Payment Arrangement

tksnota

@RAS - if I’m in DMP, will it be considered as Arrange To Pay. If so, how can stop paying if my DMP requires me to pay regularly

What do you mean “afterwards generally they don't bother if they are getting some money”

What’s a CCJ and what’s transpired if I need to attend to court? Please explain it to me like a 5 years old

What’s a charging order on the property. I know I will not be forced to sell but if I do sell will I just pay the amount in the order. Can I settle the order before selling if so what’s the possible approach?  Please explain it to me like a 5 years old

EssexHebridean

If you enter into a DMP without the debts having defaulted, interest will continue to be charged, and you will probably get an arrangement to pay marker, yes. 

Stop paying to any debts that have not yet defaulted - and wait until they default before making further payments. You will get letters confirming the defaults I believe, and this will also show on your credit files. You simply stop paying anything to those debts.

It sounds like you would do well to hold back on entering a full DMP until all the debts have defaulted - you can make payments to those debts which already have defaults, and also work on building your emergency fund, in the meantime. 

RAS means that once the debt is defaulted and you are then making payments, even if small, there is only a slim likelihood of you being chased further legally - ie for the creditor to obtain a County Court Judgement (that is the CCJ mentioned). 

Ignore the CCJ and charging order aspect for the time being - both are unlikely anyway, and is just complicating things - better that you fully understand the things that might happen before worrying about things that probably won't. 

tksnota

Thanks.

@EssexHebridean - so when I see defaults on any of my creditors just pay the amount I can pay. Eg CC min £500 but I can only pay £5. Is this right?

How do I pay these defaulted loans? Do I need to call or pay online?

I’d used national debt line’s budget calculator and it showed after paying priority expenses I’m left with a negative value

1. Will IVA not be applicable due to the negative value? Will it be the same with DMP?

2. I might be able to spare £1 payment for the 9 creditors. How will this affect me about my mortgage like forced to equity release especially for a new fix happening next year?

3. Due to the large amount of loan and the increase of new fix the £1 token payment might stay long. What will be the consequences of being in this situation?
4. Can I still get a new fix even just paying £1 token?

EssexHebridean

tksnota said:

Thanks.

@EssexHebridean - so when I see defaults on any of my creditors just pay the amount I can pay. Eg CC min £500 but I can only pay £5. Is this right?

How do I pay these defaulted loans? Do I need to call or pay online?

I’d used national debt line’s budget calculator and it showed after paying priority expenses I’m left with a negative value

1. Will IVA not be applicable due to the negative value? Will it be the same with DMP?

2. I might be able to spare £1 payment for the 9 creditors. How will this affect me about my mortgage like forced to equity release especially for a new fix happening next year?

3. Due to the large amount of loan and the increase of new fix the £1 token payment might stay long. What will be the consequences of being in this situation?
4. Can I still get a new fix even just paying £1 token?

The line I have marked in bold is a gamechanger - in the event of you having insufficient income to meet your priority expenses you do not pay anything to unsecured debts. Your priority bills ALWAYS come first. 

I would suggest that you will in the Statement of Affairs we signpost people to here - the link is in my signature below - then choose the "format for MSE" option, and copy and paste the results into this thread. we will then be able to make further suggestions. 

tksnota

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... [b]

Monthly Income Details[/b]

Monthly income after tax................ 1800

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 1800[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 500

Secured/HP loan repayments.............. 450

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 100

Electricity............................. 100

Gas..................................... 0

Oil..................................... 0

Water rates............................. 35

Telephone (land line)................... 0

Mobile phone............................ 20

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 80

Groceries etc. ......................... 450

Clothing................................ 0

Petrol/diesel........................... 150

Road tax................................ 0

Car Insurance........................... 80

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 20

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 0

Haircuts................................ 0

Entertainment........................... 0

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1985[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 400000

Shares and bonds........................ 0

Car(s).................................. 25000

Other assets............................ 0[b]

Total Assets............................ 425000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 220000...(500)......0

Secured Debt.................. 78000....(150)......0

Hire Purchase (HP) debt ...... 34000....(300)......0[b]

Total secured & HP debts...... 332000....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

MBNA ..........................20000.....0.........0

Zoya...........................35000.....0.........0

Natwest .......................10000.....0.........0

Currys.........................7000......0.........0

Argos..........................2000......0.........0

John Lewis ....................5000......0.........0

First Direct...................10000.....0.........0[b]

Total unsecured debts..........89000.....0.........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,800

Expenses (including HP & secured debts). 1,985

Available for debt repayments........... -185

Monthly UNsecured debt repayments....... 0[b]

Amount short for making debt repayments. -185[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 425,000

Total HP & Secured debt................. -332,000

Total Unsecured debt.................... -89,000[b]

Net Assets.............................. 4,000[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

tksnota

I didn’t include my wife’s salary and all cost was divided into 2 except for petrol, car and grocery. Not paying any of the unsecured loan waiting to be defaulted. The negative value is being offset by my wife salary.

can they petition for bankruptcy due to negative earnings in order to sell my property and pay the unsecured debts

tksnota

@EssexHebridean - so when I see defaults on any of my creditors just pay the amount I can pay. Eg CC min £500 but I can only pay £5. Is this right?

How do I pay these defaulted loans? Do I need to call or pay online?

I hope you can provide your answer 

hoverFrog1

First of all, complete an income and expenditure form with all your income and outgoings on it including the 11 creditors. Then remove the 11 creditors and any other unsecured debt and work out how much expendable income you have. That amount should be divided among the 11 creditors in proportion to how high the debts is. For example if you own 10 creditors £1,000 each and one creditor £10,000 (£20,000 total debt) then you arrange to pay half the debt to the £10k debt and 5% to each of the other 10. If your expendable income is £100 per month then that's easy to sort out.

I would strongly suggest finding out first if the debts are enforceable under Section 77 and 78 of the Consumer Credit Act. Use the Prove It letter on this site. Stop paying them and wait for an answer. They have 12 days and will probably get round to replying in about three to six months. Until they prove that you owe them a debt, they can't begin to recover the money. They can ask or demand, but they can't take you to court or begin recovery processes.

Once you have proof that you owe the debt then make them an offer based on the expendable income that you have. No court will ask you to pay more than you earn and need to live on and no creditor (expect for loan sharks) will do so either. They'll try to convince you to pay others less but if a court got involved they'd throw such a payment plan out.

Keep your expendable income that you're not repaying debts with somewhere safe like an ISA or savings account and treat all 11 creditors as real even if they don't reply to you. They have time on their side. If they sell your debt to a collection agency, then stick to your offer. If you earn or save enough to cover about 55% of one of the debts (probably the smallest that have proven that you have to repay the debt) then make a full and final offer for 30% of the debt. If they reject it, go up 5% until they accept it. You might get away with paying less than half. It's worth asking.

You have to know what you can afford before you start this otherwise you'll just be juggling debts again. It is perfectly reasonable to keep a reserve for emergencies like if your fridge or washing machine breaks. You'll need to update your I&E every year and renegotiate with your creditors every time your circumstances change but this keeps your head above water and the debts properly managed. It is also more than a Debt Management Company will do for you.

tksnota

@hoverFrog1 - is this like a DMP? I want to do a token payment for a year or two until I get my mental situation sorted out because of the scam. 

I read that petition to bankrupt might be possible if the token payment has been too long. Will that be possible?

RAS

You need to do a full SOA with both incomes and all expenditure.

If you are really spending £900 per month on groceries, that needs a major look as as half that would be reasonable, whilst with the sort of secured debts you have, it might be wise to cut back even more.