DMP mutual support thread part 13 !!

wildheart83

I have 2 CCs and a Loan with one creditor - they defaulted one CC and the loan ages ago, and I've been merrily paying all 3 accounts as part of my DMP. For some reason they say CC1 is not in arrears and therefore they'll no longer accept a payment plan for it, adding on £73 in interest this month out of the blue. 

I'm guessing the easiest thing to do is to stop paying it altogether so they default the account sooner? 

sourcrates

wildheart83 said:

I have 2 CCs and a Loan with one creditor - they defaulted one CC and the loan ages ago, and I've been merrily paying all 3 accounts as part of my DMP. For some reason they say CC1 is not in arrears and therefore they'll no longer accept a payment plan for it, adding on £73 in interest this month out of the blue. 

I'm guessing the easiest thing to do is to stop paying it altogether so they default the account sooner? 

Exactly that.

In order to default an account, there has to be a history of missed/late or no payments whatsoever.

So you know what to do.

Broke_Bear

Hi, I am currently on a DMP with Stepchange : 
5 creditors ranging from £1000 - £8000 owed to each all defaulted nov'19 to feb '20 total debt just shy of £24,000

 Over the next couple of months will be looking to make F&F payments to all creditors and be debt free.  This is coming from an inheritance following the passing of my lovely Mumsy.  
How do I go about this?  
Do I continue paying step change and settle each one as monies come in or do I wait for all monies to come in and tackle them all in one go?

If I do the former How will this affect my step change DMP will I need to go self-managed first?

I was not expecting to be in this position so am looking for advice as to where to start

TIA xx

sourcrates

Broke_Bear said:

Hi, I am currently on a DMP with Stepchange : 
5 creditors ranging from £1000 - £8000 owed to each all defaulted nov'19 to feb '20 total debt just shy of £24,000

 Over the next couple of months will be looking to make F&F payments to all creditors and be debt free.  This is coming from an inheritance following the passing of my lovely Mumsy.  
How do I go about this?  
Do I continue paying step change and settle each one as monies come in or do I wait for all monies to come in and tackle them all in one go?

If I do the former How will this affect my step change DMP will I need to go self-managed first?

I was not expecting to be in this position so am looking for advice as to where to start

TIA xx

Are all your debts still with original creditors, or have any been sold on ?

Because original creditors won`t accept as low an offer as a debt purchasing company will, as they buy debts in bulk for about 10% of their actual worth, so can afford to accept bigger losses to settle them.

Once you have the money, end your DMP, that will cause all your creditors to write to you showing you your outstanding balance, so then you can respond, using the National Debtline standard settlement letter, making your offer to settle.

You can negotiate on the phone if you wish, but any agreed settlement must be confirmed in writing, as per the ND template letter, which can be found here -

Sample Letter - Settlement offer | Sample letter | National Debtline | National Debtline

Now I can`t tell you what to offer, but general advice is  to start low, as you can always increase your offer, always bearing in mind what this company actually paid for your debt.

Also don`t expect a quick response, its more of a marathon than a sprint this process, creditor times to respond can be around a month all together, and then they may propose a different amount, so unless you want to pay the full outstanding balances to get rid of the debt, expect this to take anywhere between 6-8 months to complete.

Broke_Bear

Hi 
thanks for the response, all have been sold on, 3 are with PRA, one is with Intrum and the other is with Moorcroft.
I do get letters from time to time offering me a settlement deal to pay 2/3 and they will write off the last 1/3 or figures in that region.
would I still look to offer lower?

sourcrates

Broke_Bear said:

Hi 
thanks for the response, all have been sold on, 3 are with PRA, one is with Intrum and the other is with Moorcroft.
I do get letters from time to time offering me a settlement deal to pay 2/3 and they will write off the last 1/3 or figures in that region.
would I still look to offer lower?

The aim is to settle for as little as possible, but the choice is yours how you want to play it.

R.j.Belcher

Hi am on a DMP with Step change, ower £29k in CC and loans. Am struggling on a tracker mortgage, interest only so can't remortgage. Plan is early 2025 will sell up and move to a cheaper area and pay off maybe £10k of that. Have asked to take my payments down to £260 due to mortgage rises. When I started it was about £100 higher but now biting. How much would I have to reduce it for creditirs to start pushing back and step change looking at a IVA?
thanks
Rob

sourcrates

R.j.Belcher said:

Hi am on a DMP with Step change, owe £29k in CC and loans. Am struggling on a tracker mortgage, interest only so can't re-mortgage. Plan is early 2025 will sell up and move to a cheaper area and pay off maybe £10k of that. Have asked to take my payments down to £260 due to mortgage rises. When I started it was about £100 higher but now biting. How much would I have to reduce it for creditors to start pushing back and step change looking at a IVA?
thanks
Rob

That won`t happen Rob, you cut down your payments as you see fit, basically whatever your disposable income allows.

Your creditors will have to accept what you offer, if they are unhappy, they simply sell the debt to someone else, its not your problem how they react.

No one will be peddling an IVA to you, you need a good amount of disposable income for an IVA, if your reducing payments, then you are not a good candidate for one.

Never mind what stepchange or your creditors do or say, stick to your plan, you are in control, not them.

MrsLD

Hello

I started a DMP in May. Around £20k to repay spread over 4 credit cards, though with vastly different balances on each. I started the DMP before I had missed a single payment, having realised I was about to have to do so if I didn't take action. I've been surprised that all creditors have agreed to freeze interest and charges for now, but what is confusing me a bit is that companies I owe most to seem much more relaxed about the situation than the one I owe the least to.

MBNA (c£10k), Virgin (c£6k) and Lloyds (c£3k) are not sending warnings about payments/ charges etc and seem to be reporting to the CRAs that my account is fine (active, not in arrears, no mention of missed or reduced payments or that an arrangement is in place). Barclaycard (c£900) are taking a very different approach. When I log in, I can see that they aren't actually applying interest or fees, but they are  writing, texting and emailing me to warn about them, and they are certainly reporting to the CRAs that I am 'missing' payments. They are also the only ones who have formally notified me my card is not to be used (not that I have any intention of using any and chopped them all up before I contacted PayPlan about the DMP) and who have sent me a Notice of Arrears, which makes me think they are going to default me soon. I am happier for a default to happen asap if it is going to happen at all- but why is their approach so different? Is it because as the lender to whom I owe least, they are getting by far the smallest slice of the pie?

Ktaylor86

MrsLD said:

Hello

I started a DMP in May. Around £20k to repay spread over 4 credit cards, though with vastly different balances on each. I started the DMP before I had missed a single payment, having realised I was about to have to do so if I didn't take action. I've been surprised that all creditors have agreed to freeze interest and charges for now, but what is confusing me a bit is that companies I owe most to seem much more relaxed about the situation than the one I owe the least to.

MBNA (c£10k), Virgin (c£6k) and Lloyds (c£3k) are not sending warnings about payments/ charges etc and seem to be reporting to the CRAs that my account is fine (active, not in arrears, no mention of missed or reduced payments or that an arrangement is in place). Barclaycard (c£900) are taking a very different approach. When I log in, I can see that they aren't actually applying interest or fees, but they are  writing, texting and emailing me to warn about them, and they are certainly reporting to the CRAs that I am 'missing' payments. They are also the only ones who have formally notified me my card is not to be used (not that I have any intention of using any and chopped them all up before I contacted PayPlan about the DMP) and who have sent me a Notice of Arrears, which makes me think they are going to default me soon. I am happier for a default to happen asap if it is going to happen at all- but why is their approach so different? Is it because as the lender to whom I owe least, they are getting by far the smallest slice of the pie?

I was in similar position when I entered our DMP in March. (ours is Stepchange) 
One of my creditors was also Barclaycard but was one of the larger ones at almost £7K 

Barclaycard defaulted me straight away - I think this is their policy to do so. I have subsequently learnt that this is no bad thing. Being Defaulted means no further charges or interest can be added and the sooner this happens the better as it will come off the credit file after 6 years. 

I have also noticed that I am tending to get a notice of arrears in the month before the default notice. 

The CRAs have not updated with defaults that were defaulted back in late April/May at the moment, I think it takes a while to show.