DMP, IVA, DCA??? HELP!

bootneckshuffle

Hi everyone,

Been lurking around on these forums and posts and trying to get an idea of who is in similar position to myself.

Little bit about my situation:

50k worth of CC debts, across 6 cards
Shared ownership home with my wife and 2 kids (75% rent 25% mortgage)
Decent car on PCP with 40 months left to pay on that

I've looked at IVA inside and out but worried about the impact where the home is concerned and also the car. Looked at DMP through step change, would take 9 years to pay! Not really sure what else to do? Haven't been defaulted yet but missed 3-4 payments so surely thats around the corner? 

What would be stopping me from just keep on not paying, waiting for the CC companies to default me and they sell the debt on, then offering the DCA much lower lump sum? Does this happen through a DMP anyway if I went down that route with step change for example?

Any help/advice is greatly appreciated.

Thanks.

sourcrates

That can work very well yes, let the creditors go through their standard collection activity, then wait until the debts are sold, and take advantage of the fact they will have likely bought your debt for around 12p in the £, so can afford to settle for less than is owed.

Just one word of caution, it does depend on the purchasing company as to when and how much discount, if any, is offered.

PRA for example, will not go much over 10%, were as Lowell and Cabot, have been known to go a lot higher, each debt purchasing company have their own policy on this, but overall its a decent strategy.

bootneckshuffle

Thanks for the advice.

I'm all over the place at the moment, really don't know what to do!

I'm definitely steering away from an IVA, all I read is negativity about them and haven't really read any decent posts from people in similar circumstances who have thought they're a good idea or working out.

DMP seem to have a decent amount of positive vibes, very popular and I have already don't a SoA with Step Change. 

Do you think it's best not to speak to my creditors directly at this stage? Would that do more harm than good? Seems the general consensus is to allow the accounts to default and save the fund?

bootneckshuffle

Also, quick question again.

I have a joint account with my wife with Lloyds. 

I don't have any Lloyds cards included in the DMP.

The joint account has no OD and is used solely for household bills.

Does this need to be closed and/or my name removed?

Martico

Lloyds Banking Group also includes Halifax, MBNA, and Bank of Scotland. Others will advise better than I, but there's an outside risk they'd be linked

sourcrates

bootneckshuffle said:

Also, quick question again.

I have a joint account with my wife with Lloyds. 

I don't have any Lloyds cards included in the DMP.

The joint account has no OD and is used solely for household bills.

Does this need to be closed and/or my name removed?

There is an outside chance the bank could use the right of set off against this account, but as its a joint account, it makes the process more difficult, it depends on what the banks own terms and conditions allow it to do.

Best policy is to remove the threat of it happening altogether, as prevention is better than cure.

bootneckshuffle

Thanks again for the advice.

Feel loads better today, just based off the info on this website.

Course of action now is:

1. Wait for the accounts to be defaulted, whilst stashing away money for fund
2. Arrange payments thereafter (what I can afford reasonably, not what they suggest)
3. Get on with my life

If anyone has any other good advice or things worth knowing, then please add.

Grumpelstiltskin

The only advice is not to panic if you receive any communication you don't understand. We don't mind how many times you come on here with a query.

bootneckshuffle

Amazing and thanks.

Really felt so stressed of late, like many others, felt like I've failed somehow, then its a matter of realisation in the fact that I've had no control over the price of everyday living and the fact that the banks have all whacked up their interest rates etc.

Interestingly and with reference to the above, I have just chatted with step change about the joint account. They said that as long as there is no overdraft attached t the account that it should be "ok"

I explained that the JA is used solely for household bills DD, utilities, mortgage, etc and isn't linked to any of my debts but of course there's the whole MBNA being part of Lloyds banking group etc. Step Change advised to speak to Lloyds direct and ask them if they would activate the right to offset against the joint account! I'm not so sure that speaking to Lloyds is the right course of action and could potentially work against me if they know what's around the corner?

sourcrates

Its very easy to open a new account, with a different bank, not linked to your debts, then as I said above, you remove the threat entirely.......as your joint account is used for bills and mortgage payments, its likely to have a quite a large balance at times, tempting for the bank to take it, just like that.

RAS

If you really, really want to stay with Lloyds, Stepchange are right. But Lloyds attitude could change some time in the future.

However, it's safer to move. Just you can take a little more time sort it out. Perhaps get a new account for your salary, and set up a SO to pay into the joint account for a couple of months. Then set up a new joint account, redirect the required DDs and close the old account.