DMP mutual support thread part 13 !!

Suseka97

Bizz1974 said:

After reading a lot on the forums today, I think I now have a better understanding of the initial process and what I need do. Please can I just check the below;

1. Stop making payments to non-priority debts - this I have done and entered breathing space.
2. Once breathing space has finished continue to not make payments and do not yet go into payment plan. - one question here, do I need to send any letters to creditors to confirm I am in financial difficulty using one of the letter templates or has the breathing space already implied this?
3. Once a default has been registered - I will be notified-write back to offer a monthly payment or use step change.

Thank you

It would be helpful to understand a little more about your financial situation.

You talk about 'defaults' which would suggest that you won't be able to sort out your finances within the 'breathing space' timeframe. 

Bizz1974

Suseka97 said:

Bizz1974 said:

After reading a lot on the forums today, I think I now have a better understanding of the initial process and what I need do. Please can I just check the below;

1. Stop making payments to non-priority debts - this I have done and entered breathing space.
2. Once breathing space has finished continue to not make payments and do not yet go into payment plan. - one question here, do I need to send any letters to creditors to confirm I am in financial difficulty using one of the letter templates or has the breathing space already implied this?
3. Once a default has been registered - I will be notified-write back to offer a monthly payment or use step change.

Thank you

It would be helpful to understand a little more about your financial situation.

You talk about 'defaults' which would suggest that you won't be able to sort out your finances within the 'breathing space' timeframe. 

Hello

I posted the following the other day and got some good advice but I was getting myself confused, so went away to read up some more

I have finally come to the point where I cannot cope with the debts we have built up and realised I need to stop and sort this out. I have been terrified for the past 6 months of the situation and have just been paying things and borrowing straight back. 

Having reached this conclusion and written everything down and come up with a budget with step changes help, I already feel a bit better, now for the questions.

1. I have entered into breathing space already for 60days using stepchange-included in my dmp action plan is my current account overdraft. I have not been able to change the bank account for my salary this month so it will be going into this account-will the bank automatically remove my overdraft, so I cannot use this facility as they will have been notified of the breathing space? Or will this stay in place and I can move salary in time for my next pay day in Feb? If they take away my overdraft I won’t be able to pay my priority bills or living costs
2. I was planning on getting the dmp setup asap but I am now reading it might be better to leave the credit cards until they go to default status, so that the default marker clears after 6 years. To do this, do I just ignore any communication from them after the breathing space ends? This feels scary and like I might get debt collectors on my doorstep. I am also studying to be an accountant (I realise the irony considering some of the terrible choices I have made to get here!), would this method have any negative affect on my job? I would plan to put the money I am not paying into the dmp for this period into a saving account to build up an emergency fund.

I think I entered into the breathing space too quickly as I then found the forums but it’s done now.

At the end of breathing space - I would be in a position to start a dmp but reading the forums it would be better to hold until defaults are registered. 

sourcrates

@Bizz1974, This has been explained many times over the years, but the debt collection process is very slow moving, at any one time there are hundreds of thousands of people who cannot afford there credit repayments, and have to default.

Most debt collectors are based in a call centre, and the average age for this kind of job is around 18-25, you see the jobs advertised "collection agents" or "call centre workers" these are mostly based in the debt collection business.

There are still one or two companies who work door to door, but these are increasingly rare, and only in certain inner city areas, its important to distinguish them from bailiffs, they are not bailiffs, you can simply ignore them, should they call.

You should try and make yourself more aware of the debt collection process, the template letters they send, the order they send them in, the language they use on a call or text, the whole system is geared up to get you to make contact with them, and arrange payment, that is it.

There are so many different scenarios that could come into play here, its impossible to cover every eventuality, your best course of action is to come up with a plan, and stick to it, any problems along the way, ask for advice on here.

That`s the best advice I can give you.

Bizz1974

@sourcrates thanks for the detailed explanation - I will continue to read the debt collection process and the types of letters I will receive. 

I really wanted to know if I need to send any more correspondence once my breathing space ends in 60 days? Or just begin the process of not responding and waiting for the defaults. 

Thank you

sourcrates

Bizz1974 said:

@sourcrates thanks for the detailed explanation - I will continue to read the debt collection process and the types of letters I will receive. 

I really wanted to know if I need to send any more correspondence once my breathing space ends in 60 days? Or just begin the process of not responding and waiting for the defaults. 

Thank you

Its hard to fly in the face of official debt advice, but you are wanting your accounts to default, now if you keep all friendly smiley with your creditors, that`s never going to happen is it, in fact they will probably do anything but default you, thinking they are helping your situation, when really they are not.

To achieve what you want, your best ignoring everything, but obviously keeping an eye on what they send you.

The people you will eventually be dealing with will not be the original creditor, it will be some debt purchasing company or other.

Bizz1974

sourcrates said:

Bizz1974 said:

@sourcrates thanks for the detailed explanation - I will continue to read the debt collection process and the types of letters I will receive. 

I really wanted to know if I need to send any more correspondence once my breathing space ends in 60 days? Or just begin the process of not responding and waiting for the defaults. 

Thank you

Its hard to fly in the face of official debt advice, but you are wanting your accounts to default, now if you keep all friendly smiley with your creditors, that`s never going to happen is it, in fact they will probably do anything but default you, thinking they are helping your situation, when really they are not.

To achieve what you want, your best ignoring everything, but obviously keeping an eye on what they send you.

The people you will eventually be dealing with will not be the original creditor, it will be some debt purchasing company or other.

Great, thank you for your help with this. 

MMPhi123

Hello, I have been on a DMP with PayPlan since May 2021. I have made my payments on time every month and all creditors froze interest and charges (though one has started charging interest again and I need to write to them to tell them nothing has changed for me financially). I'm thinking of going it alone, as I receive late payments letters because PayPlan take so long to send the payments across. For example, my December payment, which went to PayPlan on the 25th December didn't clear with my creditors until 7th Jan. Typically, my payments that go to PayPlan on the 25th of each month will clear for my creditors on the 6th/7th, but it varies. 

If I go it alone, I could just send them all on the 25th and know they'll clear in the next day or so and cut out the middle man. However, are they likely to start up interest and charges if I come away from using PayPlan? That is my worry. I'm currently due to be debt free in April 2024 on my current plan, though as I get incremental pay rises each April, this should decrease. I would also look at full and final payments as I near the end of the plan.

I have Autism and ADHD, and managed to get myself into quite a debt pickle, and then sat on it and it go worse, but I'm determined to get it better.

Any advice gratefully received. Stick at it, or go alone?

sourcrates

MMPhi123 said:

Hello, I have been on a DMP with PayPlan since May 2021. I have made my payments on time every month and all creditors froze interest and charges (though one has started charging interest again and I need to write to them to tell them nothing has changed for me financially). I'm thinking of going it alone, as I receive late payments letters because PayPlan take so long to send the payments across. For example, my December payment, which went to PayPlan on the 25th December didn't clear with my creditors until 7th Jan. Typically, my payments that go to PayPlan on the 25th of each month will clear for my creditors on the 6th/7th, but it varies. 

If I go it alone, I could just send them all on the 25th and know they'll clear in the next day or so and cut out the middle man. However, are they likely to start up interest and charges if I come away from using PayPlan? That is my worry. I'm currently due to be debt free in April 2024 on my current plan, though as I get incremental pay rises each April, this should decrease. I would also look at full and final payments as I near the end of the plan.

I have Autism and ADHD, and managed to get myself into quite a debt pickle, and then sat on it and it go worse, but I'm determined to get it better.

Any advice gratefully received. Stick at it, or go alone?

Hi,

You will be getting late payment letters because your in debt management, and are no longer making the usual contracted repayments you originally agreed too.

The creditor is required to send these notices to you, to comply with your agreement, under the consumer credit act.

Now that your on a DMP, there is no longer a date to pay by every month, your payment`s are processed and paid monthly by payplan.

Its likely you are still receiving these notices because your accounts did not default, so they are essentially still live, and are been treated as "an arrangement to pay" by the creditor instead.

Going self managed won`t change this situation, the only thing that will do so is making written complaints to your creditors stating that all accounts should have been defaulted in line with FCA guidelines.

Under those circumstances all interest and charges stop, and you will no longer receive these letters.

MMPhi123

sourcrates said:

MMPhi123 said:

Hello, I have been on a DMP with PayPlan since May 2021. I have made my payments on time every month and all creditors froze interest and charges (though one has started charging interest again and I need to write to them to tell them nothing has changed for me financially). I'm thinking of going it alone, as I receive late payments letters because PayPlan take so long to send the payments across. For example, my December payment, which went to PayPlan on the 25th December didn't clear with my creditors until 7th Jan. Typically, my payments that go to PayPlan on the 25th of each month will clear for my creditors on the 6th/7th, but it varies. 

If I go it alone, I could just send them all on the 25th and know they'll clear in the next day or so and cut out the middle man. However, are they likely to start up interest and charges if I come away from using PayPlan? That is my worry. I'm currently due to be debt free in April 2024 on my current plan, though as I get incremental pay rises each April, this should decrease. I would also look at full and final payments as I near the end of the plan.

I have Autism and ADHD, and managed to get myself into quite a debt pickle, and then sat on it and it go worse, but I'm determined to get it better.

Any advice gratefully received. Stick at it, or go alone?

Hi,

You will be getting late payment letters because your in debt management, and are no longer making the usual contracted repayments you originally agreed too.

The creditor is required to send these notices to you, to comply with your agreement, under the consumer credit act.

Now that your on a DMP, there is no longer a date to pay by every month, your payment`s are processed and paid monthly by payplan.

Its likely you are still receiving these notices because your accounts did not default, so they are essentially still live, and are been treated as "an arrangement to pay" by the creditor instead.

Going self managed won`t change this situation, the only thing that will do so is making written complaints to your creditors stating that all accounts should have been defaulted in line with FCA guidelines.

Under those circumstances all interest and charges stop, and you will no longer receive these letters.

Thank you for this, yes only one account defaulted. Another account I'm not sure if it defaulted or not? It doesn't say so on my credit report, but it did get passed to Westcot. All the other accounts are 'live' and show a payment due date. Just wish it didn't take so long for PayPlan to send the money across to them especially as bank transfers are instant now. But then I guess there's more admin to it than that. I think I'll stay as I am then, at least it's just one payment per month. But I'll let the creditor who wrote to me know that yes the payments are late, but it's on a DMP and I have no control over when they send the payment, and to take it up with them. I'm kind of glad the accounts aren't defaulting as that stays on your record for 6 years, and we'd like a mortgage at some point...I'm happy to keep paying the debt down, just wish I'd done a DMP sooner! I didn't know it would be so easy, and I was worried about being judged. I wish I'd seen this forum sooner though and taken some breathing space, as I didn't have an emergency fund built up. You live and learn though. Thank you for your help

Suseka97

MMPhi123 said:

sourcrates said:

MMPhi123 said:

Hello, I have been on a DMP with PayPlan since May 2021. I have made my payments on time every month and all creditors froze interest and charges (though one has started charging interest again and I need to write to them to tell them nothing has changed for me financially). I'm thinking of going it alone, as I receive late payments letters because PayPlan take so long to send the payments across. For example, my December payment, which went to PayPlan on the 25th December didn't clear with my creditors until 7th Jan. Typically, my payments that go to PayPlan on the 25th of each month will clear for my creditors on the 6th/7th, but it varies. 

If I go it alone, I could just send them all on the 25th and know they'll clear in the next day or so and cut out the middle man. However, are they likely to start up interest and charges if I come away from using PayPlan? That is my worry. I'm currently due to be debt free in April 2024 on my current plan, though as I get incremental pay rises each April, this should decrease. I would also look at full and final payments as I near the end of the plan.

I have Autism and ADHD, and managed to get myself into quite a debt pickle, and then sat on it and it go worse, but I'm determined to get it better.

Any advice gratefully received. Stick at it, or go alone?

Hi,

You will be getting late payment letters because your in debt management, and are no longer making the usual contracted repayments you originally agreed too.

The creditor is required to send these notices to you, to comply with your agreement, under the consumer credit act.

Now that your on a DMP, there is no longer a date to pay by every month, your payment`s are processed and paid monthly by payplan.

Its likely you are still receiving these notices because your accounts did not default, so they are essentially still live, and are been treated as "an arrangement to pay" by the creditor instead.

Going self managed won`t change this situation, the only thing that will do so is making written complaints to your creditors stating that all accounts should have been defaulted in line with FCA guidelines.

Under those circumstances all interest and charges stop, and you will no longer receive these letters.

Thank you for this, yes only one account defaulted. Another account I'm not sure if it defaulted or not? It doesn't say so on my credit report, but it did get passed to Westcot. All the other accounts are 'live' and show a payment due date. Just wish it didn't take so long for PayPlan to send the money across to them especially as bank transfers are instant now. But then I guess there's more admin to it than that. I think I'll stay as I am then, at least it's just one payment per month. But I'll let the creditor who wrote to me know that yes the payments are late, but it's on a DMP and I have no control over when they send the payment, and to take it up with them. I'm kind of glad the accounts aren't defaulting as that stays on your record for 6 years, and we'd like a mortgage at some point...I'm happy to keep paying the debt down, just wish I'd done a DMP sooner! I didn't know it would be so easy, and I was worried about being judged. I wish I'd seen this forum sooner though and taken some breathing space, as I didn't have an emergency fund built up. You live and learn though. Thank you for your help

I just thought it's worth clarifying that, in terms of your credit file, a default is better than any form of 'arrangement to pay' marker.  The latter stays on your file for 6 years after the debt has been settled, whereas a default stays on for 6 years from the date it was applied, irrespective of whether the debt has been cleared or not.  

As for the idea of a mortgage - whilst having defaults, or any other adverse marker on your file, will have an impact on achieving the better rates from high street lenders, it doesn't rule it out completely.  You just need to find a broker who has experience of adverse credit and the older those defaults are, the better.