi Rebecca,
I just want to add to what Sourcrates and Suseka have already said, they have given you sound advice. I understand you are struggling with the idea of being on a DMP at the moment, you're scared something bad will happen.
You have done all the right things by contacting your creditors and setting up a plan with step change.
If it makes you feel any easier, I stopped all my payments at the end of May, I was going to use stepchange but since decided to go self managed, since that date I have not paid one penny to my creditors but I guarantee that the letters you are receiving will be identical to mine, I have also been bombarded by text messages and telephone calls.
It has taken me a while but I think I am now with the program, I am going to hold out for the defaults, I was worried by this at first but not so much now, after all, what's the worst thing in the world that can happen? (they can't kill me or make me pregnant) :rotfl::rotfl::rotfl:.
Please remember as Suseka has said, stepchange cannot guarantee that interest will be stopped, so it makes no difference at this stage.
Please try to calm down and put all your money into an emergency savings pot it will help with the anxieties when you see how much cash you are saving to put towards your debts. (We Were paying over £1.500 per month between us, God knows how) but our monthly repayments are now being stashed away ready to make F&F payments........eventually.
Please keep posting though if you need more reassurance, there will be someone here to offer support, and do try to read through some of the old threads it's what I do to try and get some understanding of how other people managed, although I tend to forget most of what I read as this forum is enormous .
Take care and relax

alyxzandra

Rebeccadougherty wrote: »

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?

When I first started my DMP with Stepchange, I made token £1 payments to all of them for several months to build up an emergency fund. You can just tell Stepchange you need to sort out your car, etc. and need to use that money for it. And then later on make your payments. I've had to lower my payments, skip payments, etc due to emergencies. Now, I self manage my own DMP and it is working out very well. I keep my payments fairly low, but have managed to do F and F settlements to pay off my creditors. And I now pick them off one by one.

It is daunting, but you just follow the advice that is on here.

Leanneglos1

Can I ask how people approached F&F payments, how long did you leave before offering these, did you make token payments or more to them prior? What percentage of outstanding balance did you typically offer and was it to the DCA if debt is with them or creditor if still with creditor?

StopIt

Rebeccadougherty wrote: »

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?

I know this is very hard for you, and I do understand that this probably looks all too scary and you would rather hide away. However, at the end of the day, so long as you stay in control, and know the processes behind debt collection, nothing bad will happen.


It's when you let the creditors have their own way that the courts become the weapon of choice because nowadays, good faith communication usually prevails, and only if you ignore them will many creditors go the legal route.


All the letters you'll get saying "action will be taken if you don't pay your arrears" etc will be standard letters that can be filed under B. Read the thread and you'll get a good indication of what letters can be binned and what need action taken.


Stepchange are good, but remember they are paid by the banking industry. It's their interests to get you to pay, although they do provide counselling and support also. To that end, they'll frown upon measures like token payments etc sometimes, but a DMP is an informal tool. There's no penalty for "failing", nothing stopping you from doing it yourself and nothing stopping you going back to Stepchange or another free provider once you save an emergency fund in the rare case that they stop the DMP. You tell them that you cannot afford anything other than token payments for the period of time you need. No reasoning is required and is none of their business. Stepchange, like your creditors can take it or leave it. Generally, they take it, despite what some advisors may say.


Entering a DMP does not make interest and charges stop. That's down to each creditor to react accordingly to you entering it. Sometimes they do, sometimes they keep charging interest through the entire DMP and needs fighting to stop. This ironically is more common when people go straight from "normal" payments to a DMP so it isn't in your best interest at times to jump straight into a DMP in any case.


Keep doing what you're doing. You WILL need an emergency fund, that is without question. Stepchange at the end of the day will not stop you from saving one up, and even, even if they did, go self managed. The end results are nigh on identical.


Your end game is debt freedom, and you'll get there.

henrryyyy

I've still got a couple of cards that are charging interest, one loan that is charging interest, so I made the decision to drop step change and make token payments to get defaulted in hope of interest stopping.
The loan that is charging interest is from a peer-to-peer site, so im not quite sure how that will work, it feels kind of immoral to stop paying them a fair chunk as they are people investing rather than a company(saying that its 24% interest, and I think investors get 3-6%)

I also have a friend thats offered to clear one of my loans with bamboo, outstanding is 4kish, but settlement figure is 2.3kish if i paid last month. I might write to them making a smaller final offer as the original loan was 2k and im pretty sure i've already paid 1k off. Again im guessing dropping to token payments may help in this? or they might just see through it.
Also my friend would want paying £250 a month for 10 months. My stepchange payments were around 550, so this would obviously drop my budget to 300(plus the 60 odd going to bamboo)
are lenders likely to question the drop in budget?

I've written letters to creditors(but not sent yet) saying due to personal circumstances my DMP with sc didnt work out, I am making token payments for the coming months to put myself in a better position to offer and maintain a repayment plan(surely I cant say in the hope that you default me?) and asking for details on setting up a standing order with them.

I dont know if I've misinterpretted stuff i've read on here, but thats where I'm at right now

I know the advice is generally dont borrow from friends. This guy got me out of a pickle with a pdl(before I realised you can negotiate with them repayments etc) for £800 and i'm due to finish paying that off next week. so there is a form of trust there and I know in myself I would never doublecross him.

motivated

Hi Rebecca
Another DMP member here. Back in January I was a mess, worrying about my mountain of debt ( I mean a mountain too). Worrying we were going to divorce over it all and not knowing where to turn. Lots of genuine support and advice on here and I grew a pair and decided to go to SC for help. I truly believed that the bailiffs were coming, I would be hauled up in court, debt collectors would harass me, some big hairy heavy bloke would appear at my door demanding money. You name it I thought it. Anyway, I paid 2 months of payments to SC and then decided to go self managed. I used the NEDCAB site and generated all letters etc from there. I told creditors what I will be doing from now on I didn't ask permission and since May I have paid the grand total of £6.00 to 6 them. They have so far been absolutely fine. I am still here, not seen or heard from any bailiffs or heavies. I plan to continue this until I get sold on and defaulted. I am calm and taking each day as it comes. I have had some letters from creditors but soon realised that these are standard letters that creditors have to go through certain procedures as part of the course. Listen to the advice on here and take every day as it comes. You will be OK.

I only wish I had done it sooner instead of trying to dig my way out of an impossible hole.

Sourcrates( should be knighted) and others steered me in the right direction and will you too.
Good luck

vaper

Hi M, nice to see you posting.
Totally agree with the part about Sourcrates, he is a great asset to the forum.