DMP starting Out

bon007

Hi 
I am in the process of setting up a DMP . I have started the process by stopping my payments. As I understand by reading through the forum you now wait for your accounts to default . I have 6 creditors in total and these are all unsecured as they are credit cards . My question is do I wait  for every account to default before I contact SC ? What happens if 4 out of the 6 default do I still wait or do I set up payments for the defaulted accounts . Now I have stopped the payment would I send a letter stating I am in financial difficulty and I will be in touch once the situation is clearer ? Sorry for the questions but I am a beginner and I am determined to get this right . 

peteuk

I had my DMP through CCCS (now step change) however I contacted them straight away, before even stopping payments. 

Call them, what's the worst that can happen you spend five minutes on the phone to be told call back later (which I suspect will not be the case) 

They will help you though the steps of setting up a DMP, will advise your creditors of your finical difficulties and then inform them of what you can afford to pay moving forward. 

ALSO - have you changed banks - important step if one of your credit cards is with the people you bank with.  But SC will advise you further. 

Good Luck! 

EssexHebridean

Having stopped the payments, your next financial step is to start saving that money towards setting up an emergency fund - having an EF is a vital part of the process as you'll be unable to make significant savings towards one once the DMP is up and running. 

There is a time limit by which creditors are supposed to register defaults I believe - not my area though, I imagine one of the regulars who knows more about such things will be along shortly though! 

Good advise to change banks if you have a CC with the same organisation you currently bank with. 

If you have not already done so, then I would also start working on putting together your SOA - Statement of Affairs. 

sammyjammy

If you want to go through Stepchange then wait until all accounts have defaulted.  Sending that letter makes sense as it'll cut down on the contact from them and the same time you can ask them to contact you in writing only.

bon007

Hi Thanks for your all your reply’s . I am starting to get hounded already which is always a worrying time . I will send the letter and I am in the process of setting up a realistic SOA like advised . My main concern is how long do I wait for all of them to default? I am considering  both options of doing it myself or SC . I know I have left this for far to long & I need to get my head out of the sound and begin the process of moving forward . I appreciate all the feed back and advice as I am determined to turn this round like everyone is on here .

beckstar1975

We did ours with PayPlan (free like StepChange) and we started off the process sending token £1 payments, explaining we were in difficulty and were in the process of liaising with PayPlan about our situation. We were told it was important to continue showing willingness to pay hence the £1 per account.

We also swapped our bank account before defaults to a bank unrelated to any of our debts. I stated that due to health issues I wasn't able to discuss over the phone and they thus needed to communicate in writing only and to be fair to them they did.

We used the money from the couple of months to set up a bit of an emergency fund. Also, don't stint on the SOA, we did hoping to pay back quicker and meant we really struggled when we had big purchases all at once (like all 3 kids needing winter coats/shoes - forgot that about size 6 they're in adult shoes).

Best of luck, honestly life was so much easier once it was up and running, you don't really realise how much stress your carrying until it lifts . . .

bon007

Thank you so much for your reply . I have never created a budget before which is daunting in itself and I look back at the debt think how did I get to this but I know I need to put this behind me and begin my new journey . What I have read on here is first stop payments , then send a letter to each then once you default start your plan of the DMP . Is this the right process going forward or have I missed anything ?