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Starting DMP

Going down this route very shortly, trying to get a grip on the order in which to do things.

Get new bank account for Salary to be paid into

1. Stop paying cards and loan altogether, save cash for EF?

2 wait for debts to default on credit file, then contact stepchange and start DMP

Does this sound right?

I have a Starling account I can use going forward, gor salary etc  any disadvantages with them?

Hiw long for defaults, roughly, I'm talking Halifax, Aqua,capitol one,Tesco and Barclaycard.

Many thanks
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Comments

  • Kakiste
    Kakiste Posts: 1,022 Forumite
    1,000 Posts Third Anniversary Debt-free and Proud! Name Dropper
    That looks like the right order to me. My defaults took between 2-5 months to come through after I stopped making payments. Make sure you save as much as you can in the stage 1 bit- then you'll have an EF to take you through your DMP. 

    Good luck. I finished mine back in March- it goes much faster than you think. 
    Bottom line; 
    £49k paid off 
    Car HP paid off
    Debt Free!
    Saved Escape fund and moved out. 

    Current focus; saving Emergency fund
  • Kakiste said:
    That looks like the right order to me. My defaults took between 2-5 months to come through after I stopped making payments. Make sure you save as much as you can in the stage 1 bit- then you'll have an EF to take you through your DMP. 

    Good luck. I finished mine back in March- it goes much faster than you think. 
    How much did u owe? 

    I'm at about 28k, will this be too much?

    I think I'll have 4/500 a month spare
  • sourcrates
    sourcrates Posts: 30,615 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Kakiste said:
    That looks like the right order to me. My defaults took between 2-5 months to come through after I stopped making payments. Make sure you save as much as you can in the stage 1 bit- then you'll have an EF to take you through your DMP. 

    Good luck. I finished mine back in March- it goes much faster than you think. 
    How much did u owe? 

    I'm at about 28k, will this be too much?

    I think I'll have 4/500 a month spare
    There is no limit on how much debt you can enter a DMP with, however, as with any debt solution, it should be circumstance dependant, £500 a month over 5 years is not unheard of, which is what you would be looking at, assuming all interest was stopped early on.

    You don`t give any details about your situation, but there are quicker ways out of debt, again, it depends on your personal circumstances as to which is the right choice.
    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: 90 Forumite
    Tenth Anniversary 10 Posts Combo Breaker
    Snap we have similar debt and I've taken the same steps, stopped paying cancelled my loan direct debits and opened a new bank account for my salary to be paid into, breathing space finishes at the end of October and have only missed 2 payments and have received arear notices, I hope it only takes 4-5 months to get defaults but some have mentioned to expect upto 18months, let's hope we both get them sooner as I just want to move on and have something in place ,ie: a DMP up and running but again it's best to wait for defaults so it's not on my credit file as a marker would be.
  • Kakiste
    Kakiste Posts: 1,022 Forumite
    1,000 Posts Third Anniversary Debt-free and Proud! Name Dropper

    How much did u owe? 

    I'm at about 28k, will this be too much?

    I think I'll have 4/500 a month spare
    I owed just shy of £50K in total. 
    Bottom line; 
    £49k paid off 
    Car HP paid off
    Debt Free!
    Saved Escape fund and moved out. 

    Current focus; saving Emergency fund
  • Rob5342
    Rob5342 Posts: 2,142 Forumite
    1,000 Posts Second Anniversary Name Dropper
    edited 20 October 2022 pm31 6:25PM
    What you have laid out sounds like a good plan. It's quite an odd setup as you have to ignore your creditors completely to start with to get defaults, if you start posting straightaway they treat your far worse by giving you arrangement to pay markers.

    I have a Starling account and they are great, without having to pay for branches they can put money into a really good app.

    Depending on the age of the debts you may want to ask for the CCA to see if any are unenforceable. That's probably best to do a bit further down the line when they have defaulted and are with debt collectors.
  • So likely 3/5 months before contacting DMP people?
  • Rob5342
    Rob5342 Posts: 2,142 Forumite
    1,000 Posts Second Anniversary Name Dropper
    So likely 3/5 months before contacting DMP people?

    I'd say that's a reaslistic sort of time to start getting defaults. You can manage it yourself if you like, that's quite easy, then you can start paying them as they default.
  • peteuk
    peteuk Posts: 1,818 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Personally I wouldn’t wait for the default before contacting step change (or whoever you plan to have your DMP with) 

    Also contact your debtors and advice them of the situation, they may be able to stop some of the actions a non payment will cause (telephone calls, some letters) or you could make token payments whilst the DMP is set up.  Equally thy may be able to freeze interest for a short period,
    Proud to have dealt with our debts
    Starting debt 2005 £65.7K.
    Current debt ZERO.
    DEBT FREE
  • I started my DMP about a year ago and did it diffrently as I had not been on here first. I called Stepchange with about 38k and no default. I did 'breathing space' for a period of a month or so, in that there are no payments to make and interest is frozen. Then I sorted out moving my bank account, had been with barclays for 30 years but they were my biggest creditor. Went with Starling and its is a much better account. Was Made redundant in March so that is now my emergencey fund.
    Good luck
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