DMP mutual support thread part 13 !!

Ktaylor86

Hello everyone, 

Nice to speak to others in similar position. We entered a DMP via Stepchange and started paying this in March. 

I am committed to clearing the debt but we are looking at this taking a long time, we have circa £39k to clear. 

I have had a few debts sold on and passed to management companies, and 2 defaults registered already. 

This all makes me so nervous because of wrecking my credit file, I basically had managed payments with moving debt around until I ran out of options and knew we were about to miss payments altogether and that is when I reached out to stepchange and we have made reduced payments via DMP since. 

I have so many questions and worries! But I will start with these ones: 

- How likely is it we will be able to remortgage or move to another fixed product when our current fix ends in 3 years? (mortgage is up to date it is unsecured credit cards loans etc as part of DMP)

- I am so worried about CCJ, for various reasons including the fact I am a charity trustee. How likely is CCJ if we are continuing to pay under the DMP, will creditors go down this route? 

Many Thanks indeed for any help, advice or experiences to share. 

CharlieD2k

sourcrates said:

CharlieD2k said:

Hi all new to this. Can someone please explain to me how a DMP works, how do they work out how much you should pay them to pay to creditors each month?

For example if I paid £1000 per month to non-prioiriy creditors but that left me in a negative balance each month after living expenses and priority payments would me DMP amount be less than what I was paying without the DMP? I just don't get the working out and I like to understand things fully.

A DMP is an informal arrangement between you and your creditors.
It allows you to repay unaffordable debt, at an affordable rate, over a longer period of time.

Payments are decided by your household budget, so you take your income, deduct your essential payments such as rent/mortgage/utilities/council tax/food etc etc, basically everything you might need to spend money on, and then what is left, is your disposable income.

As long as there is sufficient disposable income to pay each creditor at least £5 per month, then a DMP is possible.

If there wasn`t then you would need to look at other solutions, but there is no negative balance, only what`s left after essential payments can go into a DMP, as that is the whole point of it.

Thanks 🙏 I really appreciate this. I should have gone down this route last year but chickened out and I’m now in a worse position. I just rang StepChange for advice on switching bank accounts and they told me to cancel my dd for creditors they’ll be dealing with as dmp won’t be set up until July. I am going to struggle to meet payments this month and want to make sure my mortgage etc gets paid before I switch my account as I need the overdraft facility to pay my bills. Does this sound advisable? 

Hols2021

Ktaylor86 said:

Hello everyone, 

Nice to speak to others in similar position. We entered a DMP via Stepchange and started paying this in March. 

I am committed to clearing the debt but we are looking at this taking a long time, we have circa £39k to clear. 

I have had a few debts sold on and passed to management companies, and 2 defaults registered already. 

This all makes me so nervous because of wrecking my credit file, I basically had managed payments with moving debt around until I ran out of options and knew we were about to miss payments altogether and that is when I reached out to stepchange and we have made reduced payments via DMP since. 

I have so many questions and worries! But I will start with these ones: 

- How likely is it we will be able to remortgage or move to another fixed product when our current fix ends in 3 years? (mortgage is up to date it is unsecured credit cards loans etc as part of DMP)

- I am so worried about CCJ, for various reasons including the fact I am a charity trustee. How likely is CCJ if we are continuing to pay under the DMP, will creditors go down this route? 

Many Thanks indeed for any help, advice or experiences to share. 

Hi  

We are in the same position as you but with a bit more debt, we entered it self managed so we could pay more to our higher debts etc and had more control over what we were paying out. I had many sleepless nights worrying about the same things especially CCJ’s/debt collectors and especially our Mortgage. 

So far the DCA have been very understanding and helpful and we are only paying a small amount each month until we can get on our feet, it took roughly 6-8 months for all the defaults to be issued. Unfortunately out credit files are wrecked but I understand from speaking to people from the forum that as long as you are doing a straight swap to a new rate with the same lenders there aren’t any issues as you don’t get credit checked but if you wanted to remortgage or swap to a new lender this would be out as we have defaults registered now which would make it very difficult, our rate runs out in November but we will be staying with the same lender. Hope that helps a little  

wildheart83

Hi everyone. I've now cancelled my DD and written to SC to advise them I'm going self managed. I've also written to all creditors bar the naughty one to tell them the same.
 
Is there a benefit in writing to the remaining creditor to ask them to default me? Or better to not pay until they actually do? My plan is to use the extra to pay off a couple of smaller debts, and build up my EF again. I feel like even though I've paid off £13k so far, I'm only just now taking control of my situation

Ktaylor86

Hols2021 said:

Ktaylor86 said:

Hello everyone, 

Nice to speak to others in similar position. We entered a DMP via Stepchange and started paying this in March. 

I am committed to clearing the debt but we are looking at this taking a long time, we have circa £39k to clear. 

I have had a few debts sold on and passed to management companies, and 2 defaults registered already. 

This all makes me so nervous because of wrecking my credit file, I basically had managed payments with moving debt around until I ran out of options and knew we were about to miss payments altogether and that is when I reached out to stepchange and we have made reduced payments via DMP since. 

I have so many questions and worries! But I will start with these ones: 

- How likely is it we will be able to remortgage or move to another fixed product when our current fix ends in 3 years? (mortgage is up to date it is unsecured credit cards loans etc as part of DMP)

- I am so worried about CCJ, for various reasons including the fact I am a charity trustee. How likely is CCJ if we are continuing to pay under the DMP, will creditors go down this route? 

Many Thanks indeed for any help, advice or experiences to share. 

Hi  

We are in the same position as you but with a bit more debt, we entered it self managed so we could pay more to our higher debts etc and had more control over what we were paying out. I had many sleepless nights worrying about the same things especially CCJ’s/debt collectors and especially our Mortgage. 

So far the DCA have been very understanding and helpful and we are only paying a small amount each month until we can get on our feet, it took roughly 6-8 months for all the defaults to be issued. Unfortunately out credit files are wrecked but I understand from speaking to people from the forum that as long as you are doing a straight swap to a new rate with the same lenders there aren’t any issues as you don’t get credit checked but if you wanted to remortgage or swap to a new lender this would be out as we have defaults registered now which would make it very difficult, our rate runs out in November but we will be staying with the same lender. Hope that helps a little  

Thank you so much for the response. That is great to hear it is working well. I was so scared of defaults at first, but since learning the sooner the better. Good to hear that a straight swap mortgage with same lender will be feasible. Hopefully this will work well and we can get a suitable rate. We took out our 5-year fix in April 2021 so I am scared of higher rates, but we have 3 more years so hope there will be some good enough options at this point in time. :-) 

lillypoo

Hi everyone

I've touched on this elsewhere in dfwb, but I'm having a bit of a stress tonight so wanted to get clarification.

I'm at the start of not making payments on my debts and building up an EF while waiting for defaults

I've stopped using lloyds bank and set up a basic elsewhere.  But the llloyds current account is 2500 in debit on an agreed overdraft. At this stage I haven't told them anything, but it will be racking up £2.50 per day interest.

2 of my debts are lloyds credit cards.

Should I contact them about the o/d? Or do I just stay quiet for the next few months? Can an o/d default? Sorry ...just having one of  those OMG moments and feeling confused.

Any advice much appreciated

sourcrates

lillypoo said:

Hi everyone

I've touched on this elsewhere in dfwb, but I'm having a bit of a stress tonight so wanted to get clarification.

I'm at the start of not making payments on my debts and building up an EF while waiting for defaults

I've stopped using lloyds bank and set up a basic elsewhere.  But the llloyds current account is 2500 in debit on an agreed overdraft. At this stage I haven't told them anything, but it will be racking up £2.50 per day interest.

2 of my debts are lloyds credit cards.

Should I contact them about the o/d? Or do I just stay quiet for the next few months? Can an o/d default? Sorry ...just having one of  those OMG moments and feeling confused.

Any advice much appreciated

It can be difficult with overdrafts, as you are not contracted to any kind of monthly repayments with them.

What usually happens is the charges start racking up, and once they reach a point where the bank is no longer comfortable covering them, they will freeze the account.

At that point they would give you options no doubt, and if you were unable to comply, the debt would default, the OD would close, and it would become just another non priority debt to service.

One thing about Lloyds, they do have a good support network you can access if your struggling, via their app or online banking.
You can request they freeze interest, its usually for up to 6 months, it was longer during the pandemic.

Now this may or may not be of any help, but there is no harm telling them your intentions.

lillypoo

sourcrates said:

lillypoo said:

Hi everyone

I've touched on this elsewhere in dfwb, but I'm having a bit of a stress tonight so wanted to get clarification.

I'm at the start of not making payments on my debts and building up an EF while waiting for defaults

I've stopped using lloyds bank and set up a basic elsewhere.  But the llloyds current account is 2500 in debit on an agreed overdraft. At this stage I haven't told them anything, but it will be racking up £2.50 per day interest.

2 of my debts are lloyds credit cards.

Should I contact them about the o/d? Or do I just stay quiet for the next few months? Can an o/d default? Sorry ...just having one of  those OMG moments and feeling confused.

Any advice much appreciated

It can be difficult with overdrafts, as you are not contracted to any kind of monthly repayments with them.

What usually happens is the charges start racking up, and once they reach a point where the bank is no longer comfortable covering them, they will freeze the account.

At that point they would give you options no doubt, and if you were unable to comply, the debt would default, the OD would close, and it would become just another non priority debt to service.

One thing about Lloyds, they do have a good support network you can access if your struggling, via their app or online banking.
You can request they freeze interest, its usually for up to 6 months, it was longer during the pandemic.

Now this may or may not be of any help, but there is no harm telling them your intentions.

Thank you so much

Floss

Clarity on language used by DCAs...

I'm making good use of a bank holiday Monday by bringing my filing up to date, and have noticed some ambiguity in the language used by DCAs, Wescot in particular.

The phrase they have used is "Natwest recently wrote to let you know that we would be taking over the management of your account. This transfer has now occurred and your account is now being directly managed by us"

Does this mean that they have bought it, or are managing it OBO Natwest?

sourcrates

Floss said:

Clarity on language used by DCAs...

I'm making good use of a bank holiday Monday by bringing my filing up to date, and have noticed some ambiguity in the language used by DCAs, Wescot in particular.

The phrase they have used is "Natwest recently wrote to let you know that we would be taking over the management of your account. This transfer has now occurred and your account is now being directly managed by us"

Does this mean that they have bought it, or are managing it OBO Natwest?

It means its an equitable assignment, the debt has been assigned to Wescott to manage basically.

They can ask you to pay the debt, but cannot take action to force you to do so.

If it was a legal assignment, that would mean they had bought the debt, and could use the courts to get you to pay.

DCA `s never use clear and precise language in these matters, its all part of the game to keep you constantly thinking.