New DMP - defaults applied

Sarahepowell04

Hi. We have had some advice about starting a DMP from StepChange who have been great. We know this is our best change of (eventually) becoming debt free. My question is about defaults and when they should be applied. In the interests of the fastest recovery for our credit report we would like the defaults to be added as soon as possible. We have heard some bad things about arrangement to pay markers and these staying on your record for a much longer time. Although we expect our creditors to default us once the dmp has started, would we be better off stopping paying them to make them default us as soon as possible, (before we start the DMP) or should we just start with the dmp and wait for the defaults to come along whenever that is? Hope that makes sense!! 

Thank you for any advice you can give 😊

Suseka97

There is no straightforward answer to this - its one of those issues that lots of people wrangle over when starting out or already in a DMP.  The general advice is to delay starting the DMP until your accounts have defaulted, but it's not always that easy.  If you head over the the DMP mutual support thread and have a read through that (you'll need a bit of time and a nice large cup of tea/coffee), you'll find lots of comments on this topic.

Some creditors will default quickly and others need a bit of persuasion, and there are those that simply won't default, insisting that AP/ARs will have less of an impact on your credit file!

fatbelly

They should default you after 3-6 missed payments.

A dmp can delay that and may cause the AP markers.

As we recommend that you have an emergency fund when entering a dmp, it is often a good idea to stop paying your creditors for a bit, save a sum and wait for the defaults.

It's also important that you have a bank account not connected to your debts and get all income and essential direct debits moved to that.