DMP mutual support thread part 13 !!

sourcrates

MrsLD said:

My dmp payment is way below the contractual amount which is why I am so confused! For the provider I spoke to today I 'should' pay £397 a month; via the DMP they get £199. I'm with payplanplus. I've sent them a message but will just have to call them Monday and ask them to go back to creditors and start again.

If I had read this thread before getting debt advice I'd have done what you all say and let things collapse entirely before starting a dmp... but I thought I could bloody rely on the advice I got from professional, government promoted advisors

Many years of experience has taught me that the only sure way to get creditors to default you, thus stopping the interest, is to cease payments altogether and ignore them completely until they either assign your debt to a collector or sell it on.

You should see what Pay plan advise, but it won`t be that.

HR_Man

Hi, I am really worried. I am considering entering into a DMB as I have 11k debts on an overdraft (£500) and credit card (£10,500) with the one bank and have applied for 'Breathing Space' but I read something somewhere that you should not do that because that warns the bank that you are in financial trouble and will freeze your account so you can no longer use it or offset your debt against what you have in your account. I am really worried what I will do if that happens in my case - I regret applying for Breathing Space as I had no idea your creditor could freeze your assets and stop you functioning in terms of day to day payments by applying for this scheme, or am I over-reacting? I went down this route with a debt adviser and feel it should have been pointed out that Breathing Space can make things much worse?

sourcrates

HR_Man said:

Hi, I am really worried. I am considering entering into a DMB as I have 11k debts on an overdraft (£500) and credit card (£10,500) with the one bank and have applied for 'Breathing Space' but I read something somewhere that you should not do that because that warns the bank that you are in financial trouble and will freeze your account so you can no longer use it or offset your debt against what you have in your account. I am really worried what I will do if that happens in my case - I regret applying for Breathing Space as I had no idea your creditor could freeze your assets and stop you functioning in terms of day to day payments by applying for this scheme, or am I over-reacting? I went down this route with a debt adviser and feel it should have been pointed out that Breathing Space can make things much worse?

Relax, creditors cannot freeze your assets unless you are bankrupt.

They can use the right of set off to take money from a debt owed to that bank from another of your accounts with a balance in it, but that is rare.

Breathing space is designed to stop creditor action for 60 days, so nothing, repeat, nothing will happen.

Use the time wisely, if you intend to go the DMP route, rule number one is don`t bank where you have debts.

HR_Man

sourcrates said:

HR_Man said:

Hi, I am really worried. I am considering entering into a DMB as I have 11k debts on an overdraft (£500) and credit card (£10,500) with the one bank and have applied for 'Breathing Space' but I read something somewhere that you should not do that because that warns the bank that you are in financial trouble and will freeze your account so you can no longer use it or offset your debt against what you have in your account. I am really worried what I will do if that happens in my case - I regret applying for Breathing Space as I had no idea your creditor could freeze your assets and stop you functioning in terms of day to day payments by applying for this scheme, or am I over-reacting? I went down this route with a debt adviser and feel it should have been pointed out that Breathing Space can make things much worse?

Relax, creditors cannot freeze your assets unless you are bankrupt.

They can use the right of set off to take money from a debt owed to that bank from another of your accounts with a balance in it, but that is rare.

Breathing space is designed to stop creditor action for 60 days, so nothing, repeat, nothing will happen.

Use the time wisely, if you intend to go the DMP route, rule number one is don`t bank where you have debts.

Thanks that is a relief! I see the merits of having a bank account seperate to the bank I have debts with-it sounds as if the set off is not likely which is good news. Thanks again!

Debtbegone2022

Hi

I am about to put together a CCA request for a debt. The letters I receive come from Westcot but they are working on behalf of Cabot.

So should I be sending this to Westcot who will send onto Cabot or just straight to Cabot?

Thanks

sourcrates

Wescott are obliged to pass the request on to Cabot, so they should pass it on, if they don`t or say they can`t, no use arguing with them, send it to Cabot yourself.

Thejourneybegins

Just thought I’d share my journey so far. I have a considerable amount of debt (over £60k) and decided to embark on a self managed DMP. I read through all 450 pages (over 500 now) and whilst it’s time consuming and repetitive i guarantee you will get 99% of the answers you are looking for. 

I’m about 7 months into not paying and ignored every single creditor until it registered as a default. I then contacted them via email and asked them I only want contact via email or post , which those that I been in contact with (4 of them) have done as asked as I think they have to. 4 more have shown as default today and 1 more to go!

I’m now starting the process of finalising my I&E and will make them offers what I can afford, not what they demand. So far, they’ve all been ok.
So my advice is, if your in the mess I was, there is hope, make sure you save an emergency fund, ignore them until you default as the only thing that will happen is lots of letters and phone calls, just put your phone on silent! And make sure you read all the pages, as I’ve pretty much followed the great advice from Sourcrates and it happens just as he says it will.
I will update once I hear back on my offers of payment!
Thanks for all the great advice so far, phase 2 soon to begin!!

Debt_Mountain

Trying to get my head around what Sourcrates recommends having read so much of these threads.

It sounds like being more collaborative with the creditor before a default happens counter-intuitively doesnt help?!

Process being:

1. Pay nothing of the contractual repayments
2. Await a default, and likely transfer to a debt buying agency of the initial debt
3. Offer something to that debt purchaser, quickly, by way of regular payment
4. Many are saying not to provide an SOA, just pay what you feel you can afford, this feels weird. 
5. Technically, after 6 years, that debt drops off your credit file. Or await a F&F.

Why are there so many threads about DMP's last for 10-15 years?

sourcrates

Debt_Mountain said:

Trying to get my head around what Sourcrates recommends having read so much of these threads.

It sounds like being more collaborative with the creditor before a default happens counter-intuitively doesnt help?!

Process being:

1. Pay nothing of the contractual repayments
2. Await a default, and likely transfer to a debt buying agency of the initial debt
3. Offer something to that debt purchaser, quickly, by way of regular payment
4. Many are saying not to provide an SOA, just pay what you feel you can afford, this feels weird. 
5. Technically, after 6 years, that debt drops off your credit file. Or await a F&F.

Why are there so many threads about DMP's last for 10-15 years?

Because everyone's situation is different, those in long term DMP`s are most likely to be homeowners who obviously can`t go bankrupt as they own a house, but otherwise might have had a large amount of debt.

If they don`t want to opt for an IVA, then a long term DMP is there only other choice, its dependant on their disposable income, and general circumstances.

If they can save a good settlement fund, great, but not everyone can, DMP`s can be adjusted to suit your own circumstances, they are flexible, and how you work them is also flexible.

What you describe above is a good way for anyone to proceed, debts may fall off your file after 6 years, but if you are paying them, then they are still active, and won`t go statute barred.

Debt collectors/purchasers, will accept a reasonable payment without question, you pay on their website, very easy, however if you want them to accept less than would be deemed reasonable, they may ask to see an SOA, you can choose whether to provide one or not.

You plan according to your situation, and everyone is different.

daffodil5

I'm new here, but just wanted to say how much reading this thread has helped and reassured me in recent weeks, as well as finding answers to my many questions while deciding what to do about my debts, it's made all the difference to be able to understand so many things about DMPs and made it so much less scary! And it was really REALLY scary for far too long.

I've taken the first step, after weeks of procrastinating and fear just by looking at their website, and been in touch with Payplan (I am both self-employed and employed full time so they seemed the best option, however all my debts are personal ones, loans and credit card debt mostly, no arrears on anything, just totally unaffordable and little money left to continue to service them, nor sufficient income to carry on)

They were very professional and kind, went through all my budget with a fine tooth comb, and income expenditure etc, and then recommended a DMP for me, as I have equity in property, my home owned outright and business property mortgaged (end of fixed rate so huge increase which has not helped at all! 🤯) It was hugely terrifying to hear them say that they didn't recommend bankruptcy as I'd lose my properties but once I realised that there was a feasible, realistic and manageable way to not do that what a relief it was!

I am going to go for the DMP with Payplan rather than manage it myself, as I feel more comfortable having someone else to administer this, I don't think my mental health could take any more, after a few years of complete turmoil, divorce, bereavement, huge life changes, house moves, trying to find work and build a business, upheaval and major life stress quite beyond belief, I need to now make life easier for myself. I have some savings left which will serve as an emergency fund and as I am (ahem!) older, only a few more years to pension age I won't be looking for more credit at any point so my credit rating isn't really of interest to me for the future.

Today I have taken the very scary but oddly liberating step (once I'd done it lol!) of cancelling all direct debits for my debts, planning to transfer the rest of the DDs plus my savings, wages and business income to a bank (Monzo) where I don't have any debts, as advised on here not to bank where debts are held. I spoke to Payplan this afternoon to finalise my figures and up the mortgage figure on the details they hold, which has had the effect of bringing down my DMP monthly payment considerably! Silver linings are there if you look for them!

When the mortgage rates come down again I'll pay more, and it will be good to see the debt reducing faster, but for now will just do what I can.
I've also gone through all my costs and reduced wherever I can, including mobile phone and reducing my direct debit for energy with the provider. Today alone I've saved nearly £100 a month!

My remaining direct debits and the DMP payments total (excluding the business mortgage) are now less than the huge payments alone that I was making just to service debt!

 I'll be reviewing my life insurances too in the next few weeks in order to try to get the best deal and reduce costs a bit more, as they haven't been reviewed for a few years.

I had literally been making myself ill, not sleeping, constantly petrified of what's going to happen, having panic attacks, self medicating with alcohol etc. for many months. All because of this stupid debt! Even the thought of logging into my online banking app to watch huge amounts of money being taken every month to service the debt and then having to live off credit cards and adding to that debt mountain was just awful.

Still need to get it all finalised, of course, but I have a call scheduled for next Monday with Payplan where hopefully things will start to be set in motion. I feel so much better for taking control and actually doing something about it. Still daunting but it feels better already.

This site and thread is invaluable and I'm so grateful.

Thank you so much to everyone who takes the time to post their experiences and questions and also to help and support others. It's made a huge difference to me, and I don't think I would have found the courage to do something without that lifeline of coming on here and reading during my worst panicky moments.

Sorry about the long post but if it somehow helps another person who may be feeling like I was (hopefully that's the past tense now!) then maybe you'll forgive me! 😊