Payment Arrangement

tksnota

1. I had a total of 11 creditors and most likely not all of them will default me relatively on the same year. My question if I start with DMP with an Organization will those not defaulted give me arranged payments instead of defaults?

2. Do I just do self manage DMP for individual defaults to make sure the arranged payments will not happen?

Grumpelstiltskin

If you do self managed you can pay what you want to who you want, so the choice is yours.

tksnota

I really want to use step change to handle the DMP but my question if it has been setup before defaults happen will it be considered payment arrangement?

what’s the criteria that creditor’s lodge payment arrangement on credit file?

During the DMP, are there instances wherein some creditors will not do any defaults because of regular payments or all will just turn to default?

Grumpelstiltskin

While  ever you pay and it hasn't defaulted it will be marked Arrangement to Pay, which means it will only drop off your Credit Report 6 years after the last payment is made. This is why you are pushed to stop paying and let it default.

Some creditors are very slow to default while others act quickly this is why if you self manage you can pay the ones who have defaulted and ignore the others until they do default. Stepchange won't do this.

RAS

Nothing to prevent you stopping the payments and going with Stepchange once the defaults are recorded.

tksnota

My problem is I want to use stepchange for my DMP but if I start and not all of the loans are defaulted then they will be classified as Arrange To Payment. Is that right?

if I wait for the whole creditors to be defaulted the I might find myself in CCJ because those that defaulted early will not get paid. Is this the case if so what’s the best course of action?

tksnota

Or I just provide the loans that defaulted to step change and add the ones the when they become defaulted? 

Grumpelstiltskin

The chance of you getting a CCJ is very small and the creditor can't just slap one on you they have to go through a procedure the first part of which is a letter before action which must be sent to you by snail mail. Even if you receive that you can sort it out before it gets as far as court.

So that is why our advice is stop paying, save as much as you can in an emergency fund, maybe send CCA requests, and when all have defaulted look at your situation again.

The worse thing you can do is panic.

RAS

tksnota said:

My problem is I want to use stepchange for my DMP but if I start and not all of the loans are defaulted then they will be classified as Arrange To Payment. Is that right?

if I wait for the whole creditors to be defaulted the I might find myself in CCJ because those that defaulted early will not get paid. Is this the case if so what’s the best course of action?

There is nothing to stop you paying a small sum monthly to those creditors who have already defaulted a debt.

Do however make sure that you have first put aside the money you are no longer paying toward creating a good emergency fund because that means you don't end up with emergencies when you no longer have access to credit. And make sure your monthly budget has enough to cover annual costs, just divide by 12 and transfer to a separate account, or accounts, each month.

tksnota

@RAS - like I said I just migrated to the UK and scam this year so apologies for my questions. can I pay small not the minimum amount for those all unsecured loans that are defaulted early while waiting for the rest? Is that what you are telling me? Please advise how I can do the small payment e.g. online, email, call, etc.

@Grumpelstiltskin - like I said I just migrated to the UK and scam this year so apologies for my questions. How does the CCJ work assuming I need to face court? What will happen if I can pay the full outstanding amount? Are you able to advise what’s the indicative timeline to receive a letter of action?

In case I get Arrange To Pay, how do I get it settled early?

RAS

If you get an Arrangement to Pay marker, stop paying and wait for the debt to default. Make sure you get the default on your credit record, not just a threatening letter.

By the way, until the debt is in default, the creditor can't take you to court for payment, and afterwards generally they don't bother if they are getting some money.