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

SBS_88

Hello 

I made the original post on this thread a couple of years ago and I'm hoping for a little more advice. 

I have a total of 11 creditors - all debts are no longer with the original lender and all defaulted in 2022. Since 2022, I have made token payment to 7 of the 11 creditors each month and generally speaking I don't hear much from them.

I haven't set up token payment plans for the other 4 of them for various reasons (1 has never been in contact yet, 3 took a while longer to default than the other 7 and I have just never made contact with them with a budget and offer letter like I did with the others).

Firstly, I want to have token payments set up for all of the debts - I've been burying my head in the sand with the outstanding 4 for too long and I'm frightened that I'm going to end up getting taken to court. Can I simply just write to the outstanding 4 with a budget sheet and an offer letter like I did the other 7 despite a couple of years having passed?  

Secondly, I am considering moving in with my partner. If I sell my home and there is any equity (I don't know if there will be much), am I legally obliged to use it towards paying the debt? Also, will my partners income be taken into account when calculating how much I can afford to pay back each month?

Lastly, what is the end game? When all is totted up, I have around 26k in debt. I don't have much disposable income (what I do have I put into savings for an emergency and for my 3 young children) and that isn't set to change so will I just continue to make these payments for the next 20/30 years?! I wish there was some sort of end in sight. 

fatbelly

Firstly, i think you need a better perspective on court action. The vast majority of debts never see this. For those that do, you are first given a preaction letter with standard reply form and 30-day limit.

We do advise that you reply to these

Even if you did not, and did not respond to an actual claim that followed, you should be aware that most ccjs just sit there and just mean that the debt has a higher resale value when it comes to a debt buyer.

Nasty bailiffs cannot be appointed on a Consumer Credit debt. They must use the court bailiff who is salaried by the court and will be professional often assisting the debtor. For this reason they are not widely used on credit cards, loans and catalogues.

So my advice on those 4 debts is to continue to ignore unless you get the formal preaction letter. They will go statute barred at the 6-year point

Secondly you are not legally obliged to do anything with a lump sum you receive. 

My advice would be to offer the 7 a sum in final settlement if you want to, to start low and first check that the debt is enforceable by doing a cca request

If there is sufficient lump sum then that could be an endpoint, if you have 5-10k to throw at this.

As a non-homeowner you could plan to qualify for a DRO, but would need to look carefully at the criteria and allow 2 years post-house sale, ideally. A DRO completes in 12 months. There is no reason why this should drag on for 20-30 years if you plan well.

SBS_88

Thank you, I really appreciate you taking the time to reply. 

If I were to receive a pre-action letter, do I still have the option to start making token payments or is it too late by that stage? My concern is that if it gets to that stage, a CCJ is made against me which I can't afford to pay and ultimately I end up getting visits to the door. 

Regarding the other 7, I think you're right that my best option as and when I can is to start making low offers to clear them one by one. 

I had a look at DRO's after reading your post and this could be something to investigate after my house has been sold for 2 years or more. I'm not too sure if they would say I had more than £75 a month disposable though. If I split my bills with my partner 50% then I wouldn't, but realistically he'll probably pay a higher % than me so I would really have more than £75 a month spare. Maybe one to look into deeper when the time comes. 

Grumpelstiltskin

If and it is if you do get a letter before action you have time to sort out a possible repayment plan before it goes to court.
Make sure you look at any letters that arrive by snail mail ( by law a letter before action has to be sent by snail mail )

If you do get one come back for advice on what to do. ( Ignore any threatening e mails they are empty threats )

SBS_88

Hello - I'm moving home next week. I know I'll need to notify the debtors that I'm making repayments to of my change of address but I wasn't sure about the 4 which I haven't got a plan set up with and haven't made contact with for a couple of years - do I still write to them with my new address? Thank you. 

RAS

I assume you have set up mail re-direction? Would be wise.

SBS_88 said:

Hello - I'm moving home next week. I know I'll need to notify the debtors that I'm making repayments to of my change of address but I wasn't sure about the 4 which I haven't got a plan set up with and haven't made contact with for a couple of years - do I still write to them with my new address? Thank you. 

And what was the last date when you paid or made written acknowledgement of the debts you are not paying? You may be close to being statute barred?

sourcrates

Your "Creditors", you are the debtor, don`t really need to know where you live, especially if your paying them, there is email etc, can`t see the point in that.

I would not be writing to anyone who hasn't been in touch for 5 years or more either, you are risking the accounts potential statute barred status.