Debt management plan- defaults versus arrangement to pay and effects on future credit

Olivia42

Hi,
I am hoping someone can advise me on the following, I have been reading previous threads etc but need some clarification.

To cut long story short, I recently entered a DMP with Stepchange- some of my creditors have marked a default, which I understand will drop off in six years, so around June 2025. Others have marked arrangement to pay and not a default. From looking this up it seems that this will stay on my file for six years AFTER completion of the debt. So if this debt will take seven years to pay, then the adverse marker remains on my file for 13 years?

The reason I am concerned is that we would need to move house in the next few years. I considered this before entering the DMP. We already have a mortgage for our current house but would be rescored to move. Ideally I would like to move in about 3 years but I don’t know how possible this is so thought in worst case scenario it was fairly likely we would be able to move six years from now once the defaults dropped off. I didn’t think I would be affected for as long as 13 years.

Can someone clarify if this is the case? Is it better to ask the lender to mark a default now rather than arrangement to pay and is that even possible? If it’s at all relevant, I had to go into this DMP due to losing my job (not my fault) and taking a job with a lower salary. The repayments I make are not that much lower than what I was paying but obviously is less than what was agreed when I took out the credit.

TIA

[Deleted User]

Ask them to mark them as defaults, unless you're planning on clearing them in the next month or two.

Default drop off after 6 years, arrangements from settling the account.

JayCeeEssex

There are lenders who will entertain people who are currently in a well managed DMP. Obviously you will need to bare your soul to such a lender, but it can be done. Please don't expect market leading rates as you will not get them, BUT at the same time considering your situation, they will still be reasonable!

Also with a DMP, please remember that if you are given the option of a reduced figure for early payment of a debt, this will be marked on your file as 'partial payment'. Lenders tend not to view this too favourably!

Olivia42

Thank you for both responses!