DMP mutual support thread part 13 !!

katielouisa

Hello 👋 I’ve been rummaging through this thread and the earlier one trying to piece together this whole self managed DMP thing, I’ve taken some notes etc but I'm still quite confused. So far I’ve cancelled all my non priority dd’s, had numerous phone calls and letters, none of which I’ve answered or replied to. Is this correct? 

I read that after the first missed payment I’m to contact them to let them know I’m in financial difficulty and seeking advice, is this correct? Because I’ve made zero contact up to now 🙁 If so is there a template to use? 

I know not to make any payments yet as it’ll go down as an arrangement to pay. So do I wait for them all to be defaulted and deal with it all then or deal with each one individually depending on who defaults first etc? 

And once defaulted do I contact them to set up a standing order? 

What if it goes to DCA’s before defaulting, can this happen? Do I have to send the companies income and expenditure details? I’m sure I read that I’m not obliged to. 

My heads scrambled with it all and my eyes hurt from all the reading 😄🙈 I don’t plan on going through step change as I want to be able to pick and choose what I want. Sorry for all the questions and thanks for any help x

sourcrates

@katielouisa.
Hi,
Yes, you seem to have grasped the basics, defaults are taking longer these days, due to various factors, yes debts can go to collectors before default, but that`s just to collect the arrears, not the full debt.

There are numerous ways debt collection can play out, it just gets confusing giving you a wall of information, so first steps first, then if/or, any of the other scenario`s appear, then ask advice.

You want your debts defaulted, so don`t do anything until that happens, no payments, no letters, go radio silent, it will happen one creditor at a time, there may be long gaps before each default you, and it might take a while, but one each account defaults, feel free t make your own payment arrangements with whoever is writing to you.

And yes, we live in a free country, we are not obliged to do anything that any 3rd party company asks us to do, you can politely decline, or just give them some made up figures to keep them quiet, mostly its just to see if the payment you are proposing is affordable to you, that`s all.

katielouisa

Thanks @sourcrates, that’s really helpful 😊 
So any payments made AFTER defaults are not considered arrangements to pay where they stay on your credit report longer? 

What if the defaults take longer to be applied, am I still obliged to pay the mounting fees that I assume will be added, or just the original debt amount? And I definitely don’t have to contact them to say I’m “seeking advice” etc? 

Thank you so much for your time and I’m sorry if this has all been covered in other threads and you’re having to go over it again 🙄 There’s just so much information to process, my adhd brain is very tired and overwhelmed with it all 😅

sourcrates

@katielouisa.

Once defaulted, the default takes precedence over everything, it stays on file for 6 years, and will show as in default, every month, regardless of what arrangements you make going forward.

Interest and late fees are inevitable, but you have to think long term, lenders don`t like dealing with bad debt accounts, chances are they will sell it for pennies in the pound to some debt purchasing company, now after a while these companies will want to be clearing their decks so to speak, and will make you offers to settle for less than is owed, this is why its important to save an emergency fund, as you can settle your debts for maybe 50/60% of what is owed, thus offsetting any interest or fees added earlier.

You risk lenders putting arrangement markers on your file if you tell them you are struggling to pay, of course if your credit file isn`t that important to you, you can go down the same path as stepchange take, writing to them, and making arrangements without defaulting first, but your file will suffer for longer, and there are no guarantees they will stop interest, its your choice how you do this.

ES19901990

I’m just trying to get my head round all my options currently. I have huge debts and current calculations work out at 21 years of payments on a DMP. 

What is the longest anyone has been on a DMP. Guess I just need to look at it as part of the mortgage if that’s how we go?

sourcrates

ES19901990 said:

I’m just trying to get my head round all my options currently. I have huge debts and current calculations work out at 21 years of payments on a DMP. 

What is the longest anyone has been on a DMP. Guess I just need to look at it as part of the mortgage if that’s how we go?

Perhaps look at a different angle to your strategy, its not always the case that you repay the full outstanding balances in debt management, there are ways to tweak how you mange your debts, for example, you can stop paying your non essential borrowing, make token payments to your debts, of say £5 each, per month, and save the rest into a settlement/emergency fund.

Its likely your debts will be sold, so you could use that money in your fund, to make settlement offers to each account as and when the balance of your fund is high enough.

If you manage to settle for around about the 60% mark or less with luck, you can end your arrangement sooner, and pay less money as well, also in time you can do CCA requests, some of the debts may come back unenforceable, which again will save you money.

Sometimes you just need to think outside of the box.

ES19901990

sourcrates said:

ES19901990 said:

I’m just trying to get my head round all my options currently. I have huge debts and current calculations work out at 21 years of payments on a DMP. 

What is the longest anyone has been on a DMP. Guess I just need to look at it as part of the mortgage if that’s how we go?

Perhaps look at a different angle to your strategy, its not always the case that you repay the full outstanding balances in debt management, there are ways to tweak how you mange your debts, for example, you can stop paying your non essential borrowing, make token payments to your debts, of say £5 each, per month, and save the rest into a settlement/emergency fund.

Its likely your debts will be sold, so you could use that money in your fund, to make settlement offers to each account as and when the balance of your fund is high enough.

If you manage to settle for around about the 60% mark or less with luck, you can end your arrangement sooner, and pay less money as well, also in time you can do CCA requests, some of the debts may come back unenforceable, which again will save you money.

Sometimes you just need to think outside of the box.

I definitely think that’s an option I should consider. Pay the absolute minimum and just save as much as possible. Maybe 5 years time get some F&F offers and see if I can get the figures down.

ES19901990

Just to give me further outstanding when you self manage how do you all keep track of each outstanding balance?

2021rdsunshine

ES19901990 said:

Just to give me further outstanding when you self manage how do you all keep track of each outstanding balance?

Once your debt shows as defaulted on your credit files and you start making payments to whoever owns the debt or the ones instructed to collect it, you can keep track of each outstanding balance on their websites. That’s what I have been doing. 

ES19901990

2021rdsunshine said:

ES19901990 said:

Just to give me further outstanding when you self manage how do you all keep track of each outstanding balance?

Once your debt shows as defaulted on your credit files and you start making payments to whoever owns the debt or the ones instructed to collect it, you can keep track of each outstanding balance on their websites. That’s what I have been doing. 

That’s great thank you