DMP mutual support thread part 13 !!

Blackberrypie_3

I wonder if someone may be able to give me some advice, please. 

I have several debts in a DMP with SC. All of these have defaulted apart from a Virgin CC which was in arrears. However, Virgin sent me a letter last week to let me know that, as I have been making minimum payments, my account is now up to date (despite my payments from SC being below the minimum monthly payment required on my statements) My credit file has been updated to show it is now an active creditor instead of in arrears. 

How should I best handle this? At the current payment rate, this debt should hopefully be paid off in 2 years. Should I push for a default with them? I feel that I have read on here that APs or similar stay on my file from date of settlement rather than, in the case of defaults, the date they defaulted. Although 2 years isn't that huge a difference, I would rather get these off sooner rather than later. 

What is the best way to proceed? 

sourcrates

Blackberrypie_3 said:

I wonder if someone may be able to give me some advice, please. 

I have several debts in a DMP with SC. All of these have defaulted apart from a Virgin CC which was in arrears. However, Virgin sent me a letter last week to let me know that, as I have been making minimum payments, my account is now up to date (despite my payments from SC being below the minimum monthly payment required on my statements) My credit file has been updated to show it is now an active creditor instead of in arrears. 

How should I best handle this? At the current payment rate, this debt should hopefully be paid off in 2 years. Should I push for a default with them? I feel that I have read on here that APs or similar stay on my file from date of settlement rather than, in the case of defaults, the date they defaulted. Although 2 years isn't that huge a difference, I would rather get these off sooner rather than later. 

What is the best way to proceed? 

Hi Blackberrypie_3,

Unfortunately you have made the classic debt free wannabe mistake of starting debt management too soon, before all your accounts were defaulted, once defaulted all interest charges etc stop, your credit file is marked as "default", and you know you then have a clear 6 year window till its all gone.

If you start a DMP too early, this is one, of the problems you tend to encounter.

So what can you do now ?

Well if your plan is expected to be over in two years, then your debt cannot have been that great, so in your case its maybe best to let sleeping dogs lie, learn your financial lessons, and allow time to clear your credit file.

There is no point now pushing for a default that will last longer than your DMP.

Blackberrypie_3

sourcrates said:

Hi Blackberrypie_3,

Unfortunately you have made the classic debt free wannabe mistake of starting debt management too soon, before all your accounts were defaulted, once defaulted all interest charges etc stop, your credit file is marked as "default", and you know you then have a clear 6 year window till its all gone.

If you start a DMP too early, this is one, of the problems you tend to encounter.

So what can you do now ?

Well if your plan is expected to be over in two years, then your debt cannot have been that great, so in your case its maybe best to let sleeping dogs lie, learn your financial lessons, and allow time to clear your credit file.

There is no point now pushing for a default that will last longer than your DMP.

Thanks so much, Sourcrates.

I managed to hold out for 5 months before starting the DMP and I guess I then chickened out! 

I suppose my concern is that, if I have understood this correctly, the Agreement to Pay will be 6 years from the date of settlement, meaning I have it on my file for the next 8/9 years (assuming the debt takes 2-3 years to clear) as opposed to my defaults which should come off in 6 years' time.

Therefore this one will be lasting longer than both my DMP and defaults. Is it just something I should live with, as you say, rather than pushing for this to come off as soon as possible? I appreciate it is not a significant time difference but would rather not have it hanging around if I can shorten the time now. 

Thank you for all your help and advice

Suseka97

Blackberrypie_3 said:

sourcrates said:

Hi Blackberrypie_3,

Unfortunately you have made the classic debt free wannabe mistake of starting debt management too soon, before all your accounts were defaulted, once defaulted all interest charges etc stop, your credit file is marked as "default", and you know you then have a clear 6 year window till its all gone.

If you start a DMP too early, this is one, of the problems you tend to encounter.

So what can you do now ?

Well if your plan is expected to be over in two years, then your debt cannot have been that great, so in your case its maybe best to let sleeping dogs lie, learn your financial lessons, and allow time to clear your credit file.

There is no point now pushing for a default that will last longer than your DMP.

Thanks so much, Sourcrates.

I managed to hold out for 5 months before starting the DMP and I guess I then chickened out! 

I suppose my concern is that, if I have understood this correctly, the Agreement to Pay will be 6 years from the date of settlement, meaning I have it on my file for the next 8/9 years (assuming the debt takes 2-3 years to clear) as opposed to my defaults which should come off in 6 years' time.

Therefore this one will be lasting longer than both my DMP and defaults. Is it just something I should live with, as you say, rather than pushing for this to come off as soon as possible? I appreciate it is not a significant time difference but would rather not have it hanging around if I can shorten the time now. 

Thank you for all your help and advice

If I'm reading this correctly - you now have an account that isn't defaulted which is still with Virgin and they have changed its status to active (you say) in which case its not quite the same as AP or AR as such, but the end result is the same of course in terms of how long it'll stay on your credit file.  I ask this because if it's now reverted to an active account, are they likely to start charging interest?    

Like many others, when I launched into a DMP back in 2013, I wasn't aware of the best way to handle things (by getting defaults) before jumping in.  As a result I had 2 accounts with Barclaycard who refused to default me and eventually the amounts they started to receive were the same as a minimum payment and they started charging interest, albeit at a much lower rate than the standard % at the time.  I then had quite a battle to get them to stop and I eventually managed to get a backdated default, although it was only backdated by around 12 months, when the DMP had been running for almost 2 years by then.  So it is doable, but will take a bit of effort on your part.   As a side note - many years later, post DMP, I was given a refund from BC because they said that 'on review' they feel they did not treat me fairly and refunded a whole bunch of interest charged (with simple interest applied to that) - bonus!!

nbamaster

Hi everyone,

I have opened another bank account and cancelled all DDs and stopped paying CCs in order to build EF (for 6 months), and then ask Step Change to help me with DMP.

I was advised not to make any token payments, so my debts can be defaulted sooner.
But I am not sure if I should send out holding letters, asking my creditors for a few months time and to only contact me via post, or just completely ignore them until I'm ready to start DMP? 

Any advice would be appreciated.

Thank you

Suseka97

nbamaster said:

Hi everyone,

I have opened another bank account and cancelled all DDs and stopped paying CCs in order to build EF (for 6 months), and then ask Step Change to help me with DMP.

I was advised not to make any token payments, so my debts can be defaulted sooner.
But I am not sure if I should send out holding letters, asking my creditors for a few months time and to only contact me via post, or just completely ignore them until I'm ready to start DMP? 

Any advice would be appreciated.

Thank you

It's true that token payments are a waste of time, so don't bother with them - but I would advise you to contact your creditors to let them know you are in financial difficulty and seeking the advice from StepChange.  You don't really have to give them any sort of timeframe, just say you will be back in touch in due course and also that you want all communications to be carried out in writing from now on.  

Cpfc1234

Hi there first post. I currently have 27.5k in cc and loan debt. I just opened a separate bank account that's not linked and after reading on here I see that getting an emergency fund up together by cancelling payments and contacting them. Are there letters to send or do you call. When do you stop the payments and what do you say? Any advice greatfully received. Many thanks in advance.

Suseka97

Cpfc1234 said:

Hi there first post. I currently have 27.5k in cc and loan debt. I just opened a separate bank account that's not linked and after reading on here I see that getting an emergency fund up together by cancelling payments and contacting them. Are there letters to send or do you call. When do you stop the payments and what do you say? Any advice greatfully received. Many thanks in advance.

Yes, an emergency fund is key, as is making sure your accounts are defaulted before you launch into a DMP.  It's best to handle everything in writing from now on and make that clear when you contact them.  Just write and keep things simple, let them know you are in financial difficulty and you are working with one of the debt charities to help you resolve the situation .  Tell them you will be in touch in due course and leave it at that.

You can stop making payments on any debt that is not linked or associated to your bank account now, but wait to cancel payments to any linked debts until your new bank account is up and running and you've arranged for your wages to go to the new account.

What you should bear in mind is the wheels of debt collection turn slowly, and I'd suggest even more so now given all the people that have likely fallen behind or now cannot service their debts due to Covid, being on furlough or loss / reduced incomes.   You are just one in many, unfortunately.

Blackberrypie_3

Suseka97 said:

If I'm reading this correctly - you now have an account that isn't defaulted which is still with Virgin and they have changed its status to active (you say) in which case its not quite the same as AP or AR as such, but the end result is the same of course in terms of how long it'll stay on your credit file.  I ask this because if it's now reverted to an active account, are they likely to start charging interest?    

Like many others, when I launched into a DMP back in 2013, I wasn't aware of the best way to handle things (by getting defaults) before jumping in.  As a result I had 2 accounts with Barclaycard who refused to default me and eventually the amounts they started to receive were the same as a minimum payment and they started charging interest, albeit at a much lower rate than the standard % at the time.  I then had quite a battle to get them to stop and I eventually managed to get a backdated default, although it was only backdated by around 12 months, when the DMP had been running for almost 2 years by then.  So it is doable, but will take a bit of effort on your part.   As a side note - many years later, post DMP, I was given a refund from BC because they said that 'on review' they feel they did not treat me fairly and refunded a whole bunch of interest charged (with simple interest applied to that) - bonus!!

Thank you Suseka, I really appreciate the response. 

It must have been very satisfying to get that default and refund - what a result! Sounds like it was an uphill battle to get there though and pretty frustrating at the time. 

That is a very good point about the interest, however. I checked my June statement and none had been applied so I guess I will just keep an eye on that.

The letter I received from Virgin says that they have decided to bring my account up to date, that my credit file will no longer show this account being in arrears but will continue to reflect that I am on a payment plan (which is why I assumed an AP status). The credit score site that I use just shows it as "active" for now, but this may change. 

I think, following yours and Sourcrates' advice, I will see what happens with it over the next few months then either push for a default or let sleeping CC debts lie, depending on the status of the interest. 

I really appreciate this forum and all the advice (and honestly don't know what I would have done if I hadn't discovered it last year!) Thanks for all your help! *insert beer emoji here* 

Cpfc1234

Suseka97 said:

Cpfc1234 said:

Hi there first post. I currently have 27.5k in cc and loan debt. I just opened a separate bank account that's not linked and after reading on here I see that getting an emergency fund up together by cancelling payments and contacting them. Are there letters to send or do you call. When do you stop the payments and what do you say? Any advice greatfully received. Many thanks in advance.

Yes, an emergency fund is key, as is making sure your accounts are defaulted before you launch into a DMP.  It's best to handle everything in writing from now on and make that clear when you contact them.  Just write and keep things simple, let them know you are in financial difficulty and you are working with one of the debt charities to help you resolve the situation .  Tell them you will be in touch in due course and leave it at that.

You can stop making payments on any debt that is not linked or associated to your bank account now, but wait to cancel payments to any linked debts until your new bank account is up and running and you've arranged for your wages to go to the new account.

What you should bear in mind is the wheels of debt collection turn slowly, and I'd suggest even more so now given all the people that have likely fallen behind or now cannot service their debts due to Covid, being on furlough or loss / reduced incomes.   You are just one in many, unfortunately.

To be fair I've been in a pickle for a while moving stuff about and managed to clear 15k but I can no longer move anything to interest free. I don't suppose there are templates to send to the companies? Thank you for your advice