DMP or 'just pay your debts', nothing in between?

dnjanjnnkndk

Thanks, and apologies for being a little defensive. It’s just that I’ve made really great progress with paying debt back last 18 months or so and I can really see a way out of this hole over 4 years (I have a detailed forecast). DMP would be easier but it means I can’t do anything for/with my partner until 2030.

@fatbelly do you know if/how breathing space affects your credit record? The way it reads to me is that you can get 60 days of no interest til you decide what to do, but still have to make minimum payments. While minimum payments do stretch me, I am able to make them, and if I can get my minimum payments into 3 figures (should be achievable in 6 months), that makes life almost affordable.

fatbelly

I'm not a huge fan of formal breathing space, though there are some situations (like imminent eviction) where I can see it is useful.

I don't think there is a definite answer but there is no specific marker for BS  - and as long as you are not three months behind there should be no default. It's not an 'arrangement to pay' either so if they did put a marker on your file you would have a valid complaint.

dnjanjnnkndk

Thanks @fatbelly. Why are you not a fan? Sounds like a good way to relieve pressure and worry while deciding what to do? What are the downsides?

I´ve just spoken to an advisor after your advice, and they've confirmed that as long as keep up minimum payments during the 1-2 months on the scheme, there is no negative mark on credit record, and no interest and fees. So I might go for that while I decide what to do. Sounds like in the worst case I'll save a couple of months' interest?

sourcrates

dnjanjnnkndk said:

Thanks @fatbelly. Why are you not a fan? Sounds like a good way to relieve pressure and worry while deciding what to do? What are the downsides?

I´ve just spoken to an advisor after your advice, and they've confirmed that as long as keep up minimum payments during the 1-2 months on the scheme, there is no negative mark on credit record, and no interest and fees. So I might go for that while I decide what to do. Sounds like in the worst case I'll save a couple of months' interest?

Apologies to yourself and fatbelly for jumping in here, but its simply not long enough for those in persistent debt, anyone can just ignore collection demands for 60 days, its nothing in the grand scheme of things, the debt advice industry wanted a minimum of 6 months, but instead got 60 days.

Nothing happens fast in debt collection, you can ignore calls for payment for far longer than that before any affirmative action takes place, the collection process can take up to a year, even more in a lot of cases, which is why we wanted regulation to back up what is already reality, but it was a step too far apparently.

fatbelly

That's pretty much why I'm not a fan. It was introduced as a very labour-intensive bureaucratic process which gives minimal benefit to most clients.

It was clearly introduced by people who don't understand the debt process.

For the situations where it does have benefits, like blocking evictions, you know the other side will kick back and there may be a court challenge.

Debt Camel takes a more diplomatic approach

https://debtcamel.co.uk/debt-breathing-space-help/

theoretica

dnjanjnnkndk said:

Surely it is also more beneficial for my creditors to give me a prolonged interest free period and then charge me interest again, as opposed to see me go on a DMP and get no interest at all going forward?

The loan companies don't care about you in particular - the question for them will be what if lots of their debtors did something.  And during any interest free period, especially now, they will be losing money through inflation.

gwynlas

It sounds as though you are doing a self managed DMP already so you can continue in this way by negotiating with each of your creditors individually perhaps snowballing to clear smaller debts and getting rid of some minimum payments. Stepchange operate by making proportionate payments out of remainder of your SOA interest free being fair to all creditors.