DMP Mutual Support Thread - Part 12

SpagBol

StopIt wrote: »

As a DMP is meant to be paid on a Pro-Rata basis, you don't ask if a creditor is going to accept it, you tell them what you're paying them.


So set up everything as you have calculated. Pay every creditor at the same time, whether they have "accepted" this or not. Some creditors have a policy of rejecting everything and defaulting, but will take the payments anyway and manage the debts until sold.


Are these debts all with original creditors? if so, pay the payments as calculated, and they'll likely sell the debts on in due course.


Most DCAs do not reject DMP payment plans nowadays, so you pay the DMP payments until the debts are sold, tell the DCA of your situation and they'll happily take the payments instead.


Also: Have you set up an emergency fund? If not, pay nobody until you have a level that you're happy with, as you wont be able to borrow if the cooker/car/cat blows up.


Good luck! (maybe update your signature?)

Thanks StopIt!

We don't have much of an emergency fund, no, but husband should get a one off bonus (about £1k) at Christmas which we usually sling in the black hole but will put aside for this reason. I will set up the standing orders to start in December, whether we have the acceptance letters or not.

I had my first acceptance letter today! :j

I will also update my signature (so sad looking at how it's gone up again!)

dynomot

Ostrich_no_more wrote: »

Thanks
One question I have is around an overdraft.
All of my other debts are credit cards and are on my name only. My only joint liability is my current account which I share with my wife.
When talking to StepChange they recommend that I include the overdraft, which is £2000 and costs me £20 per month fees, in my list of unsecured debts.
My query though, if I state I can no longer afford this overdraft debt, will Santander pursue my wife for the money.
This would be a nightmare situation for me as I do not want to drag her into my financial predictament, potentially harming her credit score .

Hi, and congratulations on "fessing up" and doing something about your debt. This is the biggest step and now you have I'm sure you actually feel much better about your financial situation. I have to say that before my "light bulb" moment I had never ever missed a payment to anyone anywhere either - I had borrowed from one to pay another until it became impossible, hence my own situation.

Your predicament was almost exactly my predicament too. All my debts were my own except the one overdraft in my wife and mine's joint account (HSBC). StepChange also told me it should be included in my DMP.

The account in question has had all it's direct debits switched (my wife and I used to dump our halves of the bill money into it, she her half once a month me a 1/4 every week), we now have a different joint account and do the same. The HSBC have just written to us both saying the account will be unusable after April next year the interest and fees were frozen by them for 60 days back in September. My wife was paying an extra £20 above and beyond the fees/interest every month, and continues to do so while my DMP pays a smaller amount into it. My wife did ask in branch if her credit rating would be affected - apparently not, and so far that is the case. She is satisfied with this, although I would like that in writing. HSBC have said that our mortgage (joint) with them, and always paid on time every month and not part of my DMP continues unaffected.

jcorbygas

Sourcrates -is there a link to a template letter that can be sent to creditors where they are unable to supply a CCA and you want to write to tell them that you will not be making any payments as the debt is unenforceable (as per your reply above).
Thanks

StopIt

jcorbygas wrote: »

Sourcrates -is there a link to a template letter that can be sent to creditors where they are unable to supply a CCA and you want to write to tell them that you will not be making any payments as the debt is unenforceable (as per your reply above).
Thanks

https://www.stepchange.org/debt-info/dealing-with-debt-problems/sample-letters.aspx


Under the How do I tell a lender a debt isn’t enforceable because they've not provided the information requested? header.

motivated

Evening DFWs

Today I received 2 letters regarding 2 accounts from MBNA both have the words ‘default has been registered’ :T

Another hurdle we have jumped so we are now at the point of plodding along nicely. All 4 CCs defaulted and our 2 huge loans are with Wescot with a monthly payment plan in place with them. 1st payment gone today :T

We are still self managing and am glad that I held my nerve and carried on with it. I had a huge wobble a while back and nearly went back to SC (who, just to add are amazing) the payments were too high with them though. By self managing we have payments in place that are more affordable and the stress and worry is a distant memory.

Will be saving hard now for F&Fs and wanted to repeat what I have said a million times on here. Thank you to all who steered me in the right direction and told me it would be ok. You were spot on with the advice :A

Fingers crossed all stays ok and if we get any hiccups along the way I know I will be strong enough to deal with it.

Still a long way to go, I’m in it for the long haul but you have to be in it to win it
M

Newstartnov17

Hi there

This is my first post on the money saving forum.

Today was a big day for me today as i finally decided that enough is enough and I called Step Change.

My wife and I have accrued an obscene amount of debt (£87k in total) split over 5 personal loans (37k in mr and 50k in mrs) the main reason behind this debt was a very poor investment decision on a 2nd property - it went horribly wrong!

For the last 6 months we have been refinancing with different providers trying to get the best interest rate and term and have got into such a mess that we are now left with a overall loan amount of £1450 per month split over 5 loans over 7 years per loan! My income is £2950 and My wife's is £500 as on maternity leave!

Anyway to cut a long story short with our mortgage and other outgoings we cannot afford to pay our monthly loan payments so upon calling SC I was advised that a DMP would be our best option.

My questions are:

As we have taken out 3 of the 5 loans within the last month will this effect the decision on the whether the creditor(s) will accept our DMP? My thoughts are they will look to pursue us through a court as we have effectively knowingly taken out loans knowing it is likely we will struggle to meet the monthly payments.
I.e. fraud?

2nd question is when we are completing our budget are we allowed to factor in things like, lifestyle expenses such as gym membership or a magazine subscription. Will the creditors expect us to cancel anything which would involve "unnecessary expenditure"?

Thank you very much in advance.

James

StopIt

Newstartnov17 wrote: »

Hi there

This is my first post on the money saving forum.

Today was a big day for me today as i finally decided that enough is enough and I called Step Change.

My wife and I have accrued an obscene amount of debt (£87k in total) split over 5 personal loans (37k in mr and 50k in mrs) the main reason behind this debt was a very poor investment decision on a 2nd property - it went horribly wrong!

For the last 6 months we have been refinancing with different providers trying to get the best interest rate and term and have got into such a mess that we are now left with a overall loan amount of £1450 per month split over 5 loans over 7 years per loan! My income is £2950 and My wife's is £500 as on maternity leave!

Anyway to cut a long story short with our mortgage and other outgoings we cannot afford to pay our monthly loan payments so upon calling SC I was advised that a DMP would be our best option.

My questions are:

As we have taken out 3 of the 5 loans within the last month will this effect the decision on the whether the creditor(s) will accept our DMP? My thoughts are they will look to pursue us through a court as we have effectively knowingly taken out loans knowing it is likely we will struggle to meet the monthly payments.
I.e. fraud?

2nd question is when we are completing our budget are we allowed to factor in things like, lifestyle expenses such as gym membership or a magazine subscription. Will the creditors expect us to cancel anything which would involve "unnecessary expenditure"?

Thank you very much in advance.

James

A DMP is an informal agreement.


If the loan companies do not accept the DMP payments, they'll sell the debts onto someone who will. The penalty for taking loans out that you cannot afford isn't criminal court action for fraud, but your credit files being destroyed and losing the ability to do that again, at least for another 6 years.

Also, the likelihood of CCJs (which are civil, not criminal matters) in a managed DMP is minimal.

As for the I&E, you offer the creditors what you can manage, in conjunction with Stepchange, and you have control of your budgets accordingly. You will have to send your I&E to Stepchange and if they advise overspending, you can manage accordingly but there's no hard and fast rules, and you can self manage if you wish.


Read the debt help guide in my signature, and read this thread for how people have managed with a DMP, but with SC and Self Managed.

Leanneglos1

Advice needed please.... I have received today a default notice agreement from one of my lenders who I have a personal loan with, they have stated the usual default information but have also stated that I need to call them to discuss my account as the next form of action will be to apply for a CCJ to be entered against my name, I’m aware of the new legilisation in the sense they have to give me more warning etc but what are your thoughts?? Do you think this confirms the company will most likely register a CCJ against me and If so by my calling them what would that achieve, I’m in a DMP with step change and first payment went out in Nov, thanks in advance for your help

StopIt

Leanneglos1 wrote: »

Advice needed please.... I have received today a default notice agreement from one of my lenders who I have a personal loan with, they have stated the usual default information but have also stated that I need to call them to discuss my account as the next form of action will be to apply for a CCJ to be entered against my name, I’m aware of the new legilisation in the sense they have to give me more warning etc but what are your thoughts?? Do you think this confirms the company will most likely register a CCJ against me and If so by my calling them what would that achieve, I’m in a DMP with step change and first payment went out in Nov, thanks in advance for your help

Did they say that they may, or they will?


If the word may is used, it's a standard default notice and can be filed under B as the debt will be sold to a DCA who you can deal with accordingly.


If the creditor is actually going to seek a CCJ, they will need to send a Letter of Claim first, giving you the chance to set up a payment plan first, so don't fret about threatening letters.


Feel free to upload the redacted (to ensure privacy, omit all personal details) letter here if you want full clarity on this.


Do not call them under any circumstance. If you need to reply with a payment plan based on the letter itself to avoid them going legal, do so in writing.

sourcrates

Leanneglos1 wrote: »

Advice needed please.... I have received today a default notice agreement from one of my lenders who I have a personal loan with, they have stated the usual default information but have also stated that I need to call them to discuss my account as the next form of action will be to apply for a CCJ to be entered against my name, I’m aware of the new legilisation in the sense they have to give me more warning etc but what are your thoughts?? Do you think this confirms the company will most likely register a CCJ against me and If so by my calling them what would that achieve, I’m in a DMP with step change and first payment went out in Nov, thanks in advance for your help

Hi again Leanne,

If this debt is as you say, part of your DMP, then its unlikely the creditor will apply for a CCJ, there will be no benefit to them in doing so, the court will see the same budget you provided to the creditor, so they wont get any more money, put simply, it will be a waste of everyone's time and effort.

Its quite likely the default notice has been sent as a matter of procedure, rather than a serious attempt to contact you, to ease your mind, just send a short letter to them, thanking them for the default, explain your on a DMP with stepchange, and you are already paying what you can afford, so cannot see a reason why you should contact them further.

Remember, these are large organizations, a lot of the time the left hand dosent know what the right hand is doing !!