Should I default before a DMP will this affect my work?

Hello, I wonder if you can help me I was going to start a DMP before I came across these forums tell people to stop paying and default first. Just some questions as this scares me cause I’ve never missed a payment but most my wage is going on debt so need to do something. 

First if I have 3 loans what if one defaults first like at 3 months but others take months do I have to start paying the first default one or wait for the others to default as well?

Second, one of my loans is with Sainsbury’s bank and I work for Sainsbury’s retail. Will this affect my job and work? 

Third, I want to carry on paying my car loan which is separate is that still okay to do while defaulting on the others ? 

So if I want to a dmp, the best thing to do is use a different account stop paying the loans and credit card minimum payment and don’t pay my overdraft just let it default ? 

Thank you  
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  • RAS
    RAS Posts: 32,475
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    Everyone who plans to go into a DMP is advised to set up a new basic bank account with a provider to whom they own nothing. Otherwise they can offset debt, although that happens less.

    Who is the car loan with and exactly what sort of loan do you have and what are the rules about termination? HP, basic consumer loan, balloon payment?
    The person who has not made a mistake, has made nothing
  • RAS said:
    Everyone who plans to go into a DMP is advised to set up a new basic bank account with a provider to whom they own nothing. Otherwise they can offset debt, although that happens less.

    Who is the car loan with and exactly what sort of loan do you have and what are the rules about termination? HP, basic consumer loan, balloon payment?
    The car loan is with creation and it’s a pcp for 5 years but I really need the car. 
  • RAS
    RAS Posts: 32,475
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    How close are you to reaching the 50% repayment limit when you can return the car? You might want to keep up the payments until that point.

    Meantime, I'd suggest you budget enough in for car replacement to cover the purchase of  banger when you terminate. It's going to be less than the balloon payment and PCP is generally the costly way for buying a whole car.


    The person who has not made a mistake, has made nothing
  • RAS said:
    How close are you to reaching the 50% repayment limit when you can return the car? You might want to keep up the payments until that point.

    Meantime, I'd suggest you budget enough in for car replacement to cover the purchase of  banger when you terminate. It's going to be less than the balloon payment and PCP is generally the costly way for buying a whole car.


    I got it last year so not for another 4 years, I think I get the vehicle at the end of it don’t have to pay a lump sum already. I was planning to keep paying this loan just couldn’t really afford the others that what’s in saying should I default on my overdraft and the two other loans and my credit card and then contact dmp? But I’ll still pay for this car loan on my new bank account is that okay 
  • fatbelly
    fatbelly Posts: 20,258
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    edited 29 December 2023 at 8:19PM
    With a self-managed dmp you can do what you want

    There should be no impact on your employment.
  • fatbelly said:
    With a self-managed dmp you can do what you want

    There should be no impact on your employment.
    Okay thank you. So should I default on my payments then before starting a dmp? Also can I still pay for my car loan as I have budgeted for this and I need it will that affect a dmp? 
  • Brie
    Brie Posts: 9,364
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    imikey97p said:
    Hello, I wonder if you can help me I was going to start a DMP before I came across these forums tell people to stop paying and default first. Just some questions as this scares me cause I’ve never missed a payment but most my wage is going on debt so need to do something. 

    Second, one of my loans is with Sainsbury’s bank and I work for Sainsbury’s retail. Will this affect my job and work? 
    Great that you are facing up to the fact that you have things to get sorted.  That's always the crucial thing.  And great too that you have done some reading here, no doubt seen some success stories which can be so encouraging.  It's always a bit reassuring to know that you are not the only person that this has happened to.

    Did anyone suggest at any point about you posting a statement of accounts (see the top sticky)?  It may be that others will be able to offer some advice on how to better budget.  It's so much easier to see things from the outside at times.  Maybe there's a way not to have a DMP or maybe there's a better solution for you.  

    Your second question doesn't seem to have been addressed by anyone that I can see.  Frankly I have no idea if you default on a loan with Sainsburys Bank will affect your employment with Sainsburys Retail.  I think, quite honestly, it may depend on your role within Retail.  Are you handling cash?  Are you somewhere in management?   Strictly speaking an organisation can only use data for particular purposes but I don't think there is anyone here who can answer this question accurately unless they also work for Sainsburys in some capacity.  

    I would suggest that you need to check your employment T&Cs to see if there is anything in those that might cause concern.  If there isn't anything there then I think you need to find someone in a position of authority that can provide you with information and/or assurance.  If you have a union rep this might be the place to start as they would be dealing with things differently than perhaps your direct manager.   

    The reason I flag this is I know that there are certain positions/roles where official debt issues (DMP, DRO, etc) can affect a person's employment and I think you need to ensure your job is not in jeopardy.  I don't think it is but I can't say that for 100% which is why you need to check.  


    "Never retract, never explain, never apologise; get things done and let them howl.”
  • RAS
    RAS Posts: 32,475
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    Let's start to address the employer situation because we aren't employing the OP so we can't be sure.

    If the OP had a debt in DMP with their mortgage provider, it would have no impact on the mortgage, beyond that that any default would have, and many people here have chosen a new fix with their current provider in that situation. 

    And we know that in the 2008/9 crisis many people who were employed in banking kept their jobs despite going bankrupt, as long as they spoke to their employer first.

    It's unlikely to be problematic but the OP may have a couple of options to test the waters. 
    If their workplace is unionised, then someone in their debt section can contact the employer anonymously and check the impact. 
    If their workplace offers debt counselling as part of their benefit package, they could ask the counsellor to check the rules.
    The person who has not made a mistake, has made nothing
  • sourcrates
    sourcrates Posts: 28,558
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    Make sure you keep paying your essential debts, rent/mortgage/council tax etc.

    You can prioritise your car payment, and also your Sainsburys loan, if that makes you feel any better, and if you can afford to do so, you will be a very small cog in a very large wheel, so it will be very unlikely that any default on your payment would be picked up on by your employer.

    Your account will just go through the normal collection process, you will find communication between such internal departments is very minimal to say the least, its not going to be a problem if you choose to add it to your DMP.

    When you take out any form of credit, you agree to make regular monthly repayments to repay the borrowing, in order to pay less than the contractual payment, an account must first default, which means the arrangement between you ends.

    The creditors you have now will not all be the ones you eventually enter into debt management with.

    Debts are bought and sold on a regular basis, basic course of events is stop paying the debts you want to default, and whilst doing that, save up a good emergency fund.

    Wait 6 months or so, and see who is writing to you, payments can then be set up in online banking, or you can pay on debt collectors own websites, you choose how and who gets what.

    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
  • Make sure you keep paying your essential debts, rent/mortgage/council tax etc.

    You can prioritise your car payment, and also your Sainsburys loan, if that makes you feel any better, and if you can afford to do so, you will be a very small cog in a very large wheel, so it will be very unlikely that any default on your payment would be picked up on by your employer.

    Your account will just go through the normal collection process, you will find communication between such internal departments is very minimal to say the least, its not going to be a problem if you choose to add it to your DMP.

    When you take out any form of credit, you agree to make regular monthly repayments to repay the borrowing, in order to pay less than the contractual payment, an account must first default, which means the arrangement between you ends.

    The creditors you have now will not all be the ones you eventually enter into debt management with.

    Debts are bought and sold on a regular basis, basic course of events is stop paying the debts you want to default, and whilst doing that, save up a good emergency fund.

    Wait 6 months or so, and see who is writing to you, payments can then be set up in online banking, or you can pay on debt collectors own websites, you choose how and who gets what.

    Okay thank you so I should carry on paying my Sainsbury’s  loan and car loan but default my nationwide loan overdraft with Lloyds and my credit card with Barclays! And just find out if the Sainsbury’s one does affect my employment etc and if doesn’t default on that one as well? 
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