DMP for £60k worth of debt...ready to tackle this!

Superhoopza

bravo4_5 said:

ManyWays said:

bravo4_5 said:

enthusiasticsaver said:

Is it worth exploring whether that Novuna loan is unaffordable lending? 

Sourcrates answers your questions but yes that recently taken out consolidation loan is a concern. The rest of your plan sounds good. 

What would I actually get out of going down the unaffordable lending route? Isn't this usually done to get a refund on interest paid, in this case so far its 0.

How would I even word a letter for unaffordable lending and if I was to do this would this be on the basis of fighting my case for if they weren't playing ball with not accepting my reduced payments or threatening with court action?

I am not sure anyone answered this, but I may have missed it in the long thread.

If you win an affordability complaint against a current loan, interest is removed from the balance so you only repay the amount you borrowed. Otherwise you may find the defaulted debt is the amount you borrowed plus all the interest as per the conditions of the loan.

You could consider this against Nouna and Updraf and any credit cards if they increased your limit while you were only making minimum payments.

Making an affordability complaint has nothing to do with whether a lender accepts reduced payments. A lender wont decide not to accept reduced payments because you have made an affordability complaint. They are a good way of speeding up repayments. the DebtCamel website has a template. 

This is extremely helpful to know. As like you said interest is still racking up while I’m not paying and waiting for defaults. 

Is it worth doing this now before default stage and while the creditors are still chasing me?

Yes unfortunately on here when people offer advise I rarely see the argument that they will incur more interest building up on their debts for probably an average of 6 months. For some people DMP is the only solution but for those who are bordering on DMP or better money management, this needs to be mentioned more often.

Rob5342

Superhoopza said:

bravo4_5 said:

ManyWays said:

bravo4_5 said:

enthusiasticsaver said:

Is it worth exploring whether that Novuna loan is unaffordable lending? 

Sourcrates answers your questions but yes that recently taken out consolidation loan is a concern. The rest of your plan sounds good. 

What would I actually get out of going down the unaffordable lending route? Isn't this usually done to get a refund on interest paid, in this case so far its 0.

How would I even word a letter for unaffordable lending and if I was to do this would this be on the basis of fighting my case for if they weren't playing ball with not accepting my reduced payments or threatening with court action?

I am not sure anyone answered this, but I may have missed it in the long thread.

If you win an affordability complaint against a current loan, interest is removed from the balance so you only repay the amount you borrowed. Otherwise you may find the defaulted debt is the amount you borrowed plus all the interest as per the conditions of the loan.

You could consider this against Nouna and Updraf and any credit cards if they increased your limit while you were only making minimum payments.

Making an affordability complaint has nothing to do with whether a lender accepts reduced payments. A lender wont decide not to accept reduced payments because you have made an affordability complaint. They are a good way of speeding up repayments. the DebtCamel website has a template. 

This is extremely helpful to know. As like you said interest is still racking up while I’m not paying and waiting for defaults. 

Is it worth doing this now before default stage and while the creditors are still chasing me?

Yes unfortunately on here when people offer advise I rarely see the argument that they will incur more interest building up on their debts for probably an average of 6 months. For some people DMP is the only solution but for those who are bordering on DMP or better money management, this needs to be mentioned more often.

There will be extra interest and charges while you wait for defaults, but once defaulted the debt will likely be sold and later on you can settle it for a much reduced figure. In the long run the savings from the settlement should outweigh the extra interest. There is also the impact on your credit file yo consider. A default will drop off after 6 years but an arrangement to pay doesn't drop off until six years after the debt has been repaid. Not defaulting could easily mean that your credit report is harmed for twice as long and that you pay twice as much overall. 

bravo4_5

Hi,

So my first default has been issued with my Barclays CC.

The letter says it’s been passed to the Barclays recoveries team and I need to pay full outstanding balance (which I obviously know I can’t do). If I can’t pay in full then the recoveries team “may” pass the debt to a DCA. 

My question is, now the debt has defaulted do I get into contact with Barclays to make reduced payments or wait for it to be passed to a DCA?

Thank you

fatbelly

I know this isn't much of an answer but you could do either.

If your plan is to pay this off by instalments you could start now. 

If you're looking for settlement deals it may be better to wait

sourcrates

Barclays recoveries will likely demand a higher monthly payment than a DCA would.

Its the pecking order you see, as an example Barclays may ask for min £60 per month payment, Barclays recoveries slightly lower at £50 per month, were as a DCA would settle for whatever you can afford.

The thinking behind it is Barclays/Barclays Recoveries would want the debt settled within say 18 months, or two years, the DCA won`t be thinking that far ahead, as they operate differently.

Debt collectors will also be authorised to make certain settlement offers, or other incentives to clear the debt quicker.

bravo4_5

sourcrates said:

Barclays recoveries will likely demand a higher monthly payment than a DCA would.

Its the pecking order you see, as an example Barclays may ask for min £60 per month payment, Barclays recoveries slightly lower at £50 per month, were as a DCA would settle for whatever you can afford.

The thinking behind it is Barclays/Barclays Recoveries would want the debt settled within say 18 months, or two years, the DCA won`t be thinking that far ahead, as they operate differently.

Debt collectors will also be authorised to make certain settlement offers, or other incentives to clear the debt quicker.

Ok that’s fine. I’ll wait for it to get passed to a DCA and still give no response to letters and calls? 

As the debt is now at default stage, if I was to give no response could Barclays try to go down the CCJ route before even passing to a DCA?

Thanks 

Rob5342

In theory they could go for a CCJ, but in practice they nearly always just sell them on.

RAS

They are unlikely to but could go for a CCJ, but in order to do that, they have to send you a letter before action. If that happens, you may want to contact them and agree a monthly payment. 

They'd much rather get a regular payment than fund the cost and hassle of court action. 

That's when you SOA becomes important. A court would only require an affordable payment. You tell the creditor your total debt and the amount you can afford between them. They only get the proportion of your spare money justified by the proportion of your debt. And make sure you've allowed for emergencies.

bravo4_5

Just an update - Barclays have sold my debt to PRA Group and I have set up a £20p/m payment (for now) just to keep them satisfied.

I’m just waiting for all the other debts to default and get sold on now, once I’m in a position where all debts are defaulted and with DCA’s I’ll ramp up the total payments to what I’ve budgeted to be going towards my self managed DMP….in the meantime I’m still going to tuck away as much as I can into my emergency fund.

Hopefully the rest are as plain-sailing as Barclays have been.

Again, thank you to this community for all advice and knowledge.

freshstart2023

Maybe something else to consider…my Barclaycard debt was sold to PRA, I did a CCA request straight away last January and I am still waiting so still haven’t paid anything