DMP mutual support thread part 13 !!

sammy_Beebee

Suseka97 said:

sammy_Beebee said:

Hi I am on a DMP with Stepchange since October 2019 and I have two Creation accounts which have not defaulted. One is showing in arrears with Creation and relates to a credit card the second is a loan which has passed to Lowell but shows in arrears not defaulted. Should I write to Creation and Lowell and ask to be defaulted?

Yes, you should be chasing these defaults and don't just ask... by that I mean you need to be quite firm and point out that by not doing so they are putting you at a disadvantage compared to others who may simply have stopped paying.   Mark your letter/s with COMPLAINT big and bold at the beginning and address it to the 'Head of....'whatever office is handling the accounts.  If you don't get any joy, then I would be removing them from the DMP and stop paying until they play ball.  

Stepchange are brilliant in terms of what they do helping people to get on top of their debt problems, but if creditors or DCAs are being difficult, then you are often better off going self-managed so you can take control of the situation.  

Thank you for the advise, is there a template style letter I should use or do I simply write and request the accounts are defaulted - is there any legislation I should be quoting? If I removed them from my DMP will Stepchange accept this or do I need to go self managed first?

Suseka97

sammy_Beebee said:

Suseka97 said:

sammy_Beebee said:

Hi I am on a DMP with Stepchange since October 2019 and I have two Creation accounts which have not defaulted. One is showing in arrears with Creation and relates to a credit card the second is a loan which has passed to Lowell but shows in arrears not defaulted. Should I write to Creation and Lowell and ask to be defaulted?

Yes, you should be chasing these defaults and don't just ask... by that I mean you need to be quite firm and point out that by not doing so they are putting you at a disadvantage compared to others who may simply have stopped paying.   Mark your letter/s with COMPLAINT big and bold at the beginning and address it to the 'Head of....'whatever office is handling the accounts.  If you don't get any joy, then I would be removing them from the DMP and stop paying until they play ball.  

Stepchange are brilliant in terms of what they do helping people to get on top of their debt problems, but if creditors or DCAs are being difficult, then you are often better off going self-managed so you can take control of the situation.  

Thank you for the advise, is there a template style letter I should use or do I simply write and request the accounts are defaulted - is there any legislation I should be quoting? If I removed them from my DMP will Stepchange accept this or do I need to go self managed first?

Sorry to say but there isn't any legislation as such, but there are ICO guidelines that indicate a debt should be registered for a default when they are between 3 - 6 months in arrears.  Unfortunately its not an exact science and creditors are actually within their rights to continue to mark your credit file with APs or ARs, and consider that when in a DMP they are doing the right thing!

As for a template, I have to admit I'm not aware of one (although someone else may come along with a link).  Everyone's situation is different, but to help you get started I would be writing something along the lines of....

-----------------------------------------------------------------------------------------------------------------------------------------------
COMPLAINT
Dear (Head of Collections...or other)

You will be aware that I am currently repaying my account ref xxxx to you via StepChange as part of my Debt Management Plan and this has been in place since xxxx.   I am now writing to submit a formal complaint about the fact that your company is continuing to apply arrangement to pay markers to my credit file, rather than what should now be recorded as a formal DEFAULT (note: if you are still getting interest and charges added, say something like....'and as a result you are still applying interest and charges which is compounding my debt situation).  By applying AP and/or AR markers to my credit file this will have a much longer and far reaching negative impact on my ability to restore my credit worthiness in the future. 

As such I feel that you are not treating me fairly and I am most certainly at a disadvantage when compared to other debtors who may have chosen to withhold all and any payments until a default had been applied. You will be fully aware that AP/AR markers remain on an individual's credit file for 6 years from the date an account is settled/satisfied, whereas a default is removed 6 years from the date applied (so effectively much quicker).

I therefore request that you address the situation as a matter of priority and apply a backdated default to within 3-6 months of the date I failed to make my contractual payments, as ICO guidelines indicate (.... you can add that this should be w.e.f mth/2019).

I look forward to receiving written confirmation of your intention to backdate said default by return.  I should advise that if you insist on maintaining the current reported position, then you should state that intention in writing and I will take the matter up with the Financial Ombudsman Service.  If I am forced to take such action I will be removing the account from my current DMP, until I receive a satisfactory response.

Yours xxxx

-----------------------------------------------------------------------------------------------------------------------------------------------
 
As you'll read this balances what is a 'polite' request (so as not to antagonise) with a clear expectation and intent to follow through.   As for SC, I would get in touch and tell them that you are unhappy that x accounts have still not been defaulted and say that until the account is default you want all payments to the creditor suspended.  If SC say that they cannot do this, then you should say that you will therefore be taking back control of the whole DMP.  Obviously be polite with SC, they will only be following their own guidelines and they'll be fine if you do plan to go self-managed.  Or if you happy to do the latter anyway - just skip the first bit and let them know you want to SM and take it from there.

Good luck.

sammy_Beebee

Suseka97 said:

sammy_Beebee said:

Suseka97 said:

sammy_Beebee said:

Hi I am on a DMP with Stepchange since October 2019 and I have two Creation accounts which have not defaulted. One is showing in arrears with Creation and relates to a credit card the second is a loan which has passed to Lowell but shows in arrears not defaulted. Should I write to Creation and Lowell and ask to be defaulted?

Yes, you should be chasing these defaults and don't just ask... by that I mean you need to be quite firm and point out that by not doing so they are putting you at a disadvantage compared to others who may simply have stopped paying.   Mark your letter/s with COMPLAINT big and bold at the beginning and address it to the 'Head of....'whatever office is handling the accounts.  If you don't get any joy, then I would be removing them from the DMP and stop paying until they play ball.  

Stepchange are brilliant in terms of what they do helping people to get on top of their debt problems, but if creditors or DCAs are being difficult, then you are often better off going self-managed so you can take control of the situation.  

Thank you for the advise, is there a template style letter I should use or do I simply write and request the accounts are defaulted - is there any legislation I should be quoting? If I removed them from my DMP will Stepchange accept this or do I need to go self managed first?

Sorry to say but there isn't any legislation as such, but there are ICO guidelines that indicate a debt should be registered for a default when they are between 3 - 6 months in arrears.  Unfortunately its not an exact science and creditors are actually within their rights to continue to mark your credit file with APs or ARs, and consider that when in a DMP they are doing the right thing!

As for a template, I have to admit I'm not aware of one (although someone else may come along with a link).  Everyone's situation is different, but to help you get started I would be writing something along the lines of....

-----------------------------------------------------------------------------------------------------------------------------------------------
COMPLAINT
Dear (Head of Collections...or other)

You will be aware that I am currently repaying my account ref xxxx to you via StepChange as part of my Debt Management Plan and this has been in place since xxxx.   I am now writing to submit a formal complaint about the fact that your company is continuing to apply arrangement to pay markers to my credit file, rather than what should now be recorded as a formal DEFAULT (note: if you are still getting interest and charges added, say something like....'and as a result you are still applying interest and charges which is compounding my debt situation).  By applying AP and/or AR markers to my credit file this will have a much longer and far reaching negative impact on my ability to restore my credit worthiness in the future. 

As such I feel that you are not treating me fairly and I am most certainly at a disadvantage when compared to other debtors who may have chosen to withhold all and any payments until a default had been applied. You will be fully aware that AP/AR markers remain on an individual's credit file for 6 years from the date an account is settled/satisfied, whereas a default is removed 6 years from the date applied (so effectively much quicker).

I therefore request that you address the situation as a matter of priority and apply a backdated default to within 3-6 months of the date I failed to make my contractual payments, as ICO guidelines indicate (.... you can add that this should be w.e.f mth/2019).

I look forward to receiving written confirmation of your intention to backdate said default by return.  I should advise that if you insist on maintaining the current reported position, then you should state that intention in writing and I will take the matter up with the Financial Ombudsman Service.  If I am forced to take such action I will be removing the account from my current DMP, until I receive a satisfactory response.

Yours xxxx

-----------------------------------------------------------------------------------------------------------------------------------------------
 
As you'll read this balances what is a 'polite' request (so as not to antagonise) with a clear expectation and intent to follow through.   As for SC, I would get in touch and tell them that you are unhappy that x accounts have still not been defaulted and say that until the account is default you want all payments to the creditor suspended.  If SC say that they cannot do this, then you should say that you will therefore be taking back control of the whole DMP.  Obviously be polite with SC, they will only be following their own guidelines and they'll be fine if you do plan to go self-managed.  Or if you happy to do the latter anyway - just skip the first bit and let them know you want to SM and take it from there.

Good luck.

Thank you so much for your very detailed response, I really appreciate your advice. I am going to send the letters off and see what happens in the coming weeks and if I get no joy I will speak to SC. If I go self managed is it simply a matter of me contacting the creditors to confirm this and then setting up direct debit payments to each of them?

Suseka97

@sammy_Beebee.  If you do go SM then firstly make sure you take a note of all your existing balances and debt owners (either the original creditor or DCA), along with the relevant reference/account numbers for each.  When you close your SC account you'll no longer have online access to these.  Then all you need to do is write to them and tell them you will be taking over the monthly payments and ask them for their payment details... but do not set up direct debits (and if they offer to do that for you, say no).  You need to set up standing orders, which are pretty much the same thing except that you are in full control of SOs - you can vary the amounts, if you need to and stop them whenever you like (which is what you'll want to do if you eventually start knocking them off with F&Fs).

CAL2727

Hi Everybody! Just a bit of an update from me! New bank account with all direct debits changed over manually, my old account was associated with a loan / overdraft and x2 credit cards 😬 I have stopped payments and sent out letters to 7 creditors on Monday from templates I got on Nedcab stating that I was in financial difficulty etc and to put the accounts on hold for 30 days and that I wanted all correspondence in writing ONLY. I am holding off on sending the letter to my old current account lender as I want to see if my pay from work has been successfully switched over in January. I am feeling so much better about the whole situation already and this forum has been invaluable. I plan on going self managed once I have saved an EF and have heard back from all the creditors. Glad I bit the bullet - so if you are in financial difficulty and thinking about doing it - go for it!  

jojay75

It looks like I may have enough to make a full and final settlement on my debt. It’s currently £15k. I’m with stepchange. What’s the best way to go about it? What percentage to offer? I’m not 100% sure on the exact amount yet, as it’s from my dad’s estate. Most of it is going to mum/put in trust for us. I would also like to keep a bit back as emergency fund to avoid future debt. Would it be better to wait, save and pay debt off in full for my credit file, or does it matter? 

CAL2727

Hi - just another question from me on the start of my self managed DMP journey. I have sent the majority of my holding letters this week and have heard back from a few, (plan not to pay anything for 3-6 months to try and force defaults while saving an EF) I’m just wondering if everyone keeps in contact with their creditors during this 3-6 month period of no payments? Did you write to your creditors after the initial holding letters to say you wouldn’t be making payments for a while etc or did you just leave it? Thanks 

DebtHurricane

CAL2727 said:

Hi - just another question from me on the start of my self managed DMP journey. I have sent the majority of my holding letters this week and have heard back from a few, (plan not to pay anything for 3-6 months to try and force defaults while saving an EF) I’m just wondering if everyone keeps in contact with their creditors during this 3-6 month period of no payments? Did you write to your creditors after the initial holding letters to say you wouldn’t be making payments for a while etc or did you just leave it? Thanks 

Completely ignored them. By engaging and informing them- they’re less likely to default and more likely to keep holding the account, thinking they’re helping but in reality to get defaults you need to ignore them. 

alxofn1

Hello everyone. A quick question from me. 

I'm in the first month of my DMP, having made my first payment to StepChange earlier this month. I'm in a bit of a panic however. One of my creditors on my DMP is PayPal Credit, so not a credit card lender per se like the rest of my creditors. Anyway, in my ignorance I noticed that two recurring payments (total value less than 10.00) that I have for usage of a cloud drop box service were charged to my PayPal Credit balance. This means that I have effectively utilised the credit facility even though I'm on a DMP. From what I can gather my other creditors e.g. BarclayCard have closed my card so it cannot be used but the PayPal Credit facility still seems to be usable. It was not my intention to use it for these costs, as these should have come out of my current account but somehow I've overlooked this. 

The bottom line question I have is : will my DMP be in serious jeopardy for this (inadvertent) use of a credit facility that is listed on my DMP? 

Thanks all.

Suseka97

jojay75 said:

It looks like I may have enough to make a full and final settlement on my debt. It’s currently £15k. I’m with stepchange. What’s the best way to go about it? What percentage to offer? I’m not 100% sure on the exact amount yet, as it’s from my dad’s estate. Most of it is going to mum/put in trust for us. I would also like to keep a bit back as emergency fund to avoid future debt. Would it be better to wait, save and pay debt off in full for my credit file, or does it matter? 

There are a couple of factors to consider here.  Who holds the debt (original creditor or DCA) and how old is the debt?  I ask because if the debt has been sold on and/or is pretty old, then you are more likely to get favourable discounts.  But, the best way to go about that is to take control of your DMP and stop making payments whilst you send off CCA requests.  Hopefully if your debts are with a DCA they are not going to be able to provide the necessary documentation that proves a debt is enforceable.  The reason this is useful is because then, you stop paying for a while and then start the F&F ball rolling and if they return as unenforceable you have more chance of getting a discount.

If you think about it logically - why would a OC or DCA want to consider accepting discounts if you are making regular payments.  Especially a DCA who will have bought the debt cheaply and the more you pay the greater their profits.  Alternatively, if you are keen to move ahead you can always test the water and make them an offer.  Start low 10% or 20% of the outstanding balance/s and see what happens.  But again, to do this you are best to self-manage the DMP from now on.

As for your credit file, that's pretty much trashed already - yes, so really it makes no difference whether you pay it off in full or not.  Again, depends on how old and whether the account/s are defaulted as to how long the debt is going to impact on your credit worthiness into the future.