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

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Comments

  • sourcrates
    sourcrates Posts: 28,858 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    edited 30 December 2023 at 12:21AM
    Yes, as long as you can make a workable budget, and can afford to pay it.

    Do what you have to do to balance the books, being self managed allows you to do whatever you choose, if you went with the likes of stepchange, you must follow their doctrine, but going self managed means you do as you see fit.

    Self managed is just a fancy name for paying your own bills, but at a lower monthly amount than originally agreed, that`s all, its nothing more than that.

    You will get standard collection letters, and possible phone calls to begin with, you can pretty much ignore such collection activity, as they are just attempting to find out (A) why payments have stopped, and (B) to get you back on track again, none of which you really want to be doing.

    Obviously take note of any letters, and if you don`t understand the content at any time, post back on here, someone will be more than happy to explain things.
    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 forumteam@moneysavingexpert.com. 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
  • Yes, as long as you can make a workable budget, and can afford to pay it.

    Do what you have to do to balance the books, being self managed allows you to do whatever you choose, if you went with the likes of stepchange, you must follow their doctrine, but going self managed means you do as you see fit.

    Self managed is just a fancy name for paying your own bills, but at a lower monthly amount than originally agreed, that`s all, its nothing more than that.

    You will get standard collection letters, and possible phone calls to begin with, you can pretty much ignore such collection activity, as they are just attempting to find out (A) why payments have stopped, and (B) to get you back on track again, none of which you really want to be doing.

    Obviously take note of any letters, and if you don`t understand the content at any time, post back on here, someone will be more than happy to explain things.
    Okay thank you. Just very daunting as I’ve never missed a payment and it just seems so weird to default on my loans rather than start a dmp straight away. But how do I know when it defaulted when it gets passed to another debt company? So do you think I’m doing the right think in opening a new account and let the loans I can’t afford and overdraft go in default? What about extra charges? Also I have a credit card that I haven’t used what happens to that it’s with a different bank I’m not planning to touch that haven’t for ages. 
  • sourcrates
    sourcrates Posts: 28,858 Ambassador
    First Anniversary Name Dropper First Post Photogenic
    edited 30 December 2023 at 11:08AM
    Yes it does seem strange at first, go`s against the grain I know, but your situation is that you cannot afford your contractual repayments, so some pro-active measures are required from you, as no one else will do it for you, and what is the alternative? not eating or not paying some other essential debt? that won`t work, so defaulting and debt management is the only thing you can do to put this right.

    Now due to the cost of living crisis, lenders are being urged not to default accounts that are in arrears as quickly as they normally do, but that won`t help you much, best advice is as before, stop paying and give it 6 months, see where you are then.

    You may receive a default notice in the post, all perfectly normal despite its official wording, you will be written too if they are going to do this, the same goes for sale or assignment of your debts.

    Yes you will incur extra charges etc at this point, but once defaulted all charges and interest stop, for good.

    The usual way to re-coupe these charges is much later on in the process, debt collectors will make settlement offers to you, so DMP`ers generally end up settling accounts with quite big discounts, this gets you out of debt sooner, and offsets any interest etc added at the start.

    Lots to take in I know, we have a dedicated DMP thread in the sticky section, you can find it here -

    DMP mutual support thread part 13 !! - Page 514 — MoneySavingExpert Forum

    a very long read granted, but it will answer all your questions.
    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 forumteam@moneysavingexpert.com. 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
  • imikey97p
    imikey97p Posts: 7 Forumite
    First Post
    Yes it does seem strange at first, go`s against the grain I know, but your situation is that you cannot afford your contractual repayments, so some pro-active measures are required from you, as no one else will do it for you, and what is the alternative? not eating or not paying some other essential debt? that won`t work, so defaulting and debt management is the only thing you can do to put this right.

    Now due to the cost of living crisis, lenders are being urged not to default accounts that are in arrears as quickly as they normally do, but that won`t help you much, best advice is as before, stop paying and give it 6 months, see where you are then.

    You may receive a default notice in the post, all perfectly normal despite its official wording, you will be written too if they are going to do this, the same goes for sale or assignment of your debts.

    Yes you will incur extra charges etc at this point, but once defaulted all charges and interest stop, for good.

    The usual way to re-coupe these charges is much later on in the process, debt collectors will make settlement offers to you, so DMP`ers generally end up settling accounts with quite big discounts, this gets you out of debt sooner, and offsets any interest etc added at the start.

    Lots to take in I know, we have a dedicated DMP thread in the sticky section, you can find it here -

    DMP mutual support thread part 13 !! - Page 514 — MoneySavingExpert Forum

    a very long read granted, but it will answer all your questions.
    Hello I was advised that my Sainsbury’s bank loan if is stop paying that won’t affect my employment with Sainsbury’s. Question I wanted to ask is, instead of stop paying my nationwide loan I can afford to pay for that still if I stop my Sainsbury’s one plus my nationwide is less than 2 years now while the Sainsbury’s one is for 5 years as I took it out last year. If I default on my Sainsbury’s loan, Barclays credit card and Lloyds overdraft all totalling £9,500 will I get a ccj? Because when they do default I probably could only pay £50 to the three debts I owe 
  • fatbelly
    fatbelly Posts: 20,470 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    edited 2 January at 1:01PM
    It's best to treat all nonpriority debts the same, so stop paying, get the defaults and then set up payments on a pro-rata basis. The car finance can be counted as priority if it is hp or similar

    No-one just gets a ccj. There is a process leading to a court claim, and they have six years from the default to start this. In your timescale you're unlikely to see one, particularly because the courts use the same pro-rata principle, so there is no advantage to it.
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