DMP mutual support thread part 13 !!

DevonTed

Hi All,
Happy New Year. I have just started a DMP with Stepchange and am still receiving default notices, which I consider to be hugely unfair as I have gone to such lengths NOT to simply avoid my debt. I feel that these can be tackled and are largely punitive in nature, therefore harassment and illegal under natural law. But wait, I cannot myself take things further this month as I have not yet established my creditors' defacto acquiescence to the new reality by accepting my money (albeit at a reduced rate) for a period of months. However, my intent is to effectively call certain ones out on this behaviour and have it at least on record, should I be taken to court. To this end, I have drafted the following letter and would like to invite suggestions and opinion regarding it.

[Your Name]
[Your Address]
[City, Postcode]
[Date]

[Creditor's Name]
[Creditor's Address]
[City, Postcode]

Subject: Cease and Desist Letter Regarding Default Notices

Dear [Creditor's Name or Department],

I am writing regarding the default notices you continue to issue related to [Account Reference Number], despite my adherence to the reduced payment plan established through my Debt Management Plan (DMP) with StepChange, a registered charity.

Acceptance of Variations to the Contract

Your ongoing acceptance of payments under the DMP indicates, under principles of both common law and natural law, a de facto variation of the original contractual terms. By accepting reduced payments without enforcing the original terms, you have effectively acquiesced to the new payment arrangement.

This acquiescence establishes a reality that renders your continued issuance of default notices both moot and inaccurate. Recognizing the variation in payments, your actions contradict the intent of default notices, which is to highlight a breach of the original terms. As there is no ongoing breach in the context of your accepted behaviour, these notices are unwarranted.

Clarifying the Use of Default Notices

While Section 87(1) of the Consumer Credit Act 1974 requires the issuance of a default notice before taking certain actions, such as terminating the agreement or demanding earlier payment, this is not relevant where such actions are not the intent of the creditor. In the context of an active and adhered-to Debt Management Plan (DMP), where payments are being made regularly and accepted in good faith, the issuance of default notices becomes unnecessary.

If it is the intent of the creditor to take such actions, it raises serious concerns about whether the contract is being operated in good faith, a fundamental principle of English contract law. Persistent default notices in this context could constitute a breach of fair dealing and undermine the integrity of the payment arrangement.

Furthermore, the repeated issuance of default notices in these circumstances may constitute harassment under the Protection from Harassment Act 1997, particularly if these notices are being used as an intimidation tactic or as a "sword of Damocles" over my financial future. The FCA's Consumer Credit sourcebook (CONC) 7.3 explicitly requires creditors to treat customers in financial difficulty with forbearance and due consideration, a standard that this behaviour appears to contravene.

The Punitive and Harassing Nature of Default Notices

Default notices remain on my credit file for six years, creating lasting harm far beyond their informational purpose. This harm persists despite my good-faith efforts to address the debt responsibly. The issuance of these notices is punitive and harassing, given the circumstances, and their continued use is both unfair and unnecessary.

Furthermore, under the UK GDPR and Data Protection Act 2018, you are obligated to ensure the accuracy and fairness of the data you process. The continued reporting of defaults, despite my compliance with the DMP, may constitute a breach of these data protection principles.

Demand to Cease and Desist

I formally request that you:

1. Immediately cease issuing default notices regarding this account, as they are neither required nor appropriate given the established payment arrangement.
2. Confirm, in writing, that you will refrain from issuing further default notices or reporting defaults to credit reference agencies while the DMP payments continue to be made and accepted.

Failure to comply with this request will compel me to:

• File a formal complaint with the Financial Ombudsman Service (FOS) for potential breaches of FCA regulations.
• Lodge a complaint with the Information Commissioner's Office (ICO) concerning the processing of inaccurate or unfair personal data.
• Seek legal advice regarding potential claims under the Protection from Harassment Act 1997.

I request your written confirmation of compliance with the above requests within 14 days from the date of this letter.

Yours sincerely,
[Your Full Name]

 

As I state above, I have NOT sent any of these out yet, but thought that I would ask more experienced members for their thoughts and suggestions.

sourcrates

DevonTed said:

Hi All,
I have drafted the following letter and would like to invite suggestions and opinion regarding it.

As I state above, I have NOT sent any of these out yet, but thought that I would ask more experienced members for their thoughts and suggestions.

"This acquiescence establishes a reality that renders your continued issuance of default notices both moot and inaccurate. Recognizing the variation in payments, your actions contradict the intent of default notices, which is to highlight a breach of the original terms. As there is no ongoing breach in the context of your accepted behaviour, these notices are unwarranted"

You have breached the original terms and conditions by entering debt management, to stay within your contractual obligation, you must make contractual repayments, anything less than that is a breach of the agreement, and they are perfectly entitled to default you.

Lenders have two choices, they can default you in line with guidance, after between 3/6 missed contractual repayments, or mark your file as "AP" (arrangement to pay).

AP markers stay on file 6 years after you repay the debt, so potentially twice as long as a default, defaults are automatically removed 6 years after the default date, I know which I`d prefer.

Stepchange should have told you defaults are part and parcel of any debt management plan.

Most DMP`ers would be very happy to have early defaults, its what we advise you do to avoid AP markers, it benefits you in two ways, all interest and charges stop, and you have a clear 6 year window till your credit file recovers, unless your plan will only be a short term affair, less than 3 years say, then I wouldn`t send the letter.

wolveswolves29

Good afternoon I’m currently in the process of waiting for debts to default to start self managed DMP (38k), currently been on arranged payments for 8 months and they haven’t defaulted me , so stopping payments all together and wait for them to default, I’m planning on doing irresponsible lending letter for the largest debt (20k) should I do this now or once it’s defaulted , also I’m planning on making some partial settlement offers when would be the best time for this once the debt gets sold on or wait for 3/6 months then make some offers , family have some inheritance they are willing to loan me at a much lower monthly payments  (I won’t tell them I will just say it’s a gift)

sourcrates

wolveswolves29 said:

Good afternoon I’m currently in the process of waiting for debts to default to start self managed DMP (38k), currently been on arranged payments for 8 months and they haven’t defaulted me , so stopping payments all together and wait for them to default, I’m planning on doing irresponsible lending letter for the largest debt (20k) should I do this now or once it’s defaulted , also I’m planning on making some partial settlement offers when would be the best time for this once the debt gets sold on or wait for 3/6 months then make some offers , family have some inheritance they are willing to loan me at a much lower monthly payments  (I won’t tell them I will just say it’s a gift)

Best get complaints in now, don`t wait on that.

Settlement offers are usually made once a debt defaults and is sold on, the new buyer pays around 12p in the pound for defaulted debts, which is why they can afford to settle for less in most cases.

There is no margin for discount earlier on in the process.

wolveswolves29

sourcrates said:

wolveswolves29 said:

Good afternoon I’m currently in the process of waiting for debts to default to start self managed DMP (38k), currently been on arranged payments for 8 months and they haven’t defaulted me , so stopping payments all together and wait for them to default, I’m planning on doing irresponsible lending letter for the largest debt (20k) should I do this now or once it’s defaulted , also I’m planning on making some partial settlement offers when would be the best time for this once the debt gets sold on or wait for 3/6 months then make some offers , family have some inheritance they are willing to loan me at a much lower monthly payments  (I won’t tell them I will just say it’s a gift)

Best get complaints in now, don`t wait on that.

Settlement offers are usually made once a debt defaults and is sold on, the new buyer pays around 12p in the pound for defaulted debts, which is why they can afford to settle for less in most cases.

There is no margin for discount earlier on in the process.

Great thanks for the advise , so it’s worth going on dmp for a few months then start making offers work out what they brought them approx and offer a little extra. And I’ll get on the complaints straight away.

Suseka97

sourcrates said:

DevonTed said:

Hi All,
I have drafted the following letter and would like to invite suggestions and opinion regarding it.

As I state above, I have NOT sent any of these out yet, but thought that I would ask more experienced members for their thoughts and suggestions.

Most DMP`ers would be very happy to have early defaults, its what we advise you do to avoid AP markers, it benefits you in two ways, all interest and charges stop, and you have a clear 6 year window till your credit file recovers, unless your plan will only be a short term affair, less than 3 years say, then I wouldn`t send the letter.

I second, third and fourth  what Sourcrates has outlined above.  You need to be pushing for defaults as opposed to trying to stop them.  You have, effectively, defaulted on your agreement/s with your creditor/s in so far as you are no longer making the contractual payments.  Now, if this were to be only a short term issue, then fine - you would probably be ok with the AP markers until you can get back on your feet.  But seeing as you have entered into a DMP arrangement suggests that this is not the case.  So, defaults are your friend and will mean that interest and charges will stop and you can start making real inroads to clearing your debts and 6 years on those defaults will disappear even if you are still making payments under a DMP.  

Suseka97

wolveswolves29 said:

sourcrates said:

wolveswolves29 said:

Good afternoon I’m currently in the process of waiting for debts to default to start self managed DMP (38k), currently been on arranged payments for 8 months and they haven’t defaulted me , so stopping payments all together and wait for them to default, I’m planning on doing irresponsible lending letter for the largest debt (20k) should I do this now or once it’s defaulted , also I’m planning on making some partial settlement offers when would be the best time for this once the debt gets sold on or wait for 3/6 months then make some offers , family have some inheritance they are willing to loan me at a much lower monthly payments  (I won’t tell them I will just say it’s a gift)

Best get complaints in now, don`t wait on that.

Settlement offers are usually made once a debt defaults and is sold on, the new buyer pays around 12p in the pound for defaulted debts, which is why they can afford to settle for less in most cases.

There is no margin for discount earlier on in the process.

Great thanks for the advise , so it’s worth going on dmp for a few months then start making offers work out what they brought them approx and offer a little extra. And I’ll get on the complaints straight away.

You'll most likely find that it'll take more than a few months of being in a DMP before your debts are sold on, but that does depend on the creditor - some sell on quick, others don't.  Some of my debts stayed with the original creditor for more than 18mths to 2 years before they were sold on.  Once they are, then by all means make offers - but again, don't be too disappointed if they reject even if you think your offer is reasonable based on your calculations of what they've paid for it/them.  Unfortunately there's no magic formula when it comes to settlements and regardless of how little a DCA may have paid for a debt, they still have a profit margin they are eager to realise.  It's a bit of a cat and mouse game, but worth playing 

debtfreehopeful28

Hello

I am considering a DMP due to a high amount of debt. I am currently not behind on any payments but also can’t afford to live which means the debt is getting worse. 

Am I right in thinking I’m better to default than enter straight in to DMP and end up with an AP on my file? 

debtfreehopeful28

debtfreehopeful28 said:

Hello

I am considering a DMP due to a high amount of debt. I am currently not behind on any payments but also can’t afford to live which means the debt is getting worse. 

Am I right in thinking I’m better to default than enter straight in to DMP and end up with an AP on my file? 

sorry now realised my original post was moved and this was therefore a repost! 

daffodil5

Slightly panicking (well quite a bit) as I have today received a letter of claim from PRA re Barclaycard debt of £10k, since last February I haven't paid or contacted any creditors following advice on here, and gave been ignoring letters and calls from them all. 
I assume I have to fill in the form they've sent, to avoid further action, and can if I need to set up a monthly payment by standing order to them within what I am able to afford, they have emailed me with details of how to set this up online.
I am just worried that they won't accept the amount I'm able to offer (paying £40 a month or should I offer less?) and will still take me to court. Has anyone else had a payment offer refused?
This is the only debt which has sent a letter of claim, all the others are still sending the usual letters so I'm hoping to deal with them as and when they ramp up the pressure. 
The total I can afford towards all my debts is £150 a month, the Barclaycard is the largest debt I owe. I have built up some savings as per advice on here since last February.
I did speak to Payplan early last year but decided to not start a DMP until my debts default after reading the advice on here so haven't been in touch with them since.
I don't know what to do with regard to setting up a DMP as I'm not sure I want to go self managed or if I would cope with that, my mental health is not great at the moment and I'm leaning towards going back to Payplan, or is it easy to set up my own DMP, but do the debt collectors leave you alone more if you're going through a debt charity? Very torn and a bit overwhelmed right now.
Thanks for any advice x