DMP plan

Hi all,


I will save you all the time reading my “head burried in the sand” post. While waiting for my account to be approved I wrote a lengthy first post detailing my plan for an Iva thinking this was the way to go, speaking to Iva.org, however after doing some sums I could have this fully paid off within 5 years, filled in the online form for stepchange, did the same with pay plan and spoke on the phone, a DMP is the way forward. 


51,000 debt, 4 credit cards, all within 6-10,000 balance, 6 loans, from £648-£3200, and PayPal credit at £4000. All opened within last 7 years 


I was going to go through PayPlan straight away, went through my finances with them and £1280 priority debts, approx £1000 (slightly inflated to allow a bit extra for savings/leisure) towards groceries, fuel, other expenses etc, leaving approx £750 per month to pay towards credit, this is the figure Payplan would be using. However after lots of reading on this forum, I’m thinking of letting my debts default and going self managed, while waiting for defaults, I am hoping I could bank £1000 per month while waiting for defaults and potentially get good settlement offers to pay some of the smaller loan off straight away. My current account has no affiliation with any debts, no overdraft etc.


Plan of action 


  1. set up second account with monza for saving - DONE
  2. Cancel direct debits - in progress
  3. Awaiting default notice
  4. Aim to get settlement offers from smaller loans / start paying payments to creditors/DCA


Few questions 


- Does this plan look ok? I’m sure the answer to this is yes.

- I still cancel and default on credit cards still on 0%? 

- To confirm - no contact with creditors until a default is on credit file. Email lender/DCA that I am setting up a DMP with pro rata payment they will be receiving, ask for payment details to set up standing order. Do I have to supply income and outgoings to them? 

Kind regards

Comments

  • sourcrates
    sourcrates Posts: 28,520
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    That sounds like a good plan to me, keep in mind defaults are taking longer due to the current cost of living crisis, it could be a while.

    Debts are bought and sold all the time, your current creditors may not be the ones you eventually enter debt management with.

    Deciding what you pay is up to you, most debt collectors wont bother asking for proof of income etc, you are under no obligation to tell them anyway.

    The normal course of events is once regular payments cease, the collection process kicks in, letters/calls etc, accounts may then be assigned to debt collectors, or sold to 3rd parties, somewhere in the mix you will hopefully be defaulted, collection letters may threaten all kinds of consequences, the only thing to look out for is a "letter before action".

    That would signal impending legal action, so would need to be addressed, its would be unlikely at this early stage, but is something to be aware of.
    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 [email protected]. 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
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