Any advice appreciated

Emmel

Rob5342 said:

Your plan sounds good to me. Getting defaults is good as it sets things down somewhat. The interest gets frozen, you have a fixed date when they come off your credit record after 6 years and they are likely to be sold to debt collectors who will probably accept reduced payments at some point. Payment arrangements are very bad as they don't come off until 6 years after the debt is repaid, if you have to reduce your in payments at some point that might not be for 10 or 15 years.

Lenders can be very difficult about defaulting but it's worth holding out so you benefit later. I wish that I had waited for default ls before I started mine as nearly two years later Virgin still haven't defaulted me.

Stepchange are good in some ways but they are not very flexible and insist that you treat all creditors the same. That's not very helpful if you want to make a lump sum payment as they want you to split it proportionally between the debts. Doing it yourself is very easy and makes it very flexible as you have full control. There is a Derbyshire CAB site I use for creating my letters. You could always use Stepchange when you start the DMP, and switch to managing yourself later when you are more confident about the process.

Thanks Rob, its very early days for me, so I plan to do as much as I can myself. If I feel at any point I cannot cope or manage dealing with it myself I will then contact CAB/StepChange. I also need to take some time to research DAS as I am in Scotland. Virgin Money is one of my creditors too, so I may also been in for a long wait for that default. Have you written to them to ask for a default?

Emmel

Waiting for defaults and saving while you go is a good solid plan - this is also the time that you will find out if you planned budget works OK for you as well - and can make any tweaks as you need to. You also get to get used to the buzz of seeing money accumulate, not just flowing out - as you build your EF.

Yes this is the plan, see how my budget works for me and if any tweaks need made, I then have a more solid SOA going forward and can produce if requested further down the line

 One word of caution on the idea of having someone else look after your EF and any budget pots you start using - firstly remember that once you had that money over to them in the eyes of the bank it is theirs - you don't mention whether you are married I don't think but if you are not, in the event of anything happening to your OH (and while I know that's never something we want to think about, practicalities mean that it should be considered) and them not having a will stipulating their assets to go to you that money they are looking after for you will be out of your reach, and will potentially end up going to someone else - so be mindful of that.

Yes, we are married, but for now I have set up pots in my bank account and have placed all this months money in them appropriately. I cannot see them unless I click on that section so I think this is helpful as out of sight out of mind.

 Also - one of the lessons you need to start learning is how to have money in the bank and not spend it, while not being able to spend it because someone else has control of it seems like a good idea on the face of it, you're not actually learning money management by dealing with things that way. I'd suggest starting out with a compromise - something like a limited access savings account can work well for an emergency fund - because you get limited to something like 6 withdrawals per year before you get hit with an interest penalty, you'll be far less inclined to take money out other than for a proper emergency. Set up to get interest paid monthly and that also works as a great motivator, too! 

learning not to spend is definitely something I need to do. OH is very much of the opinion of make do and buys very little, I was the opposite but I now need to change my ways to clear my feet and get out of this mess. I do not need anymore things. I do have a hobby but its free now I have the equipment I need. 

One note about using the letters as suggested above to help with self managing a DMP (DPP) - you would need to find specific versions that are intended for use in Scotland as certain aspects of the law relating to debt management are different as I think Sourcrates has already mentioned. The period of limitations is also different in Scotland - 5 years rather than our 6 down here. 

Yes this is something I need to research on, and DAS incase it is a route I need to go down further on. I need as much knowledge as I can.

Thanks for your reply

Rob5342

Emmel said:

Rob5342 said:

Your plan sounds good to me. Getting defaults is good as it sets things down somewhat. The interest gets frozen, you have a fixed date when they come off your credit record after 6 years and they are likely to be sold to debt collectors who will probably accept reduced payments at some point. Payment arrangements are very bad as they don't come off until 6 years after the debt is repaid, if you have to reduce your in payments at some point that might not be for 10 or 15 years.

Lenders can be very difficult about defaulting but it's worth holding out so you benefit later. I wish that I had waited for default ls before I started mine as nearly two years later Virgin still haven't defaulted me.

Stepchange are good in some ways but they are not very flexible and insist that you treat all creditors the same. That's not very helpful if you want to make a lump sum payment as they want you to split it proportionally between the debts. Doing it yourself is very easy and makes it very flexible as you have full control. There is a Derbyshire CAB site I use for creating my letters. You could always use Stepchange when you start the DMP, and switch to managing yourself later when you are more confident about the process.

Virgin Money is one of my creditors too, so I may also been in for a long wait for that default. Have you written to them to ask for a default?

Yes I wrote to them in the middle of December to complain that they hadn't defaulted me but they are saying they don't have a record of my my complaint at the moment. I entered a DMP in June 2021 and stopped paying them in June 2022 to try and get a default but they still haven't given me one. It's very frustrating as I want to move on from my debt problems but it's still dragging on because of them. All of my other creditors have defaulted me, some like Barclaycard were brilliant and backdated the defaulted to the day I started my DMP. It's almost like Virgin are being spiteful and want to make things as hard as they can for me by not defaulting.

Emmel

How annoying for you Rob. I will only be approaching my first month of missing payments so i still have a fair bit to go until i see any defaults, but im looking forward to being debt free in the future. 

Emmel

I have now started a diary to keep track of my progress. Still only a couple of missed payments but there will be more to follow

Emmel

I have started a DFD, but i have a question if anyone can help.

i have a couple of small debts £700 each, am i better to try pay these off than let them default? 

Thinking behind this is that its better to clear them that have them dragging on trying to get a default and have interest added on? They are both currently 0%

sourcrates

Emmel said:

I have started a DFD, but i have a question if anyone can help.

i have a couple of small debts £700 each, am i better to try pay these off than let them default? 

Thinking behind this is that its better to clear them that have them dragging on trying to get a default and have interest added on? They are both currently 0%

Assuming you mean DMP (Debt Management Plan) then yes, if you want to do that, as they are both 0%, there is little point in having them default, so its your choice, and probably a good one.

Emmel

Hi sourcrates, i meant debt free diary, not dmp, however my diary is mainly just me posting so i hoped by added it here someone who commented previously like yourself would see it and offer an opinion. Thanks again

Emmel

I now have 3 defaults, are cca requests necessary? The amount on my credit report, is there any more interest added to this by credit companies etc? Do i now just get in contact with the companys who are sending me letters that have defaulted? 

sourcrates

Once defaulted, all interest and charges stop, for good.

Original creditors lose interest in defaulted accounts pretty quickly, they will either sell your debts, or assign them to collectors to manage within a few weeks, personally I would wait until said collector writes to me, payments can be made from DCA`s websites, payment plans set up etc etc, much simpler to wait, then you don`t have to do things twice.