IVA or DMP

Floss

london1973 said:

1. Once a creditor defaults you say set up an SO and ‘pay a proportion of what you’ve allocated’…well what is that, whats it based on, if i have 9 creditors all for varying amounts is it a pro-rata amount from the total amount i can afford? Who decides? And who’s to say it will be accepted, it’s going to be pretty nominal to begin with. People are saying i am over-thinking this and it’s not complicated (which are both true i am sure!) but surely there has to be an element of individual negotiation with each creditor just to get the initial amount agreed, prior to handing it over to Payplan etc

It is a proportionate amount of the total you have available after paying your priority bills and your budgeted amounts for household costs. You tell them what is available and why you are paying £x.

So if you have £125 available, and Debt A is 20% of your debt, you pay them 20% x £125 = £25; Debt B is 5%, so they get £6.25

It is not negotiation, it is stating the amount you can pay. 

RAS

Creditors can't take any other legal action by law. It is only once they have defaulted the debt that they can "go to court."

And since they know you are already paying as much as you can afford, there's no point in spending money get a court order which might actually pay them less and won't pay more.

A CCJ is an occasional tactic if you've not paid anything in nearly 6 years because it prevents a debt becoming statute barred. But beyond that unlikely. And they are sure as heck not going to pay BR fees knowing they'll could very little back after the IP's been paid. They only regular there is HMRC.

By the way, once the default is issued, interest and fees are halted. And in a few years you'll start to get discounted offers.

sourcrates

You pay according to your budget, it doesn't have to be the budget you actually use, just the one you want them to see that backs up what you want to pay, which you can make available to anyone who wants to see it, again, you don`t negotiate with anyone, you just make regular payments regardless.

The idea is to remain in control of events, and manipulate outcomes to your benefit, not anyone else's.

You probably won`t be dealing with your original creditors, they will be faceless collection companies, who buy debts for pennies, so anything you pay will be a bonus to them.

Overthinking things is a common past time for some new to the game, it shouldn't be, it requires no more effort or thought than the press of a keypad to make payment.

All they care about is getting a regular monthly payment from you, that you can afford, keep everything within those parameters and you won`t go far wrong.

You must set the tone from the start, otherwise collection companies will walk all over you, its imperative to become street smart, and quickly.

london1973

sourcrates said:

You pay according to your budget, it doesn't have to be the budget you actually use, just the one you want them to see that backs up what you want to pay, which you can make available to anyone who wants to see it, again, you don`t negotiate with anyone, you just make regular payments regardless.

The idea is to remain in control of events, and manipulate outcomes to your benefit, not anyone else's.

You probably won`t be dealing with your original creditors, they will be faceless collection companies, who buy debts for pennies, so anything you pay will be a bonus to them.

Overthinking things is a common past time for some new to the game, it shouldn't be, it requires no more effort or thought than the press of a keypad to make payment.

All they care about is getting a regular monthly payment from you, that you can afford, keep everything within those parameters and you won`t go far wrong.

You must set the tone from the start, otherwise collection companies will walk all over you, it’s imperative to become street smart, and quickly.

Ok many thanks again

So….. wait for default, once this happens call the relevant body (most likely collection co) and say for example, ‘my budget allows 500 in total, but there are 8 other creditors who are due to default (or have done), your debt constitutes 20% of the total, so you are getting £100’…. 

london1973

RAS said:

Creditors can't take any other legal action by law. It is only once they have defaulted the debt that they can "go to court."

And since they know you are already paying as much as you can afford, there's no point in spending money get a court order which might actually pay them less and won't pay more.

A CCJ is an occasional tactic if you've not paid anything in nearly 6 years because it prevents a debt becoming statute barred. But beyond that unlikely. And they are sure as heck not going to pay BR fees knowing they'll could very little back after the IP's been paid. They only regular there is HMRC.

By the way, once the default is issued, interest and fees are halted. And in a few years you'll start to get discounted offers.

By ‘discounted offers’ you mean the creditor/collection co offer you a deal to pay it back, not the other way around?

what ultimately happens if I’m paying say £20 a month for a 5k credit card debt (post default obviously), are they just going to accept that or do they routinely put pressure on you to pay more, by threatening other action etc?

 what would happen if you just simply did nothing, post default, i.e ignored everything..this is not my plan, i would much rather pay a nominal amount and have peace of mind, but interested to know

p.s thanks!

RAS

As has been explained, once defaulted, your debt may be kept by the creditor, perhaps assigned to a debt collector, or it may be sold on. You will be told if either of these happens.

Debt collectors and their ilk have varying approaches and varying relationships with the truth. Some are very good at stretching the latter.

Imagine being warned every time you were invited for a medical test that it might identify cancer? You will be warned repeatedly that failure to contact the debt collector or new owner of your debt will result in further action "which could include CCJ, bailiff visits or bankruptcy." Well legally, way down the line, in a minute set of circumstances, if you ignored all the legal correspondence you received, it just possible. What it really means is that their computer programme is currently programmed to send out a defined number of letters, automated calls and other comms. 

Tell them only to communicate in writing, and the number of letters might increase in the short-term. Keep paying regardless, maybe up the payment a bit when you pay another off, and the number will decrease. You could end up with an annual update.

And once the defaults are in you could hand over to Payplan or Stepchange. But when it comes to negotiating full and finals, you need to be back in harness.

Once the debt is sold, and after a couple of years, you might be offered a 25% discount to get a full and final settlement. You ask for 60%. And ignore them if they don't budge. You know they've paid 10p in the £1 or thereabouts, so 40% would make them a nice profit.

At that stage, do come back here. People here have observed that some DCAs are much harder to negotiate with and offer smaller discounts, but by the time you want to make offers, the details will almost certainly have changed. If you don't get what you want, you might hang on in there until that DCA sells your debt on to someone more amenable, they might decide that lower deal is worth it.

Regardless, 6 years after the default, your credit record looks OK.

tigergambit

@london1973

I know it goes against what you believe and everything you've been told to believe but this IS how it works - took me an age before the penny dropped.

1. Once a creditor defaults you say set up an SO and ‘pay a proportion of what you’ve allocated’…well what is that, whats it based on, if i have 9 creditors all for varying amounts is it a pro-rata amount from the total amount i can afford? Yes, Exactly that.

Who decides? YOU decide.

And who’s to say it will be accepted, it’s going to be pretty nominal to begin with. It will be accepted.

People are saying i am over-thinking this and it’s not complicated (which are both true i am sure!) but surely there has to be an element of individual negotiation with each creditor just to get the initial amount agreed, prior to handing it over to Payplan etc. No, there really doesn't. OK, overthink it like this: You are one of thousands these people are dealing with - sorry, but you're not important, just a number to them - Do they have time to individually negotiate with everyone or are they happy to take the free (comparatively - they probably only paid 10 - 15%) easy money and move on? What would you do?

2. This also assumes all creditors will amble towards defaulting, is that right, YES

i mean they won’t try other options like the courts, BR etc, Not unless you ignore them for a very very long time

i do see that looks unlikely- i think what we are saying is that they will first default and THEN consider other options if you continue not to pay, hence the need to start making some sort of contribution once defaulted? YES!

And above all THIS:

sourcrates said:

You pay according to your budget, it doesn't have to be the budget you actually use, just the one you want them to see that backs up what you want to pay, which you can make available to anyone who wants to see it, again, you don`t negotiate with anyone, you just make regular payments regardless.

london1973

tigergambit said:

@london1973

I know it goes against what you believe and everything you've been told to believe but this IS how it works - took me an age before the penny dropped.

1. Once a creditor defaults you say set up an SO and ‘pay a proportion of what you’ve allocated’…well what is that, whats it based on, if i have 9 creditors all for varying amounts is it a pro-rata amount from the total amount i can afford? Yes, Exactly that.

Who decides? YOU decide.

And who’s to say it will be accepted, it’s going to be pretty nominal to begin with. It will be accepted.

People are saying i am over-thinking this and it’s not complicated (which are both true i am sure!) but surely there has to be an element of individual negotiation with each creditor just to get the initial amount agreed, prior to handing it over to Payplan etc. No, there really doesn't. OK, overthink it like this: You are one of thousands these people are dealing with - sorry, but you're not important, just a number to them - Do they have time to individually negotiate with everyone or are they happy to take the free (comparatively - they probably only paid 10 - 15%) easy money and move on? What would you do?

2. This also assumes all creditors will amble towards defaulting, is that right, YES

i mean they won’t try other options like the courts, BR etc, Not unless you ignore them for a very very long time

i do see that looks unlikely- i think what we are saying is that they will first default and THEN consider other options if you continue not to pay, hence the need to start making some sort of contribution once defaulted? YES!

And above all THIS:

sourcrates said:

You pay according to your budget, it doesn't have to be the budget you actually use, just the one you want them to see that backs up what you want to pay, which you can make available to anyone who wants to see it, again, you don`t negotiate with anyone, you just make regular payments regardless.

AMAZING THANKS

tigergambit

@london1973

I forgot to say that if you do a SoA/budget with National Debtline they don't require proof of earnings like Stepchange/Payplan. I'm not suggesting that you should make an error in your declaration, more that you can get a verified SoA quickly  which is more formal than one you have done yourself, particularly if you self-manage.

london1973

Not sure if anyone is still looking here or it should be a new thread

i want to get going with the emergency fund..assume this is suggested via a separate savings account, can anyone recommend a good one. Given my overdraft at HSBC is now maxed out and part of the problem I’ll need a new account, but not sure my credit rating is going to grant me one? I use Revolut for day to day stuff..

any suggestions would be great
thanks