Newbie DMP Scared!

Rob5342

I've been on a dmp with Stepchange for a year and it's the best thing I've ever done. I stopped payments as soon as I started it and they put me on the breathing space scheme which stopped creditors charging interest or contacting me for two months. They all agreed to stop interest and the only contact I had from most of them was to confirm they were working with Stepchange, I did have a few letters or calls about missed payments but when I told them about Stepchange they apologised and said they'd update their system. I've had some default and be passed to debt collectors, but I've carried on making the same payments and the only contact I've had has been a letter to say they bought the debt. Since I started it I've made affordability complaints to a few of them and got some interest refunded which has reduced the plan length, and I've just sent off some CCA requests in the hope that some are unenforceable. I liked doing it through Stepchange as they dealt with all the creditors and I only had to worry about one direct debit.

It can feel like a big step to you, but for your creditors it's part of their business and something they deal with all the time. You might feel apprehensive about starting it but they'll have people dealing with debt management plans all day.

Bear in mind that bailiffs and debt collectors are completely different things. A bailiff can only be sent by the court, and then only if the court has made a judgement and you haven't made the payments. A debt collector is just a company that buys debts and can't do anything that the original creditor couldn't do. Also remember that companies just want their money back in the cheapest and easiest way possible. They are more likely to take action against people paying nothing than those where they would get the money back for free by waiting.

Rob5342

Scaredycatt said:

I've canceled all my direct debits today, opened a new bank account, and I'm already feeling a bit more like I can handle the situation. Going to be a tight few years budget-wise but that's probably what I need.

It's quite a change at first, but you do get used to it and I'm finding that I make much better use of my money now. I can still afford the important things like shoes or getting the boiler serviced, but there is far less money disappearing on take aways or beers when I fancy them etc.

Hmr123

Hi all. I'm finding these threads hugely reassuring but I want to ask, you talk about letting debts default before contacting step change for example but I presume they don't all default at once so do you wait for all defaults to come through or act on the first one. I presume ideally all would be defaulted before going to a dmp company but it feels scary to have one defaulted whilst waiting for the others. Apologies if this is a silly question. Thanks in advance

RAS

Nothing to stop you making holding payments on the debts that default early, and then going to a DMP provider later. Or continuing to manage the DMP if you prefer.

fatbelly

Equally nothing much is going to happen when the debt is defaulted. You will get letters, the debt might get sold to a third party. They have six years to start a court claim so it's unlikely a commercial lender would rush to that.

Rob5342

They can take varying amounts of time, some companies are very quick and others lke to make things difficult and take a long time. The simplest thing is to not involve a dmp company and manage it all yourself, then you can just start paying each debt when it has defaulted. Managing it yourself is very easy, and you can make it work for you instead of the DMP company making it work for the creditors. Whatever you do don't pay a fee for doing a DMP, there are some unscrupulouis companies around that charge but Stenchange and Payplan are both free.