DMP serious stress and worry

annabelacbella

Hello, we are about 3 months into a DMP, and to begin with it was a huge relief to be paying what we can afford each month, and so on.  But now we are getting serious threats from our creditors and we are both in a seriously stressed and anxious place.  We both feel sick, constantly showing our stress to our young children, and so so scared about what might happen.  We are paying £1000 to payplan each month, but our creditors say they haven't actually agreed to Payplan's terms (despite letting them pay a fair amount each month), so they are sending letters saying we need to pay them in full, and so on.  We are completely terrified.    Before the DMP, we were paying all monthly payments, but we took out the policy because we had so much debt and we were only just paying the interest.  We both earn a good income (touch wood) and this is a very strange place to be in, having always paid previously.  

MFWannabe

@sourcrates This needs to go on debt free wannabe board

fatbelly

Please note you are not getting serious threats. You are getting routine standard letters ahead of defaults. These are issued after 3-6 months in arrears, and take you out of your contractual terms and conditions.

These are non-priority debts. They will accept what you are offering because they have no sensible alternative. A court would order you to pay from your surplus income, which you are doing.

Op has started another thread on dfw but being encouraged to come back to this one to chart progress

sourcrates

OP has two identical threads running, the other can be found here -

Severe DMP anxiety — MoneySavingExpert Forum

I`m closing the other one to avoid duplicate advice.

EssexHebridean

Copying my post to the OP over to this thread as well to keep everything in one place. 

Hello OP - I'm sorry to hear you're struggling so much with this, it is a big thing to take the decision to do, and it definitely sounds like it is the right thig for you, so please be assured that you have made the right decision and in time you will look back at this with the benefit of more knowledge and a lot of hindsight and realise that it wasn't as scary as you perceived it to be at the time. It's easy for us to forget here sometimes that we see posts like yours regularly, and indeed we take people through the steps of what is involved in a DMP on pretty much a daily basis, and so all the "stuff" around DMPs is "stuff" we know - for you, it's all new to you though and let's face it, we've all been beginners at everything in the past! 

You've had some good points made above [on the other thread] - but perhaps the most notable to address is how the process has worked for you to this point. Allowing that you went straight to PayPlan by the sound of it, it's unlikely that they will have advised you in the same way that we would have done, for a start. Did you go from struggling to make monthly payments straight into the DMP? That is the way the charities usually direct people. We take a slightly different approach, and recommend that people who are struggling stop paying unsecured debt entirely for a few months - and use that time to get a solid household budget in place, and save any surplus income towards first an emergency fund, and second a "fighting fund" which can then enable Full & Final settlement offers along the line. It also has the advantage of giving the debts time to default - meaning that the interest stops. Once the debts have defaulted, then it's the time to start making the payment as per the DMP. 

The letters you are receiving - try to put them into a bit of context in your head for a start. They're pretty much entirely going to be computer generated automatic letters - nothing personal, and in fact I suspect if you dissect them a bit, they're also not really threatening anything specific - more a lot of hot air around "we may do this, and we may do that"... Ultimately, there really IS very little that they are likely to do, so try not to worry overmuch on that one. 

I can see you started another thread over on diaries - why not consider making use of that to actually chart your progress? Others will almost certainly chime in with their own experiences and suggestions around what is happening as well - it's a great way of not feeling like you are the only folk in the world in this situation! 

sourcrates

Grumpelstiltskin Posts: 4,107 

 Forumite

Today at 8:18AM

You have received good advice on your other thread.

DMP serious stress and worry — MoneySavingExpert Forum

You don't appear to be clued up about what happens when you don't pay your debts in full, and my guess is you have panicked and gone into a DMP too soon without letting the debts default and saving a good emergency fund.

Despite what your creditors say nothing terrible is going to happen. no bailiffs knocking on your door, just a load of empty threats.

You need to understand fully what the situation is and maybe postpone your DMP until you do understand the best way forward.

sourcrates

RAS Posts: 32,409 

 Forumite

Today at 8:38AM

Options

Sorry you don't seem to have been prepared properly for the realities of a DMP before starting one with Payplan.

Debt collection always involves repeated attempts by the creditor to contact to get payments recommenced. Nearly all of this is computer generated as part of an automated programme. You can tell them to limit contact to hard copy letter, which helps.

By law the creditors have to warn you that if you don't pay the whole sum become payable. In some ways it's a good thing as it can be a precursor for issuing the defaults.

What also concerns me is that you seem to have rushed into the DMP without preparing.
As a starting point do you have a decent emergency fund?
Do you understand that a DMP doesn't require the approval of your creditors, it's a voluntary arrangement, it's your plan, it just happens and you decide what you can afford. The only debt management that requires creditor approval is an IVA.

I would ask Payplan why your creditors haven't received money, but otherwise relax.

Open the letters once a week, and file. Come back if you get a letter before action.

sourcrates

enthusiasticsaver Posts: 15,193 

 Ambassador

Today at 8:59AM

Options

Have the debts defaulted? 

Did you arrange an affordable repayment with payplan? 

Have you got emergency savings?

If all those have happened then you are on track. Unsecured creditors rarely initiate further action but there is a process they have to go through. 

I know it is difficult but the letters will reduce and hopefully the debts will be sold on and then you will hear very little from them. If payplan is not paying them then get payplan to deal with them. 

sourcrates

tigergambit Posts: 56  

 Forumite

Today at 12:17PM

annabelacbella said:

Hello, we are about 3 months into a DMP, and to begin with it was a huge relief to be paying what we can afford each month, and so on.  But now we are getting serious threats from our creditors and we are both in a seriously stressed and anxious place.  We both feel sick, constantly showing our stress to our young children, and so so scared about what might happen.  We are paying £1000 to payplan each month, but our creditors say they haven't actually agreed to Payplan's terms (despite letting them pay a fair amount each month), so they are sending letters saying we need to pay them in full, and so on.  We are completely terrified.    Before the DMP, we were paying all monthly payments, but we took out the policy because we had so much debt and we were only just paying the interest.  We both earn a good income (touch wood) and this is a very strange place to be in, having always paid previously.  

@annabelacbella

Hey, well done for recognising the problem and getting onto a DMP. Please be assured that this is the first step in resolving your debt problems.

I also panicked and went into a DMP with PayPlan without waiting for defaults. This is probably a mistake but on the other hand it does stop interest and charges immediately so I shouldn't worry too much. What you may have done, however, is underestimate your expenditure to PP. Well worthwhile putting up your SoA on here for those with more experience to look at. I know that when I started I was desperate to be seen to be making an effort to repay and underestimated what we really require to live a reasonable life on. The good news is that you can go back to PayPlan and alter this. Remember to build in sufficient slack to allow you to build an emergency/fighting fund. In the meantime if you run short tell PP and take a month off repaying.

With regard to the letters you can ignore them. The threats are NOT serious - they are unpleasant and designed to scare (which they do initially) but are empty. You WANT creditors to progress along the path to default so in a way they are a good thing. If you are in a payment plan this may happen more slowly but it will still happen. Nothing bad can be done until defaults occur and even then if you are continuing to pay nothing will happen. I would be inclined to respond by telling them that PayPlan are dealing with the debt and they need to speak to them - that does reduce their activity.

You're in a nasty situation financially but you have taken the right steps and things will improve (quite quickly!) . Make the decision to let it run for 12 months (subject to reviewing your SoA) and then revisit. There's really nothing more to do then other than reading these boards and preparing for the next stage.

Rob5342

It sounds like you have jumped the gun a bit with the DMP, you should have stopped paying and waited for them to default before starting the DMP. If they haven't defaulted yet I'd stop paying until they do and save the money.

annabelacbella

Thanks all.  Yes, I think we did jump the gun, in hindsight.  I didn't realise that we could do what you say below, I thought it would be seen in a more positive light if we went straight into it so there was no break in payments, but yes, as a result, we don't have any emergency fund and that is probably what is most scary.    Maybe I should speak to Payplan to do something about this.   Wish they had suggested that as an option... and I wish I had found this board first.