3 months in, no defaults yet

Heisenberg01

I started a thread back in Oct about going down the DMP route, took the advice, moved salary to a safe bank account and stopped payments.

Have received many letters and phone calls asking for payment which I have ignored, however got one today and to quote"  if we don't hear from you in ten days we will take further action"  and " well send a default, this means if you dont repay the amount you are behind on by the date of the default, we can end your loan agreement  and look to recover the full amount, not just what your behind on".

Anything to worry about, or is thus what I need to happen?

Not contacted Stepchange yet, as not had any defaults 

H

RAS

The letters will be computer generated.

If I recall correctly, banks and other creditors have to let you know that they can recall the whole sum before they are allowed to default the account.

So the desired default may not be to far off.

Hope you are squirrelling away whatever you might have sent into your emergency fund?

Heisenberg01

RAS said:

Hope you are squirrelling away whatever you might have sent into your emergency fund?

Yes, but Christmas put a dent in it.

RAS

Which really proves that your budget needs to factor in annual events. After all, you know when Christmas and the birthdays are.

So add up, divide by 12 and put in your budgeting account. Do the same for holidays and anything like insurance that is cheaper paid annually, as well. Stops unpleasant surprises and keeps your emergency budget safe.

Heisenberg01

RAS said:

Which really proves that your budget needs to factor in annual events. After all, you know when Christmas and the birthdays are.

So add up, divide by 12 and put in your budgeting account. Do the same for holidays and anything like insurance that is cheaper paid annually, as well. Stops unpleasant surprises and keeps your emergency budget safe.

Yes  good feature with starling bank, can have a lot of different spaces to pay into everymonth.

Rob5342

That's standard wording, I've had letters for four different debts saying that the whole amount will become payable, all that's happened is that the debts were sold to DCAs who took the monthly payments I offered without question.

These letters are often worded to try and scare you into paying, legal action may come eventually but it's a long way off. "we will take further action" at this stage just means they won't completely forget about it.

Heisenberg01

Afternoon all.

So 4 months after cancelling all payments, I've only had one debt defaulted and gone debt collection agency (tesco credit card). Pretty sure they will be in contact soon.
Should I negotiate payment arrangement with them whilst I await the others, or ignore untill the other company's catch up?

Not contacted step change yet as bank and most credit card company's still asking me to contact them and agree repayment scheme. Thought they would be swifter to recover their dosh.

fatbelly

Have you built up an emergency fund while you have stopped payment?

Heisenberg01

Yes boss..

RAS

If you've got enough in your emergency fund to cope with a major household incident, or three months salary, you could make a token payment to the Tesco card when they get in touch.

To give you an idea one poster here had: partner made redundant with little payout, domestic disaster and the car essential to get to work blew, up in the space of a year.

So could you navigate job loss, something household really needing replacement, and additional transport costs? 

Do check out Martin's briefs on the best easy access savings accounts, too.

SusieT

Congratulations on getting the first default, you could start to pay them something if you have worked out the budget you will be living to and are going self managed, or wait to be contacted and then go through Stepchange. Using Stepchange to start is probably easier as they will take all the queries from the creditors and you will just have 1 payment going out each month, rather than possibly being tempted to pay a bit less this month if you do not stick to the budget. 
Well done for getting the emergency fund (and hopefully the bills fund) started as well, there are a lot of failures to do that and when something goes bang, or a birthday/insurance hits its panic time