DMP Mutual Support Thread - Part 12

lunalola

Hi all,

I've been lurking on this thread for a while now, and have taken some great advice from everyone. I am planning on setting up a DMP with SC, however I am currently in the process of saving up an emergency fund, which I anticipate I will be doing for a good 6 months or so. I do feel like I am in no mans land at the moment though...

I am getting a lot of letters & calls (even though I sent letters notifying my creditors of my situation and asking to freeze interest etc.) Some have agreed to put on hold for 1 month, some haven't acknowledged anything and I think one of my Natwest accounts might be close to defaulting....

So what I wondered was, what do I do next? Do I need to send any more letters, or do I just re-send the ones I previously sent if they haven't been acknowledged? When should I start getting worried about the letters? (I am worried about all of them as they are worded in a scary way!)

Also, when the holding periods are up, say in a month and letters and calls start again, do I just send a letter telling them I am still in the same position?

Also, how will I know when an account has been defaulted? I have had Notice of Sum in Arrears letters and formal notice of intention to file a default .... Am I right in thinking these are different?

Apologies for all of the questions, I just feel like I am waiting for a ticking time bomb so need to put my mind at rest!

TIA x

sourcrates

lunalola wrote: »

Hi all,

I've been lurking on this thread for a while now, and have taken some great advice from everyone. I am planning on setting up a DMP with SC, however I am currently in the process of saving up an emergency fund, which I anticipate I will be doing for a good 6 months or so. I do feel like I am in no mans land at the moment though...

I am getting a lot of letters & calls (even though I sent letters notifying my creditors of my situation and asking to freeze interest etc.) Some have agreed to put on hold for 1 month, some haven't acknowledged anything and I think one of my Natwest accounts might be close to defaulting....

So what I wondered was, what do I do next? Do I need to send any more letters, or do I just re-send the ones I previously sent if they haven't been acknowledged? When should I start getting worried about the letters? (I am worried about all of them as they are worded in a scary way!)

Also, when the holding periods are up, say in a month and letters and calls start again, do I just send a letter telling them I am still in the same position?

Also, how will I know when an account has been defaulted? I have had Notice of Sum in Arrears letters and formal notice of intention to file a default .... Am I right in thinking these are different?

Apologies for all of the questions, I just feel like I am waiting for a ticking time bomb so need to put my mind at rest!

TIA x

Debt collection can take a very long time, and, as with everything, there is a process to follow.

After missing a few payments, your account gets passed over to collections still the same creditor, just another dept, whilst saving your EM, just send a letter each month detailing your position, and that it hasnt yet changed.

Once you are ready, go ahead with the DMP, you will know if you are defaulted, as you will receive a default notice, on occasion debts will be sold on at this point, keep an eye on the post for the new owner writing to you, they will not be aware of your situation.

You will gets lots of automated letters and calls, computers generate thousands of the things, usually the same fear of god message designed to get you to contact them, the worst they can do is take you to court, something thats easily dealt with if the need arises, so really the letters are all just empty threats of may bes and what ifs.

Go at your own pace, keep them informed, and just dont worry about it, once you start payments, everything will settle down.

Daveb45

I am writing to tell them I am doing a DMP and have cancelled my direct debit(s) is there a template letter for this so I don't make errors. Thanks

Suseka97

Daveb45 wrote: »

I am writing to tell them I am doing a DMP and have cancelled my direct debit(s) is there a template letter for this so I don't make errors. Thanks

If you head over to this website there are a few sample letters for various stages of a DMP, the first being 'hold action on your account' on the left hand side menu, which you can modify to suit your situation.

https://www.nationaldebtline.org/EW/sampleletters/Pages/default.aspx

January2015

Daveb45 wrote: »

I am writing to tell them I am doing a DMP and have cancelled my direct debit(s) is there a template letter for this so I don't make errors. Thanks

Hi

Assuming you are self-managing your DMP, then I would use NEDCABs site to get your started. It is free, no-one to interact with, but it walks you through everything you will need for your DMP and at the end of the process (which doesn't take too long), it will generate the income and expenditure report and offer letters you will need for your creditors.

However, before you jump in with both feet, have you managed to save an emergency fund yet? You will need one as you will have no access to credit. Don't worry, creditors are used to this happening.

What you can do is adapt the letters that are generated at the end of the NEDCAB DMP site and add something like "I intend to make token payments of £1.00 per month between February and July 2018, and subsequently payments of £xx.xx per month."

You choose how long you want to make token payments - I've allowed Feb to July in the example above because you really will need to build a good emergency fund and six month is not unreasonable. Feel free to change that. Also, some people choose to write they will not make payments at the current time, but will commence payments form (for example) July 2018. People new to DMP land are often to nervous to make no payments at all and so feel more comfortable that token payments show their commitment to creditors.

Also, don't forget to add a sentence along the lines of "Please ensure all communication regarding this account if via written letter only. I do not give permission for you to contact me by telephone. However I will always try to respond promptly to any letters received."

Put in writing that they cannot phone you and they have to honour that request, providing that you do remain in contact with them.

Hope this helps :beer:

MK-4

Hi all,

Thanks for all your posts and advice you have given, especially to the newcomers like me.
Many hours have been spent reading through all the posts and getting a lot of inspiration. It’s like learning a new language. The acronyms took some deciphering but getting there slowly.

Been sinking slowly but surely into debt. Now got to the point of not being able to pay all of them. Been living on CC’s for too long now.
It seems that like many on here, my feeling are that the debt is mine and I want to pay all that I owe, but just can’t make that happen anymore. I have a house that has equity in excess of my debts BUT my application for a re-mortgage was turned down, as well as loans that I tried to get to consolidate the debt. I’m coming up to 60, the mortgage only has 7 years to go and I really don’t want to lose the house.
It’s taken a few years but 60% reduction in household income and debts from a failed business (that the OH started) have now mounted up to too much. A couple of years ago I managed to get a number of new CC’s to do 0% balance transfers. It was helping a lot and the debt was reducing but then the change in income stopped that. We don’t have a lavish lifestyle and it is very difficult to find areas to reduce our spending.

Around 20 years ago I lost a business that had a lot of personal debt associated. This was shortly followed by being divorced. Left the family life taking all the debts with me. It took me 11 years to pay these all off. One was even written off. One debtor kept taking me to court but it was rejected every time as my SOA did not have the balance to pay any more that I was already paying.

Starting a DMP looks like a great (or my only) option. It is a bit confusing but the posts on here are helping a lot.

So far I have spoken to SC and filled in the budget. Currently doing a final, comprehensive, budget so I can see exactly where my costs are. Also opened a new bank account, although with one where I already have a credit card but only £300 left to pay on that card.

The DEFAULT is something that is not all that clear to me. Is this needed?

I still have may questions though. Some things are needed to be able to work, like the car and internet plus computer equipment.

My main problem that needs to be solved are bank accounts. We have one account each and one joint, all at the same bank. All near the overdraft limit. The OH cant join me on a DMP due to being self employed and I’m worried that the bank will nab all her money deposited into her own personal account. I’m not sure but it seems that she will need to open a separate account at another bank.

Can writing to the creditors be done by email or is it better to post? I will only write once the bank accounts are sorted out so still a way to go.

What happens if I write to / inform the creditors, one being the bank, to say I am having difficulties and that I am talking to SC. Will they immediately cancel our overdrafts and drain what little funds are in there?

Sorry for the long post, and will update as things happen.

sourcrates

MK-4 wrote: »

Starting a DMP looks like a great (or my only) option. It is a bit confusing but the posts on here are helping a lot.

So far I have spoken to SC and filled in the budget. Currently doing a final, comprehensive, budget so I can see exactly where my costs are. Also opened a new bank account, although with one where I already have a credit card but only £300 left to pay on that card.

The DEFAULT is something that is not all that clear to me. Is this needed?

I still have may questions though. Some things are needed to be able to work, like the car and internet plus computer equipment.


Can writing to the creditors be done by email or is it better to post? I will only write once the bank accounts are sorted out so still a way to go.

What happens if I write to / inform the creditors, one being the bank, to say I am having difficulties and that I am talking to SC. Will they immediately cancel our overdrafts and drain what little funds are in there?

Sorry for the long post, and will update as things happen.

Hi MK-4,

How much do you owe in total ?

It really is best to bank where you don`t have debt, as all banks have whats called the right of "set off", which basically means, they can take money from any other account held by you, within there company, to satisfy your debt to them.

There are rules, and limits to what they can take, but once its taken, its a struggle to get it back, if at all, best to remove the problem from the equation altogether and bank elsewhere.

The default is not something you really need to worry about, people like to be defaulted because defaults come off your credit file sooner, than arrangement to pay markers do, that`s the main reason.

In a DMP you set the rules, none of your stuff is at risk, this is not a regulated arrangement, its an unofficial agreement to repay what you owe at a lesser rate than normal.

Letter is best, but email is acceptable, as long as you have a written record of whats been agreed.

MK-4

Hi sourcrates,

Thanks for your reply. Currently owe £26.5k on credit cards and £5.3k on loans. The OH has £11.8k on credit cards.

Over the weekend I will transfer all the direct debits to a my new basic bank account. Will probably also transfer the joint account direct debits, and the OH can start depositing her payments into her other bank (different institution) so that can't be taken.

Once all done, sometime next week, I will write to each creditor.

Do I stop all payments at the same time as each creditor is written to, or do I wait for their response first?

sourcrates

MK-4 wrote: »

Hi sourcrates,

Thanks for your reply. Currently owe £26.5k on credit cards and £5.3k on loans. The OH has £11.8k on credit cards.


Do I stop all payments at the same time as each creditor is written to, or do I wait for their response first?

Just a couple of questions for you.

Are you both named on the mortgage/deeds for the house, or just one of you, if so which one of you ?

Am just thinking out loud how long a DMP would take to pay off your 32k of debt plus your partners, as you say your approaching 60, you don't want this debt hanging around into your pension years.

There may be other options.

MK-4

Yes, both on the mortgage. The mortgage finishes in 2024 and the plan is to be debt free by or before then.

When I spoke to SC they initially gave a 4 year period, but I expect this may be longer as my budget details are finalised. They did say the wife could not be on the DMP because she is self employed.

Thanks for your help and would be very pleased to hear of any other options.