DMP mutual support thread part 13 !!

ditty1234

Hi Just coming back to say that just under 3 years into my DMP journey I am now back up to a credit score of 652, while this is not great and I have no intention of loaning anything anymore ever, I just want to share that time and budgeting works wonders, I have managed to save up for citizenship, a family health emergency and just life with university students in general and I am drip feeding my debts and my savings and it is all going in the right direction. With hiccups, but I am on my way. 

sourcrates

dprovan said:

Hi all, i am following this discussion as i am considering a DMP. I have been in debt all my life (49 now), I have never been able to budget- i set a budget of what is to be spent and then use credit cards for most things- that i don't consider to be in my budget- never really properly thinking how these will be paid- always tomorrow or sometime in the future. I struggle to say no to the kids and feel i cant say we cant afford this- they are great kids and would see it as logical to not spend when you don't have the money. The kids are getting older now and semi financially independent and better with money than me thankfully. I have huge unsecured debts 100k. I also have large salary and household income so it is obscene and embarrassing and most of all immature. I have moved credit from card to card for years- however the 0% seem to have dried up for me. Meaning i am currently paying around 30% of my monthly payments on interest. I am thinking i will see how it goes the next month or two when other cards come to the end of the 0%. If i don't have any new 0% offers i think DMP will be inevitable. If the interest could be frozen i could pay a healthy monthly sum and begin to tackle it. Either way whatever path i take - i need to start protecting my money, treating it with respect and budgeting. I need to just use cash now and try to hold onto it more. if i do go down the DMP route is there any advice to prepare. I am feeling quite fragile just now with the realisation of the scale of things so think i need a few weeks to regroup before getting into what is likely to be a demanding process. So far all bills are paid on time with a bit of robbing peter to pay paul- so i have no one banging on the door. Thanks for listening.

I was in a very similar position to yourself, my budgeting skills were terrible, they still are not as good as I`d like them to be, your post will be familiar to many in the same age bracket, historic debt carried over to a new deal every so often, you pay on time every month, but the interest is killing you, and that balance never seems to fall that much.

One thing I must say, is do not be tempted to consolidate that debt, its unlikely you would be able to anyway, but that is the usual next step people tend to take, thinking it will work out for them, well in the majority of cases it doesn't, and they end up with even more debt, if your struggling, its best to admit that as early as possible, as you appear to be doing, and make your plans to move into debt management, under your terms, not some other 3rd party.

Like all things in life, there is a right way, and a wrong way of doing this, I`ll try to explain as simply as possible, presently, a DMP is an informal, unregulated arrangement (unless you live in Scotland) the rest of the UK are supposed to be getting a regulated version of a DMP, but due to covid etc, no roll out date has yet been given.

Creditors are not obliged to stop interest, most will do so, under certain circumstances, but it doesn't always happen, we always advise that its better for you, to have each account default, before you enter debt management, because once defaulted, all interest and charges stop, forever, and the balance is frozen, that way all your monthly payments go to reducing the debt.

Obviously the way to make this happen is non payment, until they default you, yes for most this is the hardest part to swallow, and goes against the grain of what you are used to, but its the only way to avoid problems that you would encounter if you started debt management too early, most use stepchange or one of the other debt charities to administer their DMP, which is fine, but in a lot of cases, the monthly DMP payment can exceed the contractual repayment, so creditors won`t stop interest, and you are no better off, it can take many months of letter writing and complaints in order for them to stop interest, and they won`t always do so.

Then there are arrangement to pay markers on your credit file, again, entering a DMP before defaulting will get you "AP" markers on your credit file, they are best avoided as they stay potentially twice as long as a default does, lots to learn then, you have t o know how to play the game to your advantage, read through this thread, its very long, granted, but it contains all you need to know, also feel free to ask questions you may have.

Good luck.

dprovan

sourcrates said:

Creditors are not obliged to stop interest, most will do so, under certain circumstances, but it doesn't always happen, we always advise that its better for you, to have each account default, before you enter debt management, because once defaulted, all interest and charges stop, forever, and the balance is frozen, that way all your monthly payments go to reducing the debt.

Obviously the way to make this happen is non payment, until they default you, yes for most this is the hardest part to swallow, and goes against the grain of what you are used to, but its the only way to avoid problems that you would encounter if you started debt management too early, most use stepchange or one of the other debt charities to administer their DMP, which is fine, but in a lot of cases, the monthly DMP payment can exceed the contractual repayment, so creditors won`t stop interest, and you are no better off, it can take many months of letter writing and complaints in order for them to stop interest, and they won`t always do so.

Then there are arrangement to pay markers on your credit file, again, entering a DMP before defaulting will get you "AP" markers on your credit file, they are best avoided as they stay potentially twice as long as a default does, lots to learn then, you have t o know how to play the game to your advantage, read through this thread, its very long, granted, but it contains all you need to know, also feel free to ask questions you may have.

Good luck.

Thank you sourcrates- i appreciate it.

I will read the forum and have sometime to do so- i cant face getting on with this just now- i think ill need to get ready and look to act in the new year.

I have done variations of the consolidation before so I agree its a no no and as you also say in reality i don't think i currently have options there just now.

I hadn't realised i would be better to default- as you say that feels hard- i have never missed a payment ever! If I default on each debt- am i reading correctly that the company must freeze interest?

Some of my debts are with my own bank- so should i change bank account that my pay goes into first.

I have filled in the step change form so i am part of the way along the journey. At the back of my head i am also thinking that if i struggle on for 6 months and pay down the debt (not as fast as i would if interest was frozen) maybe the 0% deals will come back (they always have in the past- part of the problem) to allow me to manage it myself. I know the risk here is that i don't learn.

thank you for taking the time i do appreciate it

sourcrates

It is about obtaining a different mindset, and yes, non payment is alien to most of us, however, you have to keep your ultimate goal in mind, you want interest to stop, and the only way guaranteed to do that is to have your accounts default.

When an account defaults, it means the relationship between the borrower, you, and lender, them, has ended.

You will get what`s known as a "default notice", a document required to be sent by law, which details the breach to your account, how to remedy it, and by when, and the consequences if you don`t follow these actions, it goes on to list what "could" happen as a result.

Note I say what "could" happen, not what will happen, the usual procedure once an account defaults is that its either passed through various debt collection companies, or it is sold on.

Debts are bought and sold all the time, its quite likely your accounts will be sold too, so you won`t be making payment arrangements with your original creditor, it will be another new company entirely, some of the biggest names in the debt purchasing industry are Lowell/Cabot/PRA Group etc etc.

So this is the point you start your debt management plan, any sooner you risk interest not being stopped, any later, and you risk legal action, and on your other point, never bank where you have debts, a new basic bank account is an essential first step, make sure its not with an associated bank to your own.

LexieLou

Hello Lovey People,

I'm on a DMP and have been for the last 3 years, only missed one payment, due to an admin error on my part.  It looks like I will have all my debts paid in full in June 2022.  That will be the full balance and not any F&F offers.  

Do I - ask for F&F offers or pay in full as I would like to use a large amount of money to get a small mortgage for a house.

I'm worried, a) I won't get a mortgage and b) what impact the F&F will have?

Some words of wisdom would be great right now

Thanks

LL xx

Suseka97

LexieLou said:

Hello Lovey People,

I'm on a DMP and have been for the last 3 years, only missed one payment, due to an admin error on my part.  It looks like I will have all my debts paid in full in June 2022.  That will be the full balance and not any F&F offers.  

Do I - ask for F&F offers or pay in full as I would like to use a large amount of money to get a small mortgage for a house.

I'm worried, a) I won't get a mortgage and b) what impact the F&F will have?

Some words of wisdom would be great right now

Thanks

LL xx

Generally the advice for prepping for F&Fs is to send CCA requests to whoever holds the debt (I'm making an assumption that yours are now with a DCA).  What this does is two-fold - firstly, when you send CCA requests the debt holder will put your account on hold whilst they attempt to provide the requisite documents and during that time you stop sending them any payment.  That allows you time to build on your F&F pot.  Secondly, if the DCA is unable to provide the requisite documentation, then the account is deemed unenforceable and if that happens it gives you greater bargaining power with the F&F offer.

An F&F will have no impact on anything - other than to show your account/s as  'partially satisfied' on your credit report.  But given you are in a DMP, then your credit file will already have been damaged by the defaults which will remain on your file for 6 years from the date they were applied.  This will affect your ability to get a mortgage from a high street lender, but its not impossible and you are best advised to speak with a whole of market broker who has experience with adverse credit.

LexieLou

Suseka97 said:

This will affect your ability to get a mortgage from a high street lender, but its not impossible and you are best advised to speak with a whole of market broker who has experience with adverse credit.

Thank you!  

Llxx 

nbamaster

Hello everyone,

My debt is about £25k with 5 different creditors.

As I was advised in this forum I have cancelled my direct debits at the end of July 2021 in order to get defaults on all of my debts before I proceed with DMP through StepChange.

At the moment 2 out of 5 accounts are in default  the other 3 are in arrears (4 months behind with payments).

Tesco bank credit card debt which is in arrears apparently have been to Moorcroft. Does it mean it defaulted as well? 

Is there anything I should do at the moment? Do I have to get in touch with Moorcroft at all?  Or should I wait for all my debts to be in default first before I take any action and apply for DMP? 


Thank you,

HelenM05

Update on my cca requests, PRA have sent the £1 cheques back as they cannot currently trace the CCA's on all 4 accounts, they are trying to obtain these from the original creditor (all egg cards) but until they do all debts are unenforceable. Same response from Cabot for 2 old Northen Rock loans and from Debt Managers for an old Citibank credit card. The others haven't responded yet and it's been more than 12 days. The DMP is via Stepchange and the payment has been taken as usual today. We've been on the DMP for over 10 years and have already paid back over £80,000. We've tried offering f&f settlements but most of them aren't being fair or refusing to even negotiate this. What do we do now? Should we cancel the DMP with Stepchange and see what happens? Any genuine, helpful advice will be appreciated. TIA 🙂

Suseka97

HelenM05 said:

Update on my cca requests, PRA have sent the £1 cheques back as they cannot currently trace the CCA's on all 4 accounts, they are trying to obtain these from the original creditor (all egg cards) but until they do all debts are unenforceable. Same response from Cabot for 2 old Northen Rock loans and from Debt Managers for an old Citibank credit card. The others haven't responded yet and it's been more than 12 days. The DMP is via Stepchange and the payment has been taken as usual today. We've been on the DMP for over 10 years and have already paid back over £80,000. We've tried offering f&f settlements but most of them aren't being fair or refusing to even negotiate this. What do we do now? Should we cancel the DMP with Stepchange and see what happens? Any genuine, helpful advice will be appreciated. TIA 🙂

Yes, you should end the DMP with Stepchange and start the waiting game regards F&Fs. 

A DCA doesn't have to accept offers and if you carry on paying via the DMP, why would they?  So, you need to stop making any further payments and start saving funds to build up on your F&F pot.  

I would leave the UE ones be for at least 6 months or so and then start making offers again - although I should add that I have 2 x UE accounts held by PRA which have been UE for over 2 years and they are still not making good enough offers.  Note, they are making the offers now which I am ignoring until it reaches an amount I'm willing to pay  

As for the 12 day timeframe for a CCA response, that's just a guide and in reality it takes many months for a DCA to respond in most cases.