Default all?

kittencuties

Hi all

I am in need for some amazing advice.

I have accumulated quite a bit of debt during my 20s (end of 20s now and making better financial decisions). 

This resulted in massive amounts going out in direct debits every month for mainly things that are on credit or credit cards. 

I have a car, insurance, house rent and basic food and train ticket, fuel etc expenses. 

I have defaulted on 2 credits both with Monzo one is a loan and one is an overdraft. 

I am thinking to stop most direct debits that are towards credits and instead of paying so much interests, let them all to default but start paying them off in bigger chunks and agree on full settlements with some, 

I could have access to about £700 after paying the priority bills and food shop and fuel etc. 

I already have 2 defaults on my file for 6 years. I don’t want any of the IVA, DRO, DMP etc so am I not better off letting most of these default and start paying bigger chunks each months slowly? I could split the 700 and put it towards 2 things or just keep putting 700 towards the small bits to the large amounts so in the end of the default period everything should be paid off? 

Thank you for the advice 

stu12345_2

your post is a little scrambled and confusing. is it that you plan to not pay anything till everything defaults, be that 6 months or even 18;months down the line and let the interest still accrue.

then start a repayment plan with them, knowing that at that point all the money you give is going to clear the balance as interest is no longer added.

that is still a dmp, run by yourself 

Brie

Good to see you're starting to get things sorted.  That's always the first big step.

You say you don't want an IVA, DRO or DMP which is fine but what it sounds like is that you want to set up your own DMP.  Which is fine.  Takes some discipline but so do lots of things.  

So you can do this all yourself or you could go through one of the debt advice agencies - NationalDebtline, StepChange, CMA (Community Money Advice).  The reason you might go through them is they will be recognised by any of your creditors and they may as a result take your situation a bit more sensibly.  They will require you to provide information which will populate something like the Statement of Accounts that is on one of the top stickies in this forum.  And then they will send that out with offers to pay X per month to each.  Normally these will be pro rata amounts so if you owe Monzo £5k and Barclaycard (or whomever) £1k the amount offered for Monzo would be 5 times that for Barclaycard.  

Whether this will work for you or not depends both on you and what your actual debts are.  It may make sense to default on everything and then after a few months ask for a full and final settlement figure and see what you get back.  Meantime you'll be saving up your £700 excess a month ready to stomp on one or more of the bills.  

Best of luck with it!!

fatbelly

I believe you have just had some amazing advice. Post again if you need anything explaining.

kittencuties

Thank you all.

How does the default works? Do I just cancel my direct debits and tell them I can’t pay right now? 

How many months after non payment would they mark it as default is it 6 months? 

Also, would 2 defaults versus 8 defaults class exactly the same on my credit file? I guess it doesn’t matter if it’s 2 or 8 as either way it will stay on my report for 6 years and probably don’t do more harm than how much the 2 default has already done. 

In the mean time I can put the £550 (recalculated it and i only have about £5-£550 left) on a separate account and agree settlements one by one with the creditors once all has defaulted? 

stu12345_2

when you say settle creditors , do you mean pay full balance after they defaulted, cos you could be waiting years for any sort of discount.

and I've had defaults between 3 months and 18 months, and one of them is still refusing to default 2.5 years later.
 

Discounted2024

stu12345_2 said:

when you say settle creditors , do you mean pay full balance after they defaulted, cos you could be waiting years for any sort of discount.

and I've had defaults between 3 months and 18 months, and one of them is still refusing to default 2.5 years later.
 

What are you currently doing with the 2.5 years one?

stu12345_2

interest did stop ages ago, making small payments when I choose to it.

kittencuties

Thank you all.

I guess even if I wait for years the 6 years default marker will be ticking either way. I also wanted to understand that once a credit registered a default against my credit, as long as I communicate with them and try and agree a settlement they wouldn’t be taking me to court or so right? 

I don’t mind the defaults since I already have the 2 but wouldn’t want any CCJ or anything like that. 

Grumpelstiltskin

It is rare for companies to apply for a CCJ on normal consumer debt. 

After a default ignore texts and E Mails but open any letters you receive by snail mail.

The default will drop off after 6 years whether you have paid or not.

stu12345_2

yes, before a default, interest may keep being added,but at defaults,it's account terminated, interest stopped.

then you can communicate with them, offer them something, see what they say, they ask for your income and expenses, but I keep refusing, I just set up a standing order monthly.

it's a big game, they want it all back, but you are trying , like me to avoid that.
your thinking maybe a can get a discount full and final settlement at some point. I've been offered discounts, some want a financial statement, that's where it becomes awkward, you then have to adapt your statement to show you are skint, whilst you save up for a good discount.

I'm doing that, and I state the funds are from a third party.
the game is to play with creditors to your advantage as long as possible. if you get a letter before action, then maybe you have saved enough to clear account, or maybe offer a discount full and final, maybe offer a repayment plan slightly increased.
good luck with the game I say.