Dmp and default times

lillypoo

Hi all

I've spent the last week trying to push a debt ridden friend into getting help and have finally got her to look at a dmp. 

Shes done an soa on step change and they say she would repay her debts in 8.5 years.

Shes eager to get straight into that but I've read the advice on here about stopping paying unsecured debt, saving that money as an emergency fund etc

So my question is this.

Say she stops paying  ...defaults on credit cards etc in (for example )4 months. Then goes down the dmp route.  How dies defaulted debts being written off in 6 years work vs still paying the dmp for another 2 years?

I'm confused and I dont want to confuse her by giving mixed up info

She won't show me her soa so I'm afraid i can't post it

Sorry if I'm not very clear in what I'm asking,  can't think how to word it better

RAS

Basically, if your friend goes straight into a DMP, there's a risk that she get arrangement to pay markers on her credit file. Those stay on her credit record for 6 years AFTER the account is closed/the settlement of the debt. So could be 8.5 + 6 years.

If she puts the money into an emergency fund and gets defaults, the record is cleared 6 years after the default date.

Since creditors can't take action until they default, encouraging them to do it quickly is a good thing for the debtor.

Obviously, it's possible that down the line, a debt that's got an AP marker could be removed earlier by making a full and final settlement, so the length of time it damaged the credit record could be reduced, but it's still going to longer than a default.

SusieT

In addition to what RAS has said above, you may also be getting confused between the debt going from the credit file 6 years after the default is registered, and the very different thing wherby the debt would be statute barred after 6 years of not being acknowleged, and at that point the creditor cannot take legal action to recover the debt. 

lillypoo

Ahh thank you both. Yes I was getting confused.