DMP mutual support thread part 13 !!

jack_1992

Hi everyone

This thread has been so helpful but one question I had was why do you want companies to default on the accounts? I spoke with someone at SC who said they ask companies not to take any further action whilst on a DMP including defaults and fees etc so I just need to understand this I guess?

I'm trying to get my head round all of this stuff - I'm in a mess and just need to try and resolve it but I don't really know the best way to do it in all honesty and I feel a DMP is the only way out but it's just a long battle and I am not sure with the anxiety of the calls and letters it would do me any good. But then is that short term hassle going to be better for the long term gain?

Debtworrier1981

Afternoon all. Can someone please give me some tips. I am approximately 28k in debt. My tax credits for my eldest child are due to end at the end of august, and that is gonna leave me with a huge shortfall each month, added to the fact that the maintenance I get for him will also end.  My younger children’s father, who was mostly the person getting me in to debt, is not exactly reliable when it comes to maintenance. so I have decided that a DMP is the way to go. I have the debts split between 3 credit cards and a loan. The loan is due to end in 11mths time and has 3k remaining. My grandma has agreed to pay this each month for me so that will not need to be included or budgeted for as part of my DMP. I have not yet missed any payments. I have set up a new account, no overdraft, and I am currently in the process of changing all of my direct debts over to this account, barring the debts. I need to get together some money as my emergency fund, especially as I have some issues with my house at the moment and will need an electrician etc to come fix it. I have today swapped my mortgage, with Halifax, on to a new 5yr fixed rate so I know this won’t change. So, when do I stop paying my debts now? I haven’t been in touch with Stepchange yet, as although my income has been difficult, it’s come September when my income will drop significantly. What do I need to do? Not paying the credit cards will enable me to get some emergency fund together, but how long does it take for the credit cards to default? Do I need to let them do this before I go to stepchange? Many thanks. I feel so much better just starting the process. 

Moveslikeagger

I have been in a DMP for 2 years. My advice is to stop all payments until your accounts default. You will get letters and calls for a while but these are nothing to worry about. Once defaulted normally the debts are passed on to a debt collection agency (DCA) to try and retrieve the money. Your original creditor still owns the debt but basically cant be bothered to chase you. This can take anywhere from 3-12 months in my experience. Once that's happened communicate with the DCA. I do via email. This is when the calls and letters completely stop. Set up a payment plan by sending and income and expenditure form and every 6-12 months you have to update this. Don't worry about the DCAs, they are easy to deal with. Some of my debts have now been sold but the same DCA is still managing them. Please do not worry. Nobody will come chasing you and the calls and letters are not as bad as you think they will be. Communicate by mail and stress this to your creditors and DCA that's the best way to contact you. Personally I wouldn't go to stepchange, I did everything myself and I have control who I pay and when. Any more questions just ask. PS. Sourcrates, suseka, willingtolearn are all fantastic on here for regular advice. My sound sleeping at night is mainly because of the advice I got from this forum. 

Suseka97

HappyDaysAreHereAgain said:

I’m just looking for some advice what to do next with a couple of things if that’s ok? I’ve had a letter this morning from one creditor stating that unless I pay the full balance outstanding my a certain date, I’ll be defaulted (it’s the default notice). Do I need to respond? I have a DMP with SC - do they need to be informed of this?

Also, I had an email from SC saying that my one creditor is no longer dealing with my account (it had gone to debt recovery department and when I had the letter explaining this with the new reference I had already referred the details onto SC). SC are now saying that the creditor is no longer dealing with my credit so I need to provide more details - I haven’t had any further details so not sure what SC want? SC have said they will stop payments in 6 weeks if I don’t update the information (plus the payment to them has been held this month). What’s the best thing to do? 

No need to do anything re the default notice, just let things take their course and it makes no difference to the way SC will handle the DMP.  The default is between you and your creditor and if you read back on this thread you'll know that a default is the way to go.  You should be notified by the debt purchaser, if the debt has been sold on - but if you don't hear anything more you should go back to the original creditor and ask them to confirm the details.  Just let SC know you are trying to locate the right information and they should continue to hold the payment.

sourcrates

HappyDaysAreHereAgain said:

I’m just looking for some advice what to do next with a couple of things if that’s ok? I’ve had a letter this morning from one creditor stating that unless I pay the full balance outstanding my a certain date, I’ll be defaulted (it’s the default notice). Do I need to respond? I have a DMP with SC - do they need to be informed of this?

Also, I had an email from SC saying that my one creditor is no longer dealing with my account (it had gone to debt recovery department and when I had the letter explaining this with the new reference I had already referred the details onto SC). SC are now saying that the creditor is no longer dealing with my credit so I need to provide more details - I haven’t had any further details so not sure what SC want? SC have said they will stop payments in 6 weeks if I don’t update the information (plus the payment to them has been held this month). What’s the best thing to do? 

Thanks.

No, its a standard default notice for information only, you don`t have  to do anything, except file it in the bin.

Wait until the new owner contacts you, then pass on the new details.

Debts are bought and sold all the time, its just another hurdle to jump in the DMP race.

Suseka97

jack_1992 said:

Hi everyone

This thread has been so helpful but one question I had was why do you want companies to default on the accounts? I spoke with someone at SC who said they ask companies not to take any further action whilst on a DMP including defaults and fees etc so I just need to understand this I guess?

I'm trying to get my head round all of this stuff - I'm in a mess and just need to try and resolve it but I don't really know the best way to do it in all honesty and I feel a DMP is the only way out but it's just a long battle and I am not sure with the anxiety of the calls and letters it would do me any good. But then is that short term hassle going to be better for the long term gain?

When an account defaults it has the effect of stopping all interest and charges being applied to the account, which means you are now able to pay down the capital balance.  It also starts the 6-year clock ticking from when the default will be removed from your credit file (irrespective of whether a balance remains or not), now that's an important timeframe for people looking for their credit history to improve when looking to apply for a mortgage or remortgage further down the line.  It's not impossible to get mortgages with an adverse credit history, but it takes a specialist broker and you won't have the whole of market rates available.

As for whether this is the best way for you to resolve your debt issues, that rather depends on your individual circumstances.  The other options are generally bankruptcy (which you would want to avoid if a homeowner, or in an occupation where such things might have an impact), or an IVA which has a 5 - 6 year timeframe and is a more 'managed' approach.  A DMP gives an individual more autonomy and is an informal arrangement.  I'm assuming if SC have recommended a DMP to you - then that is the way to go.  Yes, you may well get a flurry of letters with varying forms of warnings about non-payments of debt, but these are all standard letters and required by law.  Once a DMP is in full flow then the letters fade away and you'll find you tend to just get the odd annual statement.  If you receive any calls you don't feel able to deal with, well then you write to tell them to only contact you by letter and block the number.

It can be daunting but take it one day at a time and you'll get there and come back on to this thread whenever you need a bit of advice, or just to let off steam  

sourcrates

jack_1992 said:

Hi everyone

This thread has been so helpful but one question I had was why do you want companies to default on the accounts? I spoke with someone at SC who said they ask companies not to take any further action whilst on a DMP including defaults and fees etc so I just need to understand this I guess?

I'm trying to get my head round all of this stuff - I'm in a mess and just need to try and resolve it but I don't really know the best way to do it in all honesty and I feel a DMP is the only way out but it's just a long battle and I am not sure with the anxiety of the calls and letters it would do me any good. But then is that short term hassle going to be better for the long term gain?

Defaults are good for a number of reasons.

First it gives you a clear 6 year timeframe to when your file will be clear again.

Second all charges and interest stops for good.

Before you enter debt management make sure all your debts are defaulted, and you have a good emergency fund saved, both are achieved by non payment to your creditors for a number of months, you really need to read this thread, or as much of it as possible, as there is a lot to take in.

jack_1992

I cannot thank you guys enough. I have been reading this thread for a couple of days now and feel I have a good idea on things and I just feel better for takin these steps.
Hell it's scary as on that first day, but now as each day goes by and I come to terms with things, I feel so much more relaxed about it all.

You guys are just amazing - your experience and advice helps people like me every day and it's so so appreciated. 

I'm hoping to stick around throughout my journey to being debt free. 

DourPower

Hello all - I'm on my way to a more peaceful self-managed DMP land -  I stopped paying or responding to all my cards last July and by now they've mostly all defaulted and sold me on to other companies..

But I had halifax and lloyds credit cards (which are the same company I think) and they have both been sold on to LC Asset, but those two accounts are not appearing as defaulted, just delinquent every month - Who should I approach to get the default through? Should i refuse to pay LC Asset until the defaults appear?

torheb

Hi, I’ve been in a dmp for a few years, separated from my partner last year and we separated our dmp, we need to sell the house and I’ll move into a private rented property - will there be any issues due to my credit rating / dmp does anyone know being approved for renting - scared to apply for fear of rejection as don’t know what I’ll do