Settling My DMP but worried as I took out additional debt without telling them

szia

Hi

I have recently received a large inheritance from my late father. I contacted Stepchange to pay off my DMP balance with a lump sum.

The sum has been paid, and showing in my payments, but my balance remains the same.

As this is a large-ish sum, they are asking for evidence of where the sums came from them, such as my father's will, and also the grant of probate, both of which I can provide.

However, they are also asking for full bank statements showing the inheritance payments, so they can check they they are legitimate (I guess money laundering checks, which is fine and understandable)

My problem is that due to quite severe mental health problems, my money management has been quite chaotic, and I took on extra debts which I did not declare to Stepchange. My bank statements thereforfere look a mess. I can send them my statements indicating which amounts came from the inheritance (this will be clear from the amounts  and that they came from the executors of my Dad's will)

I am just very worried about the consequences of me not having declared all my debts, i.e. taking on new debts during the DMP. I also stopped working without telling them due to the stress of my father's passing, but carried on paying my monthly installments based on what I previously declared as my salary.

I need to send the statements in full, so when they notice the large amounts of extra debt, could they take legal action against me? I am extremely anxious about this. As mentioned above, I have already sent them the full outstanding amount, but have yet to send over the probatre/will and the dreaded bank statements.

Middle_of_the_Road

I can understand your concerns about the additional debt, but I'm sure many others have been in similar circumstances. You have done your best under the circumstances, so please try not to let this passing situation affect your mental wellbeing.

You will no doubt get more responses and reassurance by posting a message in the section below-
Debt-free wannabe — MoneySavingExpert Forum

boingy

They are not going to take any action against you. You kept up with the agreed monthly instalments and now you are paying it off with legitimate funds. I'd just send over a copy of the will and probate and wait to see what they say. If they follow up and ask for statements then just send them. 

Rob5342

Have you offered the full amount? You'd be better off approaching the creditors directly and offering a reduced amount, and using what's left to clear some of your other debts. Stepchange don't need to be involved with the settlement at all. If Stepchange haven't paid them yet you could ask for your money back.

sourcrates

@szia

This is something stepchange should never have been a part of, ideally you would have settled each account yourself, for as little as possible, by sending full and final settlement offers to your creditors, and getting involved in a little bit of negotiation.

You appear to have embroiled yourself in their red tape for no good reason, and its also possible what you have misguidedly done in haste, will not settle all of your indebtedness.

They are quite likely to just distribute the money to your creditors with no negotiation whatsoever.

You have a very mis-informed view of how a debt charity operates, I honestly wish you had sought advice from this forum earlier, legal action isn't even remotely possible.

If its not too late, ask for the money to be returned, and do the job yourself.

fatbelly

While I agree with the above, I suspect Stepchange will sit on this for as long as they can.

I once got involved with a similar situation with CAP, and they only returned the money after I sent them a letter before action.

So this is your money and, without further delay or correspondence, you need to make it clear that they must pay your creditors or return the cash.

peb

I suspect they will still need the statements etc before returning the money for money laundering checks.   This doesn't mean you can't follow sourcrates advice and negotiate directly 

peb

I suspect they will still need the statements etc before returning the money for money laundering checks.   This doesn't mean you can't follow sourcrates advice and negotiate directly 

Rob5342

I'd cancel the DMP immediately and demand your money back. Their terms and conditions say any money not paid to creditors will be returned within 5 days of the agreement being cancelled.

I'm quite appalled by Stepchange actually. Acting like this means someone could spend their whole inheritance on their debts and still have some debts remaining when they could actually become debt free and still have at least 50% of their inheritance. My advice from now on will be to always manage a DMP yourself.