DMP mutual support thread part 13 !!

Remus1975

Hi all, 

I've been in a DMP for a year started whilst I was a homeowner and all going smoothly so far. I've seperated with my partner and need to find somewhere to rent. I've been successful in being offered a property but now the letting agent want to do the various checks including a credit check.

Will my DMP show up on this check? When I filed in the application form it asked if i had any adverse credit such as Bankcrupcy, CCJ, IVA to which I said no as I don't have any of those. 

Be gutted for it to fall over at the last hurdle as its took me a while to actually get a viewing and get accepted for a property. Most applications are just ignored by the letting agents.

Has anybody been in the same position.. how did the credit check go for you whilst in a DMP?

Thanks

sourcrates

Remus1975 said:

Hi all, 

I've been in a DMP for a year started whilst I was a homeowner and all going smoothly so far. I've separated with my partner and need to find somewhere to rent. I've been successful in being offered a property but now the letting agent want to do the various checks including a credit check.

Will my DMP show up on this check? When I filed in the application form it asked if i had any adverse credit such as Bankruptcy, CCJ, IVA to which I said no as I don't have any of those. 

Be gutted for it to fall over at the last hurdle as its took me a while to actually get a viewing and get accepted for a property. Most applications are just ignored by the letting agents.

Has anybody been in the same position.. how did the credit check go for you whilst in a DMP?

Thanks

As a DMP is an informal arrangement, it in itself will not show on any credit search, however, the arrangement to pay markers, and/or defaults associated with your debts, will show on your file.

Now it will depend if the letting agent just does what`s known as a "landlord check" basically just checking your identity, or a full blown credit check, which will show all your credit information.

They can do either, or both, it will depend on there own policy.

uonsjc31

Hello all,

After much stress and overthinking I have been looking at the route of a SC DMP plan. After reading the thread for a few days I am now unsure whether I should go this route.

I have taken the advice to stop DD's asap. Early days and I haven't had to deal with any creditors just yet.

I just wanted to have a plan of action and just want to confirm this is the correct way to go:

1. Cancel Direct debits
2. Wait until payments missed, expect a phone call or letter
3. Write to explain situation, seeking advice from a DMP provider
4. Continue to hold for possibly many months
5. Log any correspondence
6. I will know if I've defaulted as i'll likely get a default notice, possibly from an agency
7. Write to agency to explain situation and make an offer of monthly payment?
    OR Speak with SC to set up a DMP

And that's as far as I've got.

The crippling interest has kept me in a spiral of debt for years and it's only gotten worse as I've had to rely on credit. I pay more out than I earn and this level of unsustainability will ruin me if I don't take action now. I want my life back!

I have another bank account I can use for wages etc as I also have an OD with current bank.

My debt is close to 50k from multiple PL's and CC's, largest being an 8.6k CC.

My problem is I am already very near credit limits on CC's so missing the next 1-2 payments will put me over the limit and it just worries me I'll just keep getting interest added and at some point down the line my self managed or SC DMP will fail.

I've done a lot of reading on the matter, yet I feel some gaps in knowledge. I'm sure the worse bit is taking the initial step. But like I say, I've been in a trap for years and I do not see any light at the end of this incredibly long tunnel.

I'm a mortgaged home owner and soon to be father. This debt needs to end!

Thanks for taking the time to read, it is greatly appreciated

Suseka97

uonsjc31 said:

I just wanted to have a plan of action and just want to confirm this is the correct way to go:

1. Cancel Direct debits
2. Wait until payments missed, expect a phone call or letter
3. Write to explain situation, seeking advice from a DMP provider
4. Continue to hold for possibly many months
5. Log any correspondence
6. I will know if I've defaulted as i'll likely get a default notice, possibly from an agency
7. Write to agency to explain situation and make an offer of monthly payment?
    OR Speak with SC to set up a DMP

Yep, these are pretty much the basic steps to take to get things up and running, when you write you should state that all future correspondence must be in writing only and if you start getting calls after doing that, just block the number.  It will take time before your accounts default, so step 4 is important even though it might be tempting to jump into a DMP sooner rather than later.  It's a rookie error, so am glad you are aware of the need to hold out for the defaults you need.

I have another bank account I can use for wages etc as I also have an OD with current bank.

I take it your overdraft will form part of the DMP, I don't think overdrafts can be defaulted (its not a consumer debt as such) but it can be included in a DMP.  I'd sort out moving your wages and any essential DDs to the other bank account (assuming its not related to any of your other debts) before you send them any correspondence about your plans and don't use the switching service - do so manually.

My problem is I am already very near credit limits on CC's so missing the next 1-2 payments will put me over the limit and it just worries me I'll just keep getting interest added and at some point down the line my self managed or SC DMP will fail.

You will have to accept that in the first few, maybe more, months you will get charges and interest applied to your debts, that's inevitable really.  Eventually debts will either default (stopping interest and charges) and if any don't you have to get tough and complain about it.   When I started my DMP journey, many moons ago, it was a bit of a battle to get creditors to default, but nowadays I think creditors are more willing to work with people and the speed at which they hand accounts over to their debt collections dept. or sell off to a debt purchasing company, is far quicker than in my day.  

A DMP will only 'fail' if you make your budget too strict and don't save an emergency fund to cover those unexpected expenses.  With that said, if a major expense lands at some point in the future and you don't have sufficient funds to cover it, you can always suspend your DMP for a period of time.  The beauty of a DMP is that it is an informal arrangement, unlike bankruptcy and IVA, and if you self-manage you have far more control over it.

Everyone has to start somewhere and it can be daunting, but having a plan and understanding the process is key and from what I've read it looks like you are in a good place to start working towards your debt freedom.  Good luck  

uonsjc31

@Suseka97

Many thanks for your quick and clear response. I need to have a plan in place before I tackle anything and your response has given me the confidence to go forward with this.

I find tackling debt to be difficult, but I find talking about it to be the biggest challenge. To have somewhere to speak to someone freely, it helps a lot. I recommend this thread to anyone who is trying to make their first steps. You are not alone.

My next journey will be learning how to communicate with creditors. I am not scared. I am taking back control of my own life!

debtfreeme2021

@uonsjc31 - hi there I’m at the very start of my journey just like yourself. Ive cancelled my DD’s and now started this month to build up an emergency fund. Ive written to my creditors and sent the National Debt Helpline letters last month , received correspondence from most advising they will hold interest and charges for 30 days . Now in the waiting game for the defaults . Having not shared with anyone my position  this group has been a bit of a lifeline so thanks all for your advice and support. The hardest thing for me has been not communicating when the phone rings, ive asked all communication to be in writing but Very keep ringing and sending me texts . I guess it is to be expected . When I sent my template letters it stated - I will contact you again as soon as I can with further details of my financial situation and my proposals for dealing with debts.  I wasn’t sure when I should contact and what I should share I now understand to wait for the default . In terms of the remaining disposable income to pay debts in a self managed plan does every share equally across all debts or do you allocate a specific % . I think step change share across all debts ?? Thanks 🙏 

uonsjc31

Am I correct in thinking that I should NOT cancel a direct debit for a loan with a creditor with whom I have a mortgage with yet? Or should I just go ahead and cancel

Also a loan that I have with my current bank account provider? (I think this was answered previous by @Suseka97)

Many thanks

Suseka97

uonsjc31 said:

Am I correct in thinking that I should NOT cancel a direct debit for a loan with a creditor with whom I have a mortgage with yet? Or should I just go ahead and cancel

Also a loan that I have with my current bank account provider? (I think this was answered previous by @Suseka97)

Many thanks

The reason we advise not to cancel direct debits for loans or CC's that you have with your current bank account provider,  until you have set up a clean bank account, is to avoid the possibility that they might use the right to offset - although in truth this rarely happens.  However the advice is its better to be safe than sorry.  

So, as I mentioned, I'd move your salary and essential bills over to the clean bank account before you cancel your DD for the loan with your current bank.  It may mean you continue paying that one for a bit, but you can cancel all the others that are not associated with your bank account.

Hopefully @fatbelly or @sourcrates will be along to comment re the Mortgage query - I have no experience here, none of my debts were linked to my mortgage provider.

sourcrates

uonsjc31 said:

Am I correct in thinking that I should NOT cancel a direct debit for a loan with a creditor with whom I have a mortgage with yet? Or should I just go ahead and cancel

Also a loan that I have with my current bank account provider? (I think this was answered previous by @Suseka97)

Many thanks

You are bound to get interest and further charges added during the "phoney war" period, until you get defaulted.

There`s not a lot you can do about that to be honest, the only "silver lining" is further down the line, when you may be in a better position to make settlement offers, you should be able to save more than what has been added in interest/charges etc, by settling the debts for a big discount.

Debt purchasing companies will nearly always be open to settlement deals.

As for the loan with your mortgage provider, first make sure your clean bank account is up and running, your mortgage and your loan are two separate financial products, as long as the mortgage is still paid on time, and in full, then the fact the loan may default won`t have any bearing on the mortgage, although come renewal time, you may struggle if you require a credit check, but most homeowners on DMP`s use a good broker, and manage to get something sorted out, it may not be the best deal, but it will be something.

uonsjc31

@sourcrates
Many thanks for the advice! As i've woken this morning, I can't help but feel like I should be sending letters right away to my creditors, using the 'Hold Action' template found on National Debt helpline. An advice on this would be greatly appreciated. Thanks again!