DMP mutual support thread part 13 !!

Norfolk_Jim

Have lost track of how Iong I've been paying my SC administrated DMP, less than 2 years but recently I suffered a drastic reduction in income and am now paying about a third of what I was and my Debt Free date is well over 20 years away (Im not terribly well, I doubt I will live that long anyway), The DMP is in the name of both me and my wife (She is a good bit younger than me) but only one of the 8-9 debts are in her name. This seems a bit unfair to me and I was wondering if it would be a straightforward thing to have the DMP changed so it was just in my name and let her manage her own financial affairs. Would a request to SC to remove her and her 1 debt from the DMP create any problems for me? I just want to be safe before taking any actions I might later regret

sourcrates

pp64 said:

Good Evening Everyone.  
I have followed this thread for a year or so now and have followed much of the advice.  I have made the decision to take phased retirement in September and hope to use my lump sum to pay off my debts.  I have written to all my debtors offering F&F settlements - all those who have responded have rejected and asked for my I&E forms for when I retire, suggesting to me that they want to see whether I could continue my monthly payments through SC (which I could but just want things to be finished with).  I am thinking of going self-managed as one of my debts is unenforcable and I want to stop paying it.  I have read on here that you don't have to send I&E but the companies have stated that they won't consider a F&F payment without it.
Any advice?
Thank you.

You have the gist of what they are sniffing at, yes, I have written previously about this subject, so without wanting to repeat myself, we live in a free country, yes, we can do whatever we like, within reason, there is no obligation on any of us, to do anything any 3rd party may ask of us, unless its a lawful requirement, which this isn`t.

I suggest you send the required forms back to them, but bolstered heavily in your favour, that is how you play the game.
You must make them think that your offer represents the best deal they can possibly get out of this situation, you do not have to prove, or justify your budget, over to you.

sourcrates

Norfolk_Jim said:

Have lost track of how Iong I've been paying my SC administrated DMP, less than 2 years but recently I suffered a drastic reduction in income and am now paying about a third of what I was and my Debt Free date is well over 20 years away (Im not terribly well, I doubt I will live that long anyway), The DMP is in the name of both me and my wife (She is a good bit younger than me) but only one of the 8-9 debts are in her name. This seems a bit unfair to me and I was wondering if it would be a straightforward thing to have the DMP changed so it was just in my name and let her manage her own financial affairs. Would a request to SC to remove her and her 1 debt from the DMP create any problems for me? I just want to be safe before taking any actions I might later regret

Hi Jim,
You can do whatever you wish regarding your DMP, if that`s what you want to do, then contact stepchange and tell them.

Your arrangement friend, your choice on how its run, SC are there to help you, you just need to inform them of your wishes.

LoanWhisperer

Hi, I started reading through this thread as I'm about to setup a DMP with SC (who have been managing a TPP for me for the last 11 months), and have seen various concepts thrown up here that I wasn't aware of before. I honestly don't have time to read through the full 380-odd pages so I'm hoping somebody with far more experience of these things can give me some quick pointers!
I don't blame you if you need a TL;DR so I've put main points throughout in bold!

Background (skip this if you want!): 
I lost 90% of my income pretty much overnight, initially as a result of the High Street crash but then had no chance to recover before Covid hit, going from approx. 4K a month to £400 pm (Universal credit).
Because my problems started a few months before lockdown, I wasn't considered for nor offered any covid relief options by my creditors, and made a risky decision in late 2019 to use new credit to pay existing creditors with the aim of covering it all by getting new work - because of all the subsequent covid measures and the delay in getting any support from govt, this was a gamble I lost, and I'm currently in debt to the tune of about £23K.

Most of my creditors put me into default in the middle of lockdown despite having been making token payments via SC (who have been fantastic), which I was raging at to begin with, but have realised now that's probably not a bad thing.
The first basic question is, considering the level of debt that I have (which is staggering to me and makes my eyes water every time I think of it), is a DMP really a better option than an IVA?
My understanding is that an IVA would be much more damaging as it is a legal insolvency measure and will stay on my record for longer than the defaults, whereas if I go with a DMP, I will actually be repairing my credit score as I go, right? Whereas with an IVA it's trashed for the entire duration.
I am in rented accommodation and I'm seriously worried about possible homelessness even though I can afford rent because I do not have access to a guarantor and cannot secure new accommodation as I'll fail a credit check. This is already a serious problem as I have to move in a month.
This is my major concern re: credit scoring. I'm not bothered about not getting new lines of credit etc.

The debt:
I had 4 CCs - Barclaycard, Virgin Money, Santander and a Newday (Amazon) card.
(The Virgin and Santander cards were 0% cards I used to balance transfer from the others).
These have all been put into default, frozen and sold to 3rd parties (all of whom are being extremely amicable and easy to deal with).

I had a PayPal credit account which has been frozen, defaulted and sold on as above.

I had a 7.5K Govt. business loan from 2017 that was put into default/frozen as above with £3.5K left to pay on it.

I have 2 personal loans from Ratesetter and these accounts have not been put into default .
These accounts are showing as 'up-to-date' in my credit checker tool although they most definitely are not. They total about £3.5K outstanding.

I also have a £700 overdraft with TSB (that's not my core banking institution now) with a £690 balance - no charges or interest being added and that is also showing as 'up to date'.

The accounts with defaults have been defaulted for about a year now.
I have a capital one credit card in good standing with about 25% credit used that I can use for dire emergencies (albeit with a horrific interest rate).
So, that's where I stand today.

I have just taken regular employment to start attacking this problem but the wage is low I can't really afford more than about £125 per month for a DMP until October as I'm also paying off a tax bill, but can increase the DMP amount to around £200 pm from October, and hopefully keep raising it as time goes by.
But do I want to??!
I had resigned myself to paying off these debts for at least a decade, but what I've inferred from some posts here is that I could make a  separate pot to pay into with an aim to accrue a lump amount that I could use to settle accounts at a discount when offered.
One of the companies that bought a defaulted account (Lowell) already made an offer to settle at 30% but I just don't have the dough up front for that - yet. Plus it seems that better discounts may be offered in the future.

I am looking at starting the DMP with SC and then perhaps self-managing it down the road but I'm not clear on what benefit that actually brings to me - will the companies that bought the accounts in default not offer me discounted settlements if I'm with SC?

I'm so sorry for such a long post, I've had nobody to speak to about any of this outside of SC and any advice will be gratefully received as I'd like as many different opinions as possible.

LoanWhisperer

A quick edit to the above: How do I force Ratesetter into putting my accounts into default? Is that even possible? 

hev3049

Stop paying Ratesetter so they default the accounts.

swansea_lad

Recently MBNA have started charging me interest as im making the contractual payments, despite being on the DMP with Payplan since Sept 2019. When i contacted PayPlan they said if i pay more or default it will have consequences. As the other creditors may ask for more money off me if they can see i am giving  preferential payments to another creditor.

LoanWhisperer

hev3049 said:

Stop paying Ratesetter so they default the accounts.

Thanks - they've only been receiving £1 a month for the last 11 months - I want to start a DMP asap, so how long would it normally take between me instructing SC to stop paying them and them putting me into default - would SC even do that, ie treat one creditor differently to the others?
Ratesetter have been real d#cks on the phone compared to everyone else.. 
(From what I've been reading SC would have to do that as they're under instruction from me, or is this one of the reasons why it's better to self-manage, as I can make those decisions unilaterally?)
Something tells me SC would not go along with stopping paying just one creditor as they are doing things by the book, as it were?
I'm clueless as to the machinations of all this stuff behind the scenes.

hev3049

Sorry I can't answer about SC as I self manage, I only correspond with companies via letter or email - never by phone! I doubt if SC will let you stop paying just one. I went straight to self manage and have not looked back (have a look at my signature), but I am still learning. I am sure someone with alot more knowledge than me will comment soon & help you.

sourcrates

LoanWhisperer said:

hev3049 said:

Stop paying Ratesetter so they default the accounts.

Thanks - they've only been receiving £1 a month for the last 11 months - I want to start a DMP asap, so how long would it normally take between me instructing SC to stop paying them and them putting me into default - would SC even do that, ie treat one creditor differently to the others?
Ratesetter have been real d#cks on the phone compared to everyone else.. 
(From what I've been reading SC would have to do that as they're under instruction from me, or is this one of the reasons why it's better to self-manage, as I can make those decisions unilaterally?)
Something tells me SC would not go along with stopping paying just one creditor as they are doing things by the book, as it were?
I'm clueless as to the machinations of all this stuff behind the scenes.

Hi,
Your plan sounds quite reasonable, but a decade in debt is a very long time, lots of things can change, any reason why you cannot qualify for a debt relief order ?
Rules are changing soon, limit rises to 30k, disposable income threshold of £75 a month, why not look into that, see if you meet the criteria.

You do seem a little naïve on credit file damage limitation, you won`t be repairing your credit on a DMP, once an account defaults, no matter what debt solution you choose, the damage is pretty much done for 6 years, and to be honest, at this point, your credit file should be taking a back seat anyway.

Regarding stepchange and debt management, they will not prioritise one creditor over another, they are part funded by the banks, so a compromise must be sought at some point, if you want to do separate deals, then self management is the way forward.