DMP mutual support thread part 13 !!

Suseka97

debtfreeme2021 said:

Hello . Reading the above comment I had no idea that an arrangement to pay would stay on my file for 6 years after the debt had been paid. Currently waiting for all accounts to default since I stopped payments in September . I have one arrangement to pay marker but I was told by Tesco (who also stopped interest) that this would drop off my file when paid ?? Do different organisations have different rules for arrangement to pay. I’ve not set up any others but wondered if I should stop paying and let this one default also? Thank you 

I think you are being misled by Tesco and perhaps its an innocent error on their behalf, I doubt whoever the CS person you spoke with actually understands how these things work.  I guess if Tesco were to agree to remove any adverse markers on your file once paid, that would change things, but I can't see that happening in practice.

An arrangement to pay is definitely going to impact your credit file far longer than a default - think of it this way.  Say you have. a debt that's on an arrangement to pay from 2022 and it'll be 2025 before its paid (so 3 years in total, although generally DMPs last significantly longer).  The adverse marker will stay on your file until 2031 - so in total it will have had an adverse impact on your file for 8 years.  However, if that debt was defaulted in 2022 it will fall off in 2028, some 3 years sooner than the AP one.

This is why people are encouraged to push for defaults - but that advice is contained to those on DMPs who are most likely to be on the plan for many years to come, not people who are having a slight 'blip' with their finances and can get themselves back on track reasonably quickly.  Having an AP or AR marker for just a few months and then being able to get back on track with contractual payments is entirely different - those entering into DMPs are people whose finances are well beyond recovery in that respect.

Suseka97

MMPhi123 said:

MMPhi123 said:

Suseka97 said:

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.

Ah I did not know this at all, I am really struggling with the idea of not paying and letting things default. I've not missed any payments ever, the thought of doing so is quite frightening. I'm planning on having the debt potentially paid off end of next year, if not very early '24, but from what you're saying, when I get the debt paid off is almost irrelevant, as I will still have that mark against my name 6 yrs after it's been paid off? Where as if I get a default registered now, it will start the ball rolling and would only be on a few years once the debt is cleared?

I suppose I first need to check if any of my accounts are showing as 'arrangement to pay', if they're not, then I ought to carry on as I am and get everything cleared quickly, then there's just potentially the one default (Though I can't even see the account on my report!). If they're under arrangement to pay, my next step would be to request a default? To do that I would just write a letter? Or would I need to come off my payment plan and go self managed, ask for breathing space and just stop paying until they default?

Further to this it looks like I have one account on 'arrangement to pay' (Very)

2 are defaulted (Natwest Loan now with Westcot and Barclaycard)

Halifax, Fluid, Tesco CC's are all live.

I have to say I'm a little bemused, seeing that you are in a DMP with PayPlan, that 3 of your debts are 'live' - which I assume means your contractual payments are up to date.  Is that what you mean?  If so, have they frozen interest and charges?

I will say that Very are renowned for holding out against defaults and if I were being cynical I would say its because they know it suits the debtor to get a default, and by holding out they are hoping you'll prioritise them and clear your debt sooner.  If I had a debt with Very I'd simply not pay them a darn penny until they defaulted the account... but that's just me

Is there a reason you're wanting to get things 'cleared quickly', as you say?  If you are wanting to get a mortgage in the near future, as I've said... it's not out of the question, but it does depend on your urgency or circumstances.  If it were me I'd wait things out until maybe your defaults are a few years old and then use a broker to assess the best lending options based on your financial status at that time.  If its a remortgage, then its pretty easy to stay with the same lender and swap rates etc.

AndersS

Hi everyone! Newbie here! 

I’m currently working my way through previous posts in this thread to avoid asking all the questions that others have already, but in the meantime I wanted to say hi!

I’m days away from my first missed payment, after years of struggling to protect my credit score (hoping to get a mortgage). The panic really set in yesterday when I opened my eyes to reality that I’m maxed out and can no longer borrow again and again to keep my head above water. Yep I’ve buried my head in the sand for quite some time now!

I’m slowly coming to terms with the impact that these missed payments will have, but still terrified of the consequences that may come with it if my financial situation doesn’t improve. I’m catastrophising, I know, but the thought of people knocking on my door (debt collectors/bailiffs) scares the living daylights out of me and even the thought of constant letters and phone calls is enough to really set my anxiety off. 

I guess I’m looking for reassurance amongst fellow debt-free wannabes. I’m finding that those around me just don’t get it. It’s very lonely and I’m feeling deep shame that I’ve let things get this out of control. I’m hoping that the things I’m worrying about are very far off and that there is a way out of this. 

Any words of encouragement will be greatly received. 

Thank you in advance

AnderS

Vaninja

HelenM05 said:

Hi, we've been paying our debts through a DMP with SC for about 11 years. The debts started off at a massive  £116,000 and to date we have paid over £85,000 back leaving approximately £35,000 to pay. We have managed to raise approximately 50% of the outstanding amount and sent F&F settlement offer letters to the existing debt companies. We thought that give we have paid back such a large amount and never missed a payment during the 11 years of the DMP that these companies would be happy to accept settlement offers but this is not the case. The only company playing ball is Cabot, PRA group and Idem securities don't want to know. Is it worth sending CCA requests to idem and PRA? The PRA accounts were egg cards taken out before 2003.  If they can't produce the cca,s can we refuse to pay them anymore if they won't agree on a f&f settlement?  No sarcasm please I'm asking for advise from people with similar experiences and I know that these companies are not obliged to accept full and final settlements. TIA 🙂

Hi Helen. What has your experience been like with Cabot.  Im in a similar siutation. I've started the ball rolling with Cabolt, they have offered 75%.

sourcrates

AndersS said:

Hi everyone! Newbie here! 

I’m currently working my way through previous posts in this thread to avoid asking all the questions that others have already, but in the meantime I wanted to say hi!

I’m days away from my first missed payment, after years of struggling to protect my credit score (hoping to get a mortgage). The panic really set in yesterday when I opened my eyes to reality that I’m maxed out and can no longer borrow again and again to keep my head above water. Yep I’ve buried my head in the sand for quite some time now!

I’m slowly coming to terms with the impact that these missed payments will have, but still terrified of the consequences that may come with it if my financial situation doesn’t improve. I’m catastrophising, I know, but the thought of people knocking on my door (debt collectors/bailiffs) scares the living daylights out of me and even the thought of constant letters and phone calls is enough to really set my anxiety off. 

I guess I’m looking for reassurance amongst fellow debt-free wannabes. I’m finding that those around me just don’t get it. It’s very lonely and I’m feeling deep shame that I’ve let things get this out of control. I’m hoping that the things I’m worrying about are very far off and that there is a way out of this. 

Any words of encouragement will be greatly received. 

Thank you in advance

AnderS

Well first off, welcome to the forum, what you are experiencing is very common amongst 1st time defaulters (I never missed a payment in over 25 years until circumstances dictated otherwise) let me try to re-assure you that all the "bad things" you are expecting to happen almost instantly..........won`t probably happen at all.

I will try and condense this advice, as I could quite literally carry on forever here, its important to realise that debt collection has a structure, and also a process that is followed, debt collectors very rarely knock on doors these days, and bailiffs can only be instructed once the creditor has obtained a court order allowing their use, all of this is light years away from where you are now, please try and read up on the debt collection process, there are a lot of common mis-conceptions that folk still think happen.

There is a great piece of legislation called the General Data Protection Regulation, which basically means you can choose how you are contacted, post/phone/text/email, you can opt out of one or all, although you will still get some letters, but that is what the recycle bin is for.

If its your intention to enter debt management, then its a route well recognised by creditors, and all you have to do is keep the creditors informed of what you are doing, take advice from one of the free to use debt charities, debt management is just another process, that allows you to repay what you owe, at a lower monthly rate, hopefully with interest stopped, so concentrate on the positives of that, and not on the negative side.

There is absolutely no need to be afraid or anxious about any of this, its just another way to deal with your debts, a walk in the park.

debtfreeme2021

Suseka97 said:

debtfreeme2021 said:

Hello . Reading the above comment I had no idea that an arrangement to pay would stay on my file for 6 years after the debt had been paid. Currently waiting for all accounts to default since I stopped payments in September . I have one arrangement to pay marker but I was told by Tesco (who also stopped interest) that this would drop off my file when paid ?? Do different organisations have different rules for arrangement to pay. I’ve not set up any others but wondered if I should stop paying and let this one default also? Thank you 

I think you are being misled by Tesco and perhaps its an innocent error on their behalf, I doubt whoever the CS person you spoke with actually understands how these things work.  I guess if Tesco were to agree to remove any adverse markers on your file once paid, that would change things, but I can't see that happening in practice.

An arrangement to pay is definitely going to impact your credit file far longer than a default - think of it this way.  Say you have. a debt that's on an arrangement to pay from 2022 and it'll be 2025 before its paid (so 3 years in total, although generally DMPs last significantly longer).  The adverse marker will stay on your file until 2031 - so in total it will have had an adverse impact on your file for 8 years.  However, if that debt was defaulted in 2022 it will fall off in 2028, some 3 years sooner than the AP one.

This is why people are encouraged to push for defaults - but that advice is contained to those on DMPs who are most likely to be on the plan for many years to come, not people who are having a slight 'blip' with their finances and can get themselves back on track reasonably quickly.  Having an AP or AR marker for just a few months and then being able to get back on track with contractual payments is entirely different - those entering into DMPs are people whose finances are well beyond recovery in that respect.

Thanks @Suseka97 my budget  is still taking some fine tuning but based on reasonable budgeting plus taking into account inflation I think my self managed plan will take me 6-7 years to resolve until I’m debt free . With this in mind and taking note of the above I will look to default on this account also. As I have decided to go self managed and not enter a DMP with step change , I wanted to ask about income and expenditure requests when my debts eventually default. Do debt collection agents request this for the full household , these debts are in my name and not shared but I am living with a partner and we do share bills and a mortgage . Thanks every so much for the ongoing advice and support this page has been amazing . 

Hols2021

Thanks for explaining that step by step for me Sourcrates, much appreciated. We have contacted all our creditors now by phone and they have given us the 30 days but Capital one gave us 60 and said they would hold all interest, i told them i was taking advice from NEDCAB as i have used some of their holding letters and got a ref which i gave them but they also wanted an address and said theyd send a letter to them? they caught me off guard as none of the other ones had done this so i hope this doesn't get me into bother seen as i've not actually spoken to anyone at their branch.

They told us to call them back after the 30 days with an update and to make a payment plan but i'm guessing this is where i start to ignore all letters from them and do not call them back and leave it until we get defaults through, from what i'm reading Very might be difficult about this from some comments above i've seen.

I have been reading upon SC website also and it says the Creditors will issue a Default then give you 14 days to contact them before they issue a CCJ so i'm assuming it's at this point you contact them to set up a payment plan?

Debtfreeat50

Thought I would share my experience for those of you worrying about defaults and their necessity.
I didnt read up on here so thought I was doing the right thing by setting up a DMP straight away to resolve my debt issues. 
I am now 2 years in having paid off half my debt and still have 3 accounts (2 Newday and Very) yet to default. On one of the smaller debts, the minimum payment is below my DMP amount so I am being charged interest again with the other accounts soon to follow.
I will therefore either have to extend the time taken to pay off my debt due to higher totals or wait for these accounts to default adding another 6 years to my credit report.
It is scary but everyone I have dealt with has been understanding. I wrote to all my creditors to state I didnt wish to be contacted by phone and barely have any letters at all.

Debtfreeat50

debtfreeme2021 said:

Suseka97 said:

debtfreeme2021 said:

Hello . Reading the above comment I had no idea that an arrangement to pay would stay on my file for 6 years after the debt had been paid. Currently waiting for all accounts to default since I stopped payments in September . I have one arrangement to pay marker but I was told by Tesco (who also stopped interest) that this would drop off my file when paid ?? Do different organisations have different rules for arrangement to pay. I’ve not set up any others but wondered if I should stop paying and let this one default also? Thank you 

I think you are being misled by Tesco and perhaps its an innocent error on their behalf, I doubt whoever the CS person you spoke with actually understands how these things work.  I guess if Tesco were to agree to remove any adverse markers on your file once paid, that would change things, but I can't see that happening in practice.

An arrangement to pay is definitely going to impact your credit file far longer than a default - think of it this way.  Say you have. a debt that's on an arrangement to pay from 2022 and it'll be 2025 before its paid (so 3 years in total, although generally DMPs last significantly longer).  The adverse marker will stay on your file until 2031 - so in total it will have had an adverse impact on your file for 8 years.  However, if that debt was defaulted in 2022 it will fall off in 2028, some 3 years sooner than the AP one.

This is why people are encouraged to push for defaults - but that advice is contained to those on DMPs who are most likely to be on the plan for many years to come, not people who are having a slight 'blip' with their finances and can get themselves back on track reasonably quickly.  Having an AP or AR marker for just a few months and then being able to get back on track with contractual payments is entirely different - those entering into DMPs are people whose finances are well beyond recovery in that respect.

Thanks @Suseka97 my budget  is still taking some fine tuning but based on reasonable budgeting plus taking into account inflation I think my self managed plan will take me 6-7 years to resolve until I’m debt free . With this in mind and taking note of the above I will look to default on this account also. As I have decided to go self managed and not enter a DMP with step change , I wanted to ask about income and expenditure requests when my debts eventually default. Do debt collection agents request this for the full household , these debts are in my name and not shared but I am living with a partner and we do share bills and a mortgage . Thanks every so much for the ongoing advice and support this page has been amazing . 

I just split all the bills in half on my form as my debt is only in my name and only included my income. Nothing was questioned at all

sourcrates

Hols2021 said:

I have been reading upon SC website also and it says the Creditors will issue a Default then give you 14 days to contact them before they issue a CCJ so i'm assuming it's at this point you contact them to set up a payment plan?

Issue a CCJ ? No, creditors don`t issue a CCJ, only a court can do that.

Creditors issue a default notice which requires you to remedy your account within 14 days, its a CCA requirement, if you do not do that (which you won`t as you crave that default) then a default will be registered on your credit file, great, as that is what you want.

No CCJ, nothing of the sort, you won`t be contacting the original creditor again either, as default also usually means the sale of the debt as well, where on earth you have got the notion of a CCJ from at that point, I just do not know.