DMP mutual support thread part 13 !!

sourcrates

happytimesahead said:

Hi all,

I’m in the process of building up an emergency fund/ waiting for defaults prior to starting a DMP, which I’m hoping to do self-managed.
I’ve missed 2 payments so far on a loan with Lendable, and they’ve sent me an email this week stating:
“We'll visit you at home next week

You're falling behind with your loan repayments. 

If we do not hear from you or receive a payment within the next 7 days, we will instruct our representatives, Fieldcall Limited, to visit you at your home address to reconnect with you.”

I didn’t think they’d have people sent out to my house before defaulting to be honest so this is a bit of a surprise! Has anyone else had this?

I’m happy to block/ignore letters & calls whilst I wait for the defaults so I can get the DMP started, but having people knocking on the door is a bit of a step up, so I’m not sure whether to keep holding out for the default, or just bite the bullet and start reduced payments before they default the account. 

Any advice would be appreciated, thanks! 

Most creditors no longer use doorstep collection agents, but some still do, its just another way of obtaining payment from you, so lets go into a little more detail for you.

Field call/Resolve call are just two of the companies that I am aware of, who still knock on doors.

They are debt collectors basically, self employed collection agents that usually work on a commission basis, in other words they are paid by the results they get.

Now these folk are nothing special, they have no more power than you or I do, they are not bailiffs, just normal self employed individuals, who happen to collect debts.

You do not have to engage with them, you do not have to allow them entry to your home, if you don`t want them there, they are subject to the same laws of trespass, just like anyone else, you can tell them to leave.

You can also write back informing them you are removing their right to implied access to your home, so if they knock on your door, again, they commit the act of trespass, and you can, call the police to remove them.

There are lots of ways you can counter act this, if you want to fight them.

If on the other hand, you just want a quiet life, then if I were you, the best way forward may be to write and tell them you will be making reduced payments, and just get on with it, at some point you will be defaulted, and it will save you a great deal of hassle, it depends on how you want to play this, to me someone knocking on my door asking for money is easily ignored, easily dealt with, but not everyone is equipped to do that, so its your choice what you do.

ravergirl1992

Hi all, thank you so much for your help and advice so far. I have set up a new account independent of my debt and cancelled all my DDs to non-priorities. Figured I would save for my emergency fund over next six months while they default me then enter into a DMP (most likely with SC) next year. 

Do I need to contact my creditors while I wait for them to default me?

sourcrates

ravergirl1992 said:

Do I need to contact my creditors while I wait for them to default me?

In that situation, what would you say to them ?

No, you don`t need to contact them, when an account defaults, it means the financial relationship between you is over, the creditors will no longer be interested in keeping you as a customer, and will likely be looking to offload the debts at the earliest opportunity, they are not equipped to manage bad debts, you really have nothing to say to one another.

Any DMP you start will most likely be with whoever buys the debts, not the creditors you have now.

Just stick to your plan.

ThirstyElephant

sourcrates said:

Lots of people do tend to rush into these things thinking they are doing the right thing.

Its always best to just take a step back, do your research, and make sure all the bases are covered.

There is an official "breathing space" scheme, that gives you 60 days free of creditor collection activity, now really 60 days isn`t that much, you can quite easily extend that yourself to as long as you need basically, debt collection has various stages, that take a long time to work through.

You are at the very beginning of this process, all you have to do is tell stepchange you need a little extra time to determine your position, and you will contact them when you are ready.

Similarly, if you get a lot of collection letters/calls etc, just tell them the same thing, they will put accounts on hold for you, ideally you need a good emergency fund, if you want to make settlement offers at some point in the future, your accounts will need to default and be sold on to get the best deals, but for now, take it slow.

Hi @sourcrates thanks so much for your help. 

We have opened a new basic current account and moved everything over. I’ve told step change that we need a little more time. They have already written to the the creditors and we’ve started to receive some of the initial account closing/collections letters from some of them. 

I’ve now received the aforementioned money from my parents, it covers about a third of my total debt.. but I have no idea what to do. Should I keep hold of it, wait until the accounts default and offer settlement figures? Do I just pay some off and wait for the others to default? Thanks again. 

sourcrates

@ThirstyElephant, 

You get the best discounts on older debts, that may have been sold on a few times, be nearing the end of the limitation period, or have a question mark over there enforceability, companies can and do offer anywhere between 40% & 60% off, more sometimes, this is because they would have bought the debts for a fraction of there face value, 20p in the pound is around the norm, so can afford to offload them at a discount, and still make money.

This doesn't happen so often on newer debts, that are recently defaulted, which is almost the point you are at.

It`s difficult to advise you on a course of action, as what you want to achieve isn`t possible so early in the game.

You won`t get any discount at all, whilst the debts are live, once defaulted, they may agree a 10/20% discount, but that would be hard to get in all honesty.

Once an account is sold, and they have had the debt on their books anywhere up to a year, you might be able to negotiate around 30% off, but the real offers won`t come until much later.

The choice is going to have to be yours on how you proceed, you could clear some of the debt with what you have, and make arrangements on the rest, or wait it out and see what happens.

swansea_lad

I have paid off my DMP in February. I have started using my Sainsburys Credit Card and ive set up a DD to pay it off in full every month. Is this a good way to build up a good credit history?

ThirstyElephant

sourcrates said:

@ThirstyElephant, 

You get the best discounts on older debts, that may have been sold on a few times, be nearing the end of the limitation period, or have a question mark over there enforceability, companies can and do offer anywhere between 40% & 60% off, more sometimes, this is because they would have bought the debts for a fraction of there face value, 20p in the pound is around the norm, so can afford to offload them at a discount, and still make money.

This doesn't happen so often on newer debts, that are recently defaulted, which is almost the point you are at.

It`s difficult to advise you on a course of action, as what you want to achieve isn`t possible so early in the game.

You won`t get any discount at all, whilst the debts are live, once defaulted, they may agree a 10/20% discount, but that would be hard to get in all honesty.

Once an account is sold, and they have had the debt on their books anywhere up to a year, you might be able to negotiate around 30% off, but the real offers won`t come until much later.

The choice is going to have to be yours on how you proceed, you could clear some of the debt with what you have, and make arrangements on the rest, or wait it out and see what happens.

Thank you, helpful advise as always.

I think I will pay a big chunk off the biggest debt, let the others default and set up arrangements on those at a later date. 

Floss

ThirstyElephant said:

sourcrates said:

@ThirstyElephant, 

.....The choice is going to have to be yours on how you proceed, you could clear some of the debt with what you have, and make arrangements on the rest, or wait it out and see what happens.

Thank you, helpful advise as always.

I think I will pay a big chunk off the biggest debt, let the others default and set up arrangements on those at a later date. 

Can I ask if you have an emergency fund? If not, you might consider putting some of that lump sum into a savings account just in case.

JD8884

Hi All,

Bit of a long and confusing (for me) one if anyone has any comments.

I have been in a DMP for 3 years paying back a few large debts, we have been renting our home and the landlord has decided to sell so looking at all the options. Spoke with a mortgage advisor today to see the lay of the land and just got me thinking on a few things he said. I would appreciate if anyone has any experience.

1) Suggested attempting to part settle with the companies, and that they may accept 50% partial settlement?

Largest debt is 15k with Wescott, spoke to them to confirm the balance and they would partial settle for 12k today (I don't have the money). Is the 50% suggested by the guy unrealistic or is Wescott just giving an initial figure? 

2) Suggested partial settlement won't have any worse impact on my credit score than the initial default and would disappear 6 years after the original default date whether full or partial settlement.

Is this correct, we can't purchase a property at the moment but if I could settle the debts and save for a bit will a partial settlement make it much harder than the defaults?

The advisor had nothing really to benefit as made him aware up front I don't have the deposit even if he could arrange a mortgage with the DMP in place, I know it's going to take a few years either way.

Sorry if this isn't very well explained but any help appreciated.

sourcrates

@JD8884,

Settlement offers are all part and parcel of debt management.

To benefit from this though, the debts usually have to be quite old, and been sold on at least once.
Debt purchasing companies buy debts in bulk for a fraction of there face value, so they can afford bigger discounts, debt collectors who only manage accounts on their clients behalf, may still take an offer, but not in the range you are hoping for.

It can also depend on your circumstances, occasionally a company may want to off load there loan books to make way for new accounts, so will discount heavily, other times you may need a good reason why they would take an offer, as opposed to regular monthly payments.

And not all companies will do deals, PRA group for example, are fairly inflexible when it comes to discounts, others are more open to offers, it varies quite a bit.

Its the default that does the damage, how you settle one debt, when you have many, is largely irrelevant, and the whole entry vanishes after 6 years, yes.