DMP final thoughts, has it really come to this.

KryptonMoose

Hi all,

Firstly I'd like to thank all you for the support and information in this forum. When I thought I had no way out of this I found this place and has started to shed some light on some really dark times.

I'm currently In a total of £31,184 of debt split as follows;

Tesco loan £10,888

JN bank loan £6914

Barclays Credit card £6491

MBNA £6889

I've never missed a payment In my life and all are currently on 0% offers. For the better part of some years i have had to use debt to pay for my every day expenses and use debt to pay off other debt and its finally caught up to me. From next month I can't afford all my minimum payments, I'm embarrassed and feel a total failure and don't know what else to do.

After reading it appears defaulting and doing a dmp is my best option however I have a few questions if I could get your help in answering.

What is the specific letter I'll be looking for before I contact anyone to arrange payment?

What is the likely hood of court action ie bailiffs knocking on my door?

Do I wait for all 4 to default before contacting any of them? If so why? And what happens if 1 defaults alot earlier team the others, do I continue to ignore them until the others have defaulted?

And finally is a DMP set up with each individual one? Or something I need to do to bring them all into a singular DMP?

Thank you to any that provide advice. I can't quite believe I'm at this point. It feels like rock bottom.

Grumpelstiltskin

OK I won't answer your questions but I will refer you to this thread.
In Debt and Wannabe Debt Free? First Steps! — MoneySavingExpert Forum

Read through it carefully.

Next step is to stop all debt repayments, nothing terrible is going to happen if you don't pay them for many months.

Don't be tempted to contact your creditors at this stage, save as much as you can into your emergency fund and get a basic current account with a bank that isn't connected with any of your debts.

Bailiffs, they don't just come knocking at your door, you have to have had a CCJ awarded against you, then ignore it and pay nothing, then if this did happen ( highly unlikely ) you would just have to keep them outside, they can't force entry.

Hang on to any letters you receive through the post but don't answer phone calls and ignore E Mails and text messages.

If you complete a SOA and post it on here then we can start to give you the best advice tailored to your circumstances.

RAS

Court action is possible legally but unlikely. Creditors can't do it until the debt is defaulted. Once that happens interest and fees stop being applied. The debt will probably be sold on and you just pay the creditor, or those who bought it, a reduced affordable sum. Since going to court costs money and court would tell you to make an affordable payment, expending the unnecessary dosh doesn't often figure.

Meantime if your salary goes into an account associated with a banking group to whom you owe money, it is essential that you open a new basic bank account and get your salary paid in there. Do not switch as that also moves payments to your creditors.  Then set up your housing, CT, utility and media accounts as previously. Budget carefully and start the month by paying money into an emergency fund, until the defaults come in.

ET22

Hi, i am in the same situation. I let one default, ignored the reminder letters and it was passed to a debt collection agency who asked for income and expenditure commitments over the phone. Im now in a position where I need to let a second card default when i shouldve done both at the same time really. All they can do is phone or email. just dont pay t until they pass it to a debt collection agency. Once you make an arrangement to pay a small amount each month, a few months later they will contact you with a settlement figure.Im actually contacting the debt collecting agency for the initial card I let default and telling them of a change of circumstances meaning I am offering something but not as much as I currently am. 

The same thing happened to me about 25 years ago. Thousands of people default all the time, dont stress about it. Its certainly not cause for a sleepless night or to feel like failure.If anything its a new beginning where the debt becomes very manageable and you can start planning ahead by budgeting.You havent failed, youve come on here to start anew :-). You've got it the wrong way round, Its not a failed journey, its a new beginning.

Stay on these boards and you will get lots of advice around budgeting x     

ET22

BTW, I owe 7000 to Virgin and 2500 to MBNA. Im not worried. I currently pay a debt collection agency 65 quid a month for Virgin which i agreed to because I didnt tell them all of my outgoings. So now im gonna ring them and tell them my outgoings have gone up so that i'll pay a lot less than 65 quid.  

But if you feel you need help so that you only pay what you can afford,  and you feel like its a ball and chain, which it really isnt, but are worried contact Stepchange who will help you to make a plan while they are defaulting

Its easy to sort out x :  


 

DisabledDan

KryptonMoose said:

Hi all,

Firstly I'd like to thank all you for the support and information in this forum. When I thought I had no way out of this I found this place and has started to shed some light on some really dark times.

I'm currently In a total of £31,184 of debt split as follows;

Tesco loan £10,888

JN bank loan £6914

Barclays Credit card £6491

MBNA £6889

I've never missed a payment In my life and all are currently on 0% offers. For the better part of some years i have had to use debt to pay for my every day expenses and use debt to pay off other debt and its finally caught up to me. From next month I can't afford all my minimum payments, I'm embarrassed and feel a total failure and don't know what else to do.

After reading it appears defaulting and doing a dmp is my best option however I have a few questions if I could get your help in answering.

What is the specific letter I'll be looking for before I contact anyone to arrange payment?

What is the likely hood of court action ie bailiffs knocking on my door?

Do I wait for all 4 to default before contacting any of them? If so why? And what happens if 1 defaults alot earlier team the others, do I continue to ignore them until the others have defaulted?

And finally is a DMP set up with each individual one? Or something I need to do to bring them all into a singular DMP?

Thank you to any that provide advice. I can't quite believe I'm at this point. It feels like rock bottom.

I have owed nearly three times what you owe, I did not even get a DMP, I just stopped paying and took the nuclear option.  Some of my debt was not consumer debt where they got a CCJ that was escalated to High Court, I did not pay a penny to any of them once I decided to default.

When you stop paying, at first it will be a load of texts, emails and letters informing you that you missed the payment.

Before you start I would get an MSE £2 lebara sim deal and and a new email and update your details with each creditor, leave it for 3 months and then make a GDPR request for your creditor to only contact you via Royal Mail.  They will still hold your number but it will be the new number.  At same time you do not answer called from withheld caller ID or from numbers not in your phone bool and not from any creditors.  Also lock down your social media, do not share with anyone, if they see you sharing your holiday snaps or your new car they will be encouraged to play hard.

More of the same attempts to engage and scare you follows for 3 to 6 months, then you should be sent an official looking letter that tells you under XYZ act they are defaulting the debt.

What you are looking for is that the debt has been assigned (sold) to a debt company,  some of these companies are also plain old debt collectors.  So there may be a stage before the debt is defaulted where they send the account to the collections dept within the original lends, then maybe a 3rd party like Westcot or Moorcroft.  

The likelihood of Court action depends on the type of lender, I have had debt with three of your lenders but two of them are the same as Tesco Bank is being sold Barclays

https://www.moneysavingexpert.com/news/2024/02/tesco-bank-sold-to-barclays/

In my experience all of your lenders will sell off the debt, but to different companies, I suspect they auction off a bundle of bad debt. One of my creditors accidentally included a document that showed mine was one of 2000 accounts being packaged.

You may not going all the way, you seem to only going as far as it takes to get a DMP with a discount.  I suspect you have assets or care about your credit record, while I did not, I had nothing to lose and treated them all with contempt, as far as I know, only one company got a CCJ and it was not one of your lenders.

You debt is probably sold for between 5p and 12p in the pound, they did not lend you actual money, they invented it under fractional reserve system so that they could charge you interest.  For the lender they want their books to look squeaky clean with low percentage of bad debt, or debt in limbo, so if they think you will not be paying they sell it off and it all looks good.

The new owner of your debt will start by saying your debt has been assigned to them and they have appointed one XYZ Debt Collectors to collect it on their behalf, they will send you a series of template letters.  Throughout this you must realise you have nothing to worry about.

They start with a "you must contact us to set up an arrangement blah blah blah", then a "we wrote to you", then a "we can give you a discount" without saying how much.  These are all letters with a goal of getting you to contact them, nothing more, don't engage yet.  After a few months of looping the same letters they come with a specific discount of around 20%, then comes a loop back  without mentioning the discount to try to create a FOMO. Eventually they will offer 60%, if you ignore than they may send an "it's not too late" letter.  Then a new debt collector is appointed and the cycle starts again, there is not guarantee that the first debt collector will offer 60%, I don't think Westcot or Moorcroft ever did but others did.

The decision to go for a CCJ is always going to be based on whether they can determine from your Cred Ref DB record whether you have something to lose or can afford something to pay.  For example my bank was reducing my overdraft and I asked for time to clear the difference between perhaps £2k and the £1250 they proposed, they agreed but did a credit record check.  One of my creditors saw that search and  clearly thought that the bank knew something they didn't and went for a CCJ.  They did not see the bigger picture was that all the rats were leaving the sinking ship and this was a managed debt reduction. They will have paid for alerts so they see every change on your credit record.  It can work in the other direction; if they see the default by another creditor they it may speed up the pace of the 60% offer letter

The thing is what I sense from you is fear and they will exploit that, you ask about doorstep visits, I never had one but I would not open the door and always have a "do not engage" policy.  You need to have a do not care approach, to be honest you really want a never again approach to debt, not just to get a discount so you can get more debt later.

With your goal of a DMP you should only care when you get a letter before action as you seem to want to avoid a CCJ.  I seriously doubt anyone will want to get a CCJ at this time because they want to get as long as they can to chase the debt.  If they get the CCJ at 5 years 6 months they effectively have 12 years, but if they got the CCJ in first year they would only have 6 years.  Their logic is that your life improves and you can afford to pay the debt.

If you are going for a DMP and only seeking a discount then you will have resolved this way before.  Don't get me wrong they will mention legal action, but until you get a letter before action you ignore them. Even then I had letters before action that never happened,  I had a warrant of control that had no Court stamp, it looked bona fide, it even had the fees, but then that debt solicitor firm was replaced by another, those fees and the total amount all reverted to previous balance.

Regarding the DMP, I think the charities take a fee but they do reduce stress, an alternative is to wait until you get a 60% offer by the debt collectors appointed after the debt is sold. There will be a lot of letters to ignore before that point.

If you want a diary of events then the thread below shows it quite well.


https://forums.moneysavingexpert.com/discussion/6510529/debt-has-finally-caught-up-with-me/p1

KryptonMoose

Thank you all for your advice and feedback, understanding the journey ahead is really helping. I think it's what I need to do and will prepare accordingly

Rob5342

DisabledDan said:

KryptonMoose said:

Hi all,

Firstly I'd like to thank all you for the support and information in this forum. When I thought I had no way out of this I found this place and has started to shed some light on some really dark times.

I'm currently In a total of £31,184 of debt split as follows;

Tesco loan £10,888

JN bank loan £6914

Barclays Credit card £6491

MBNA £6889

I've never missed a payment In my life and all are currently on 0% offers. For the better part of some years i have had to use debt to pay for my every day expenses and use debt to pay off other debt and its finally caught up to me. From next month I can't afford all my minimum payments, I'm embarrassed and feel a total failure and don't know what else to do.

After reading it appears defaulting and doing a dmp is my best option however I have a few questions if I could get your help in answering.

What is the specific letter I'll be looking for before I contact anyone to arrange payment?

What is the likely hood of court action ie bailiffs knocking on my door?

Do I wait for all 4 to default before contacting any of them? If so why? And what happens if 1 defaults alot earlier team the others, do I continue to ignore them until the others have defaulted?

And finally is a DMP set up with each individual one? Or something I need to do to bring them all into a singular DMP?

Thank you to any that provide advice. I can't quite believe I'm at this point. It feels like rock bottom.

Regarding the DMP, I think the charities take a fee but they do reduce stress, an alternative is to wait until you get a 60% offer by the debt collectors appointed after the debt is sold.

You should never pay a fee for a DMP, Stepchange and Payplan don't charge any fees. They csn do some of the work for you, but they work in the creditors best interests rather than yours. They work to get as much back to the creditors as possible even though that could cost you double what it needs to, and could harm n your credit record for twice as long as it could have done. They csn be useful for some things but don't start a dmp with them until your debts have defaulted.