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DMP

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It's over a month now on breathing space and apart from accepting this breathing space I now have a dilemma Stepchange have emailed me saying if I don't respond within the next 20 days then my case will finish and I'll have to go through the process again, but if I start my DMP then my debt will be on file longer, so what advice would you give, start the plan or wait months or years to be defaulted.

Comments

  • Rob5342
    Rob5342 Posts: 2,417 Forumite
    1,000 Posts Third Anniversary Name Dropper
    edited 3 October 2022 at 7:22AM
    It depends what's most  important to you, getting the debt cleared earlier or having the debts drop off your credit file earlier. Starting it now will probably only mean a difference of a few months to the debt free date, but waiting for defaults would probably make years of difference to when they drop of.

    Personally I would go self managed, start living on the DMP budget straight away, put the payments for each debt into a savings accoumt, and then switch the payments to each debt as they default. I use this site to manage mine, it generates all the letters and financial statements for you:


  • sourcrates
    sourcrates Posts: 31,496 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    OK, a month in DMP land is nothing, stepchange are wanting you to get started as quickly as possible, because they are creditor funded, and that is part of the agreement they have to adhere too.

    You are at the very start of this, you've probably only missed one payment, your still in breathing space, and the collection process won`t even have started yet, soooo relax a little.

    What do I mean by "collection process"?

    Well, when you start to miss payments, your account is passed over to the "collections debt" of your creditor, they will spend several months trying to contact you to make a payment, if this proves to be fruitless, then either your account will be side-lined for an indefinite period, it may be passed on to an internal or external debt collector to chase up, or the account may be sold, it`s your creditor`s decision on how they proceed.

    Usually, debt collection is the most common approach taken, they attempt to call you, and subject you to their series of template collection letters, this again can take many months, and different collectors can be engaged, it may be passed around quite a few over time.

    So, the collection process is not a quick one, sometimes it can go on for years, so there really is no rush here, don`t think you need to adhere to any timetables, you can always start your DMP again at any time with stepchange, we have always recommended getting defaults first, for the reasons already stated above, however more and more creditors are marking credit files as "AP" instead of applying defaults of late, which frankly is annoying for those wanting defaults, but aside from complaining, there is very little else you can do, when even non-payment won`t budge them.

    So, it`s going to be down to personal choice for most people from now on, until the regulated DMP is launched anyway, but who Know's when that will be.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Beck50
    Beck50 Posts: 95 Forumite
    Tenth Anniversary 10 Posts Combo Breaker
    Natwest have sent me 2 notice letters to do with non payments on credit cards and MBNA have sent me a notice letter about missed payments, breathing space comes to an end October 27th so will it all start then the phone calls and letters, I've read all the welcomed advice on hear but I'm honestly stuck between wanting to start my DMP now and hoping that none of the chasing starts and they accept the plan, but my stubbornness says stick it out, any motivation what to do as everyone is different in how they handle things 😞
  • sourcrates
    sourcrates Posts: 31,496 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Just carry on regardless, if anyone calls, and you want to take the call, just tell them you're after defaults, that is your goal, wish them a nice day, and put the phone down.

    The blue bin is to recycle letters.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Rob5342
    Rob5342 Posts: 2,417 Forumite
    1,000 Posts Third Anniversary Name Dropper
    edited 14 October 2022 at 5:19PM
    Just stick it out, it feels initimidating at first, but once you've started a dmp you'll feel a lot more confident and be glad you waited for defaults. I have a whole box file full of notices of arrears etc, but I feel in complete control now.

    Don't worry about them accepting the plan or not, you pay what you can afford and if they don't like it they will just sell the debt to someone that will.
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