DMP Mutual Support Thread - Part 12

muppetscotland

I'm in a DMP and happy with it. So much so that i have now recommended to a friend. She owes around 20k unsecured debts and has around £60 left to repay them after full I&E discussion with SC today.

To my surprise SC directed her firmly towards an IVA explaining that it would have less affect on her credit file. She was told that her credit file would show the DMP arrangement with creditors for the entire duration until the accounts were repaid in full. This was not my understanding. I thought that once an account has defaulted, nothing new about it is added to your file and 6 years after the default the account in question is removed from your file. So for example in theory you start DMP Feb 2018, 4 credit cards default by say July 2018, credit report clean by July 2024. EVEN IF DFD ISN'T TILL FEB 2030.

SC however advised that the defaulted accounts would remain on her credit file till DFD (many more than 6 years away). They want her to do an IVA and charge for it through their commercial side.

She is much younger than me and still harbours the hope of getting a mortgage etc so the repair to credit file aspect is key to her. I didn't care about that so didn't really bother researching that side of things before I started my journey.

Any advice most welcome from you lovely helpful peeps thank you.

sourcrates

muppetscotland wrote: »

I'm in a DMP and happy with it. So much so that i have now recommended to a friend. She owes around 20k unsecured debts and has around £60 left to repay them after full I&E discussion with SC today.

To my surprise SC directed her firmly towards an IVA explaining that it would have less affect on her credit file. She was told that her credit file would show the DMP arrangement with creditors for the entire duration until the accounts were repaid in full. This was not my understanding. I thought that once an account has defaulted, nothing new about it is added to your file and 6 years after the default the account in question is removed from your file. So for example in theory you start DMP Feb 2018, 4 credit cards default by say July 2018, credit report clean by July 2024. EVEN IF DFD ISN'T TILL FEB 2030.

SC however advised that the defaulted accounts would remain on her credit file till DFD (many more than 6 years away). They want her to do an IVA and charge for it through their commercial side.

She is much younger than me and still harbours the hope of getting a mortgage etc so the repair to credit file aspect is key to her. I didn't care about that so didn't really bother researching that side of things before I started my journey.

Any advice most welcome from you lovely helpful peeps thank you.

They are correct in a way, not all creditors default you, some use “AP” markers (arrangement to pay) these indeed stay on your file 6 years after the debt is repaid.

One reason we recommend getting defaulted before starting a DMP.

muppetscotland

sourcrates wrote: »

They are correct in a way, not all creditors default you, some use “AP” markers (arrangement to,pay) these indeed stay on your file 6 years after the debt is repaid.

One reason we recommend getting defaulted before starting a DMP.

So should she stop paying the 4 credit cards for now, build up an emergency fund and meantime hope they default her? Then once defaulted, contact SC again and embark on a DMP? Then the defaulted drop off after 6 years?

sourcrates

muppetscotland wrote: »

So should she stop paying the 4 credit cards for now, build up an emergency fund and meantime hope they default her? Then once defaulted, contact SC again and embark on a DMP? Then the defaulted drop off after 6 years?

That would be the sensible way to do it.

Obviously keep a close eye on any letters.

Stepchange motis operandi, is to get you repaying your debts as soon as possible (they are creditor funded you see) but this isn’t always the right choice if you want your credit file to recover any time soon.

There is nothing stopping you writing and asking to be defaulted after a few months of non payment.

NowInspired

Hi
My head is full of questions and I have to ask them as I think of them.

I was about to ask why it is better to be defaulted before a dmp but it looks like that has just been answered. My only remaining query on that though is, by defaulting, do we run the risk of bailiffs or court proceedings? Is it just literally a case of stopping the payments or do we need to still communicate with the companies in any way?

Also, does each company run a check to see what we owe to other companies? I have one small debt that I am happy to continue with as it is nearly paid off and would rather not default it but I wondered whether the other companies would know?

Thanks in advance for your help.

kram

Bedsit_Bob wrote: »

I would think that taking out credit, would be a breach of the DMP.

I am not looking to take out anymore credit thanks.

kram

sourcrates wrote: »

You can request information about your credit accounts at any time of your choosing, as long as a balance remains on the account.

The request for information is between you and your creditor.

What I meant was it would be more difficult to stop or reduce payments whilst a cca was being requested as I am with sc.

Whereas if you were self managed you could stop paying and build up some funds until said cca request was correctly dealt with.

Sorry for any confusion in my question.

Suseka97

kram wrote: »

What I meant was it would be more difficult to stop or reduce payments whilst a cca was being requested as I am with sc.
Whereas if you were self managed you could stop paying and build up some funds until said cca request was correctly dealt with.
Sorry for any confusion in my question.

HI Kram

That's what I did - have 6 accounts/debts remaining (of the original 14) and decided to self-manage. At the same time I let the DCAs handling the debts know that I was going self-managed I also served up CCAs for all 6 debts. That was back in Aug and I haven't paid a penny since. All money currently going into the F&F pot whilst I wait on them providing me what they should. My DCAs are PRA Group and Link - the former seem to be a lot more on the ball and tend to respond fairly quickly to letters etc. Whereas LINK tend to go 'radio silence' but still put the account/s on hold.

Suseka97

muppetscotland wrote: »

So should she stop paying the 4 credit cards for now, build up an emergency fund and meantime hope they default her? Then once defaulted, contact SC again and embark on a DMP? Then the defaulted drop off after 6 years?

As sourcrates says - that's probably a good way to go. I jumped into my DMP with SC too quickly (hadn't come across this forum back then) and then had to push several of my creditors quite hard for a default. That took a while, most did backdate to the start of my DMP, some did not and so they stay on my file longer than the 6 years and closer to 8.

But she must keep in touch with creditors along the way - basically send a letter stating she is in discussion with a debt management company (use a NEDCAB reference, or the SC one as proof if needs be), that she will be stopping payments until further notice etc and so forth. Most companies put accounts on hold for 30 days as a standard response to that and some may well default her fairly quickly thereafter - others may need persuading

January2015

kram wrote: »

What I meant was it would be more difficult to stop or reduce payments whilst a cca was being requested as I am with sc.

Whereas if you were self managed you could stop paying and build up some funds until said cca request was correctly dealt with.

Sorry for any confusion in my question.

It makes no difference when you request a CCA - regardless of whether you are making full payments, DMP payments, token payments or even no payments at all.

Don't be nervous of exercising your legal right to access this information. The request for CCA will have no impact on any payment arrangements you have (or haven't made). It's a completely separate issue.