Sorry angry rant about DMP, banks, ruined my life, prob bit dramatic but so fed up

Tamar7

Hi, I've been on a DMP for two years, trying to do the right thing. Unfortunately, I was poor (you know that not poor enough for help towards education fees, but not rich enough to afford them and over reached in terms of an education so accumulated debts having paid fees with credit, loans and overdrafts. Also I never managed to get a job near my parents, so couldn't move home and now I've a nephew, there's no room at the inn.

I did get a degree, a post grad nursing qual and an MSc in global health.....I at least went for useful qualifications. I earn £44k, which thought was good, till tax,  NI, student loan, post grad loan, pension and any other tom, !!!!!! or Harry takes the £1200 a month away. To top it of I sensibly got a debt management plan when I could cope...I'm in the cheapest shared place have a car on finance because I couldn't get enough to buy an old one even and it's electric so no petrol fee. But and here's the truth about debt management.... The banks will initially say yes and agree...but now after a few years all your accounts send you a letter saying, we know your being sensible, but we're going to punish you with a default notice for every account, ruining your credit for 6 years (I'm 43, so that's a long time to me) even tho my DMP payment is more than the minimum payment amount...they still do it. Oh and now they all have to tick the sensitive to mental illness box so finish calls with " is everything ok?", Even when I say no, my life is ruined, you still get the reply " ok, the letter will be in the post"????

Right now I've another 18 months of my DMP,  nothing extra to pay towards it. I've done soo many budgets over the years and reduced everything all the way down...I shop once a month and have one small meal a day, no coffees and sit at home and read every weekend...all my clothes are of eBay for under £5, I don't have a dentist or optician. All my money pays rent, my car, parking at work and food and electric. Oh and i have a cat...ive tried a second job, but my first has long hours, and I ended up ill and not able to keep it up, it didn't mat that much anyway after higher tax... .but so far I have 4 defaults, more to come,  by the time I've no debt ( I've £8k left) and tried to save and had the defaults off my credit rating I'll be fifty odd, still in a shared house working till I'm 68.

I honestly feel a) like I'm being continuously punished for doing all the right things and b) have nothing to look forward to... My biggest question at the moment is what is the point? If anyone has any magic answer to paying things off quicker, earning more ( I'm new at this work place so it's a no for pay rise) or just generally getting myself out of this hole..I'm all ears. 

sourcrates

This is why we advise pre-planning, and a prolonged period with no payments to creditors, prior to starting debt management, so all accounts get defaulted early, so you know when the 6 year window will be up, and the defaults fall off your file.

The alternative is arrangement to pay markers, and/or late defaulting, as you have experienced.

You can complain to lenders and ask them to backdate the default to when you first entered debt management, not everyone is successful, but its worth a shot.

As for paying debts off quicker, there is no magic formula unfortunately, are all your debts enforceable, have you done CCA requests ? some may not have the correct legal paperwork, i was going to mention insolvency, then saw you only had 8k left to pay, so not really an option.

Best you can do is try and save some cash, and in a couple of years make offers to settle perhaps, or if the debts are that unaffordable, consider asking your creditors to write off the balances due to affordability issues, many people have been successful that way.

Sorry I can`t provide any advice much better than that.

Floss

Could I ask who your DMP is with?

Rob5342

It's very wrong, if you make an effort to contact the creditor and make an arrangement to repay the debt then you get treated worse in terms of your credit report than someone who completely ignores the debt.

I started a DMP two years ago and made the mistake of starting it straightaway. It was what Stepchange advised and seemed completely logical at the time, but after a year I found out from this forum that defaults are far better in the long run so I stopped paying the ones that hadn't defaulted to try and get default. Most of them have defaulted now but Virgin still haven't defaulted me after a year on a DMP and another year of not paying. I made a complaint to Virgin asking them to apply a default and a back date it but they refused so I have now escalated it to the financial ombudsman service. It was a slightly bizarre response as they said they were unable to apply a default, but watned me that they might apply a default if I didn't make a payment.

Tamar7

I'm on a DMP through payplan as my banks had got quite unpleasant when I asked directly for help or advice. In terms of default, they've even said if I was paying what I am, but not via a DMP, I wouldn't even be defaulting as it's higher than minimum. But because it's DMP, they have to default?? And won't back date it. I did struggle for sometime prior to the DMP and basically had to sort it as the breathing space had run out, fora few months it was great, then a vet bill, Christmas, job change later it just became a millstone. I'm a budget holder at work too so insolvency would have implications and both my old banks have been very clear about me paying in full...even my overdraft that was sold to a recoveries company suddenly. 

kimwp

So were there any missed or lower-than-minimum payments?

Tamar7

Unless you count the breathing space pauses, no. No missed. The loan DMP was lower than the original payment and I don't think there's a minimum for overdrafts, more of a timescale than monthly minimum. 

kimwp

Tamar7 said:

Unless you count the breathing space pauses, no. No missed. The loan DMP was lower than the original payment and I don't think there's a minimum for overdrafts, more of a timescale than monthly minimum. 

Just wondering about the defaults /timing of the defaults. Why are you on a dmp if you are paying more than the minimums?

fatbelly

You've got some defaults with maybe some more to come. You might as well make that work for you.

Your creditors should be open to settlement offers. The order of events would be:

1. Stop making payments to the dmp. You can thank Payplan for their service but you'll be dealing with things yourself now.
2. Save the dmp amount each month into a fighting fund
3. Ask all relevant creditors for a cca - this is a formal request under the consumer credit act so doesn't apply to mobile phones, utility debts or overdrafts. If they can't produce one the account is unenforceable.
4. Consider any affordability claims for inappropriate lending: debt camel in a mine of information e.g.
https://debtcamel.co.uk/affordability-complaint-credit-record-faqs/
5.Allow at least 6 months to let the fund build up and the creditors to work through their angry letters
6. Offer an amount to settle enforceable debts using National debtline standard letter (no double debt camel has one too - she has everything)

Tamar7

I should clarify its the credit cards Im paying more than the minimum, it was the overdrafts and loans I was struggling with, and I guess once I'd started the payplan DMP process, it sort of snowballed into paying all the credit too. I think there was alot of advice at the time about it being the sensible option...in hindsight I wonder if I'd been better off just struggling on without the DMP. But the banks with the overdrafts were putting crazy fees on them and starting the multiple phonecalls... In the past when I was a student I had to report a major high street bank for phoning me 34 times a day. They even interrupted their own phonecalls with two or three phone handlers ringing me at the same time and all they would say is "you need to put money into your account" it was mad, at one point they tried to stop me physically  leaving one of their branches because my payday was two days away and I couldn't pay £2000 immediately. I also had depression at the time,  so you can see why I'm not a fan of the banking system...but work won't pay cash.... Anywho, the overdrafts were beginning to go down that road..so I figured getting a company to deal with all that rather than me sounded like a good plan...nothing easy though I guess.

kimwp

Seems odd that they can default your account when you haven't defaulted on payments. 

I think the best thing to do (kind of in addition to what fatbelly says above) is to take another look at your finances with the help of people on this board and figure out the best course of action. One small meal a day isn't sustainable, so your dmp isn't working for you at the moment.