Stepchange Debt Management Plan

tigergambit

Rob5342 said:

tigergambit said:

Debt2022 said:

enthusiasticsaver said:

Yes you should save for emergencies while you wait for  the defaults and for the DMP to be set up.  Make sure the accounts are defaulted before you start paying. I would close the credit cards. They won't affect the DMP but it is normally against the rules to use further credit once a dmp is set up and removing temptation sounds like a good call. 

Thanks, how long does a DMP take to set up? I feel like that Stepchange will send me the monthly bill to pay them way before the accounts I own money to default?  But I dont want to tell Stepchange to wait until my accounts default as I want this sorted out.

So, in summary, don't worry about sorting it out quickly. If you'd like someone to do the negotiating with you use Stepchange or Payplan or one of the other FREE DMP charities but don't be rushed into starting payments before you are ready.

Stepchange don't do any negotiating, they simply tell the creditors the figures that came out of your budget and send those payments to the creditors
 How someone handles it is a personal choice, but they should be aware that there is no negotiation involved.

The choice of self managed or Stepchange doesn't really matter to begin with as you can switch between them at any point. The important thing is to default before starting the DMP as following Stepchange's advice to start repaying immediately can have some serious long term negative consequences for your credit report. 

Yes, sorry, wrong word, should have read "someone to do the paperwork with you".

I was so relieved to find a way out that I allowed Payplan to rush me into a DMP before defaulting and at the wrong level. With the benefit of hindsight I would say that defaulting first is much preferable.

Rob5342

It was the same for me. I started a DMP with Stepchange straightaway as that's whet they advised, and I ended up on a Payment arrangement with Virgin. I went self managed after a year and stopped paying Virgin but they didn't default me for another 18 months. Following Stepchange's advice meant my credit report is harmed for longer that it would otherwise have been.

Hmr123

Hi all. I'm finding these threads hugely reassuring but I want to ask, you talk about letting debts default before contacting step change for example but I presume they don't all default at once so do you wait for all defaults to come through or act on the first one. I presume ideally all would be defaulted before going to a dmp company but it feels scary to have one defaulted whilst waiting for the others. Apologies if this is a silly question. Thanks in advance (also posted on another thread I realise might be too old) 

2021rdsunshine

It’s not a silly question at all! Different creditors might default at different times for sure. Some are quicker to default than others. This works better if you self manage your DMP because you can treat each debt individually. You can start paying the defaulted ones if you wish. If you go with stepchange they will insist in including all the debts, defaulted or not.