DMP mutual support thread part 13 !!

Blackberrypie_3

Hello everyone, 
I am finally taking my head out of the sand and dealing with the £27k debts that I have (eek!). I have been reading the thread and hope that I have got a better idea of what to do, but wondered if someone might just help clarify? 

My debts are a mixture of 2 credit cards, a loan, Paypal Credit, Klarna and 4 overdrafts. As yet, I have not missed a payment on any of them but I have reached the limit on everything and cannot carry on (I believe someone said that they are "robbing Peter to pay Paul" which is very accurate. My overdrafts pay my cc interest, my loan was an attempt to pay off the overdrafts etc. etc.). I have started the process with StepChange and so far they have offered me £790 a month over nearly 3 years to clear the debts. I have received the agreement from them but not yet signed it or provided further documentation. 
I have told one overdraft provider and one of the cc companies that I am struggling to pay. They have both agreed to freeze the interest for 30 days to give me breathing space.
I have also opened a completely separate bank account with an unconnected bank to my debts and am requesting my employer pay my salary into that

From what I understand from these boards is:
a) I should stop payment on all my debts as soon as possible so they default (maybe in 3-6 months) - cancel all direct debits & standing orders asap
b) If I don't pay my debts and they default, when I start with SC it is more likely they will freeze the interest and the default will be off my credit file much quicker than an agreement to pay
c) Use the money that I am not giving to the creditors to build an emergency fund in my separate bank account

The questions I have though are:
1) One of the loans is for over £9k - will this be subject to a statutory demand if I don't pay anything for a while and therefore a bankruptcy order, as it is over £5k? I have no assets such as a house/car etc. and need to avoid bankruptcy/CCJs as I would have to declare them to my employer. (this is one I am most worried about). It will be included in the DMP with SC but I don't know how to proceed with it. Do I just keep paying this one while I default on the others?
2) When should I start with SC? Do I wait until I have had default notices or do I just not pay for 3 months, ignore chasing letters and start with SC on an arbitrary date like 1st Jan, for instance? Do I tell all my creditors now that I am talking to SC or just ignore all the letters/chasers until they default? Unsure of the timeline needed

This has been causing a lot of sleepless nights so keen to get a plan in place so I know I can sort it. Any help gratefully received!

Remus1975

Just a quick question folks. I'm just putting together the budget sheet via NEDCAB to send with my proposed payment plan and would like to ask.. can I allocate some money each month towards family christmas and birthdays?

DebtHurricane

mrjoshua88 said:

Ok. So just to clarify: you simply stop paying anything until you receive a notice of default? Then it’s better to go into a DMP at this point? 

Exactly. StepChange would rush you into a DMP so wait till everything defaults. I made the mistake last year of starting a dmp because I was impatient. It took all of this year to get the accounts defaulted. Had I ignored completely and not rushed into the dmp I’d have been better off 

DebtHurricane

Remus1975 said:

Just a quick question folks. I'm just putting together the budget sheet via NEDCAB to send with my proposed payment plan and would like to ask.. can I allocate some money each month towards family christmas and birthdays?

Yes. You have to have some quality of life. Give yourself some room to breathe in your budget otherwise it’s unsustainable long term

sourcrates

Blackberrypie_3 said:

Hello everyone, 
I am finally taking my head out of the sand and dealing with the £27k debts that I have (eek!). 

The questions I have though are:
1) One of the loans is for over £9k - will this be subject to a statutory demand if I don't pay anything for a while and therefore a bankruptcy order, as it is over £5k? I have no assets such as a house/car etc. and need to avoid bankruptcy/CCJs as I would have to declare them to my employer. (this is one I am most worried about). It will be included in the DMP with SC but I don't know how to proceed with it. Do I just keep paying this one while I default on the others?
2) When should I start with SC? Do I wait until I have had default notices or do I just not pay for 3 months, ignore chasing letters and start with SC on an arbitrary date like 1st Jan, for instance? Do I tell all my creditors now that I am talking to SC or just ignore all the letters/chasers until they default? Unsure of the timeline needed

This has been causing a lot of sleepless nights so keen to get a plan in place so I know I can sort it. Any help gratefully received!

I think you are way over thinking this, and driving too fast, and too far down the road with the statutory demand.
Things don’t happen that quickly, and why would a creditor pay £680 to make you bankrupt when you have no assets to repay them with ?

Bankruptcy only works in those circumstances if you have significant assets that would make payment of the fee worthwhile, you have non, so what would be the point ?

Seriously, you must think these things through logically, it’s never going to happen, the loan will be just fine in the DMP with all your other non priority debts.

There are people on these forums with over 100 grand of debt, where loans of 20/30k have gone into debt management, it’s not a problem.

Parkyp

Can anyone help on this query. I use credit karma to check my credit I owe 73k including mortgage. I did Experian check today (free one) and says total credit £61,653. Do different credit agency exclude certain debts. The Experian didn’t give me any information other than totals I don’t want to pay a monthly fee to find out more. I remember years ago you used to pay a couple of pounds to get a full credit report from someone, does anyone know if that still exists. Thanks 

Suseka97

Parkyp said:

Can anyone help on this query. I use credit karma to check my credit I owe 73k including mortgage. I did Experian check today (free one) and says total credit £61,653. Do different credit agency exclude certain debts. The Experian didn’t give me any information other than totals I don’t want to pay a monthly fee to find out more. I remember years ago you used to pay a couple of pounds to get a full credit report from someone, does anyone know if that still exists. Thanks 

I've found varying information regarding my credit file on all 3 CRAs, so yes- the information can differ.  All of my debts were included (all cleared now), but the amounts outstanding were different.  Credit Karma (Transunion) updates their records quite frequently (weekly, I think) but Clearscore (Equifax) and MSE Credit Club (Experian) update on a monthly basis.  I've had one debt on Experian that sat with an outstanding balance for 2 months, when it had been cleared.  

I don't pay a fee for Experian, because I registered through MSE Credit Club and can see all info - not just totals.

sourcrates

Parkyp said:

Can anyone help on this query. I use credit karma to check my credit I owe 73k including mortgage. I did Experian check today (free one) and says total credit £61,653. Do different credit agency exclude certain debts. The Experian didn’t give me any information other than totals I don’t want to pay a monthly fee to find out more. I remember years ago you used to pay a couple of pounds to get a full credit report from someone, does anyone know if that still exists. Thanks 

Statutory credit reports are free from all the main protagonists.

Not all creditors report to all 3 CRA`s.

With many people working from a distance right now, things are not updating as they perhaps normally would.

Parkyp

thank you for I replies. I joined mse credit club, so I got to see my accounts a loan is not on the Experian one although it is not new. At least I know the answer now, thanks again 

Stanton14

DebtHurricane said:

mrjoshua88 said:

Ok. So just to clarify: you simply stop paying anything until you receive a notice of default? Then it’s better to go into a DMP at this point? 

Exactly. StepChange would rush you into a DMP so wait till everything defaults. I made the mistake last year of starting a dmp because I was impatient. It took all of this year to get the accounts defaulted. Had I ignored completely and not rushed into the dmp I’d have been better off 

I’ve done the same thing and 2 of my creditors haven’t defaulted me. I’m with SC currently paying a DMP. Will they eventually default while I make payments? I’m not making minimum payments and they’re both in arrears. Thanks