Is a DMP my best option? UPDATE: 2 years on - what now?

funny_bunny

fatbelly said:

funny_bunny said:

Didn't post on a new post as thought my question is kind of similar.

I have few credit cards, managing ok with monthly repayments. Couple of them are on interest free offer and I'm hoping to get them pay off before the offer expire.

However, two CCs (HSBC, MBNA - £16k total balance) are now on high interest and I'm struggling with minimum payments and really not sure if I could carry on like this with them for long. I tried more interest free but was declined. 

Ideally I would start talking to HSBC/MBNA but wondering should l let them default then start talking to them either through SC/CAB? 

Sorry this may sound a dumb question but I really don't know the best way to approach. Would like to know others experience dealing with individual creditors?

DMP is not my favourite option as my other CCs are manageable.

Could it be that you're struggling to pay the minimum payments on HSBC/MBNA because you're trying to overpay the other two. Really you should be overpaying the highest interest card.

Is there a reason why you are now being declined for new offers? Do you mean declined through an eligibility checker? Have you tried asking HSBC/MBNA if they have any offers for you?

If things are really tight the best thing to do is start a new thread and post a statement of affairs

https://www.lemonfool.co.uk/financecalculators/soa.php

Other cards are on lower APR and I don't use them anyway so going down by the month.
HSBC/MBNA are I've been using for various reasons being my oldest cards, however I didn't realise how much the minimum payment have been ballooned with accumulated interests until I put them in a spreadsheet..... hah silly me! 

I did use the eligibility checker with CapOne which declined so didn't pursue further, didn't ask HSBC/MBNA as I'm sure they will decline too.
One of the reasons could be my total credit utilisation is nearly 60% including OD (closer to the limit end of every month) and my experian report shows poor score whatever that means to the lenders.

Regarding SOA, I will do once I get my head around to few other things.

Thanks for your response and the link fatbelly.

[Deleted User]

Hi, just to answer one of your original questions - I'm also on a DMP and have a Barclays mortgage, when it came time to renew I had no problems swapping onto another deal with them rather than being put on the svr - i don't think i could have changed lender though due to defaults.

SBS_88

Hello, just re-visiting this post as I'm now deep into the process! I feel a bit lost with it and like nothing is happening so I was hoping someone could tell me if things are going as they should. I'll list my creditors below and what has happened with them so far:

Lendable: 3 missed payments, no defaults showing
I posted the holding letter on 01/11/2021. I received a 'Notice of Default Sums' letter dated 19/12/2021 by email. 

Virgin Credit Card: 4 missed payments, no defaults showing
I posted the holding letter on 01/11/2021. I received a 'Notice of Default Sums' letter dated 04/11/2021 and two subsequent letters which just say I have missed payments. 

Tesco Credit Card: 3 missed payments, no defaults showing
I posted the holding letter on 01/11/2021. Since then, I have received a 'Notification of Fee Charged' letter and a 'Notice of Sum in Arrears' letter both dated 11/11/2021. 

Barclaycard: 3 missed payments, no defaults showing
I posted a holding letter in October and then a statement on 01/11/2021. I received a default notice letter on 08/11/2021 along with a giro book for making payments. 

MBNA 1: 3 missed payments, no defaults showing
I posted a holding letter in October and then a statement on 01/11/2021. They wrote back to say they were putting a 30 day hold on my account on 11/11/2021 and another letter saying they were closing my account on 13/11/2021. They wrote to me further with their bank details for making payments on 16/11/2021.

MBNA 2:  3 missed payments, no defaults showing
Same as above, I posted a holding letter in October and then a statement on 01/11/2021. They wrote back to say they were putting a 30 day hold on my account on 11/11/2021 and another letter saying they were closing my account on 13/11/2021. They wrote to me further with their bank details for making payments on 16/11/2021.

Halifax Credit Card: 3 missed payments, no defaults showing
I posted a holding letter in October and then a statement on 01/11/2021. I received a letter back asking me to confirm if there would be any changes to my circumstances in the next 3 months to which I responded and said there would not be. 

Next Directory: 3 missed payments, no defaults showing
I posted the holding letter on 01/11/2021. Since then, I have received  a 'Notice of Sum in Arrears' letter both dated 19/11/2021.

Nationwide Overdraft:  
I posted the holding letter on 01/11/2021. I've received a couple of letters since to say my account is in an unarranged overdraft, the last one was on 24th December saying that if I don't get in touch within 7 days then I may receive a default notice or have my debt passed to a debt collection agency. 

I'm sorry for the long post. Do I just sit and wait for defaults to appear on all of the accounts before starting to make payments? It feels like I'm doing something wrong as I'm just racking up missed payment fees and interests all over the place!

Any advice is very appreciated! 

sourcrates

Debt collection can be a very long, drawn out process, people think these things happen overnight, nothing could be further from the truth, it can take many months for a creditor to default you, some may not do so at all.

I`m afraid its a waiting game, keep an eye on the post, it should eventually happen, 6-9 months is not uncommon.

fatbelly

Defaults should soon appear on your credit file where I've bolded them - as sourcrates says, it's a waiting game on the rest

Lendable: 3 missed payments, no defaults showing. I posted the holding letter on 01/11/2021. I received a 'Notice of Default Sums' letter dated 19/12/2021 by email. 

Virgin Credit Card: 4 missed payments, no defaults showing
I posted the holding letter on 01/11/2021. I received a 'Notice of Default Sums' letter dated 04/11/2021 and two subsequent letters which just say I have missed payments. 

Barclaycard: 3 missed payments, no defaults showing
I posted a holding letter in October and then a statement on 01/11/2021. I received a default notice letter on 08/11/2021 along with a giro book for making payments. 

SBS_88

Thank you for your replies. If it's just a case of waiting then that's fine, I just felt like I was missing something. 

This might be a stupid question but if I'm just incurring interest and late payment fees everywhere, how do I ever get the debt to start reducing? 

RAS

Once defaulted, the interest stops.

You'll then see your DMP payment reduce the principal rather than getting swallowed in interest payments.

Down the line, you may also be able make full and final settlements at a much reduced rate.

Suseka97

SBS_88 said:

Thank you for your replies. If it's just a case of waiting then that's fine, I just felt like I was missing something. 

This might be a stupid question but if I'm just incurring interest and late payment fees everywhere, how do I ever get the debt to start reducing? 

This is pretty much how it goes though... the debts will increase, marginally, due to interest charges and fees and then once they default the amount owing is fixed and that's your starting point.

If you think about it this way - if you were just paying the minimums to the CCs then the amount you would pay in interest over the lifetime of the debt would far outweigh the amount of interest and charges added whilst you hold out for the defaults.

SBS_88

Hello, I'm just picking up this thread for a bit of advice now my situation has moved forward a little bit. 

All of my creditors have now issued defaults and I can see them on my credit report so I think I am at the stage of sending offer letters (in my case, I am offering token payments). 

My only point of uncertainty is my debt with MBNA which has been sold to 'LC Asset 2 S.a.rl'. I was just preparing the offer letter to them then noticed their address is in Luxembourg - is this correct? I thought I'd read previously to send all letters by post rather than email but I am concerned about the delay this may cause.

fatbelly

SBS_88 said:

Hello, I'm just picking up this thread for a bit of advice now my situation has moved forward a little bit. 

All of my creditors have now issued defaults and I can see them on my credit report so I think I am at the stage of sending offer letters (in my case, I am offering token payments). 

My only point of uncertainty is my debt with MBNA which has been sold to 'LC Asset 2 S.a.rl'. I was just preparing the offer letter to them then noticed their address is in Luxembourg - is this correct? I thought I'd read previously to send all letters by post rather than email but I am concerned about the delay this may cause.

I would hang fire on that one till they appoint a UK based collector