In a bit of debt and need some advice on whether a DMP or otherwise is the best way forward......

jimmy2024

Good Morning All,

Just joined the forum and picked up some great pieces of info and tips so far so thank you all for that.

I'm in a difficult position atm financially, have toyed with idea of a DMP or similar for quite a while and have this week used the Stepchange website to look at my budget etc.

I'm in £70k+ debt across loans, credit cards and overdrafts. Stepchange is showing that instead of paying over £2k monthly in payments, I could potentially get that down to a c£750 monthly payment. I have around 12 debts across 6 creditors.

I have a few questions:

1) Does anyone know the likelihood of this DMP or similar being accepted by creditors? If they don't accept, should I offer a bit more (which I could probably manage)?
2) I have never missed a payment on any of the debts but I've read here that I should definitely default before entering a DMP - is this correct? Or should I engage with creditors/Stepchange on a DMP before missing anyh payments? As I say, I am up to date and next payments aren't due until this time next month.
3) A lot of my debt has been down to gambling, for which I have sought help and have now completely stopped. Should I share this info with creditors/DMP? Would it help at all?
4) I expect my situation to change quite significantly with a promotion at work early next year - is it worth perhaps dealing with creditors personally and trying to find an agreeable payment plan without a Stepchange DMP? I have seen others mentioning letters to creditors to inform them of my situation, would this be the best approach and, if so, could anyone share a template?

The other thing I should add is that I've worked in financial services/banks for most of my career......I'm not currently working in FS but plan to return at some point, does anyone know how that may be affected with a DMP/defaults etc.?

I will of course seek advice elsewhere too but this forum looks like a great place to start so any help would be massively appreciated.

Many Thanks!
Jimmy 

Grumpelstiltskin

Firstly don't rush into anything before you are sure you are doing the right thing.

The advice is to stop payments and wait for defaults.

Don't contact your creditors and don't tell them how the debt occurred.

A DMP won't show on your credit report, defaults will but normally no problem for working in finance.

sourcrates

It`s a strange system we have here, but to get any help with problem debts, you must first default on payments, otherwise they think you can afford payments at current levels, even though you have to struggle to find the money.

If you go ahead and make payment arrangements without defaulting, your credit file will be marked with AP markers, these stay on file for 6 years after you finish paying off the debt, but a default will be gone 6 years from the date its registered, so much better for you to default.

DMP`s are never rejected, if a creditor does not like what your budget says you can afford, they just sell the debt to someone else, who will accept it.

Debts are sold all the time anyway, or assigned to different collectors, they rarely stay with the original creditor for long.

You are but an account number to your credit providers, the collection process is the same for all, engage or don`t engage, you get the same treatment whatever you do, unless you are a vulnerable person, in which case your accounts go to a specialist team.

jimmy2024

Thanks for the responses guys.

Is defaulting an inevitable consequence in a DMP? Will they inform me before the account defaults at 3-6 months?

Also, for accounts/loans which I have recently taken out and not paid much back yet......are these more like to chase a CCJ than the others in your experience?

I believe my financial situation will improve significantly by January of next year but obviously my debts are considerable. It feels strange to just ignore payments for the next 3-6 as I have never missed one but that appears to be the best option.  

BatCountry

From what I've read here, a default is not always a consequence of a DMP when using the likes of stepchange because they make payment arrangements before it gets to that stage. I wanted the defaults so I could get the negative info off my credit score as quickly as possible (see sourcrates post above re: AP markers). Stepchange also leave you with very little disposable income which makes it impossible to add to your emergency fund. 

You should get a notice of default in the post. They send a 14 day warning letter, then technically should default after that but not always.  Also, check your credit score. I find clear score are the one to update most regularly. 

I've been doing a self managed DMP since December and it's all been going pretty smoothly so far. 

CCJs I believe are unlikely as long as you keep a close eye on your post. If you receive the formal letter before action then that's when you need to contact the creditor/debt collectors and set up a payment plan. I don't think there's any real determining factor as to who goes for CCJs but by the sounds of it, you're a long way off that point. 

If you think you're circumstances will change then personally I'd go self managed as you can decide who and when to pay, rather than being dictated to by stepchange. 

I'd suggest you go through all of the DMP mutual support thread. It's a long read, took me a good few days to get through it but it's worth it. Everything you need to know is in there. 

Best advice I can give is to not stress yourself out. Yes letters and calls are worrying at first but you soon realise that they really don't have much power. After a couple of months it stops bothering you. If you arm yourself with the knowledge from this site then you really can't go wrong. Good luck!

jimmy2024

Hi All,

I've followed the advice of @sourcrates and others on this thread so far so thanks for that.

I am in arrears with all of my creditors but only one seems to have defaulted so far (Nationwide) and not yet been sold to a DCA (as far as I'm aware).

My RBS debt is quite considerable and my account has now been "passed" to The Zinc Group but no mention of a default. The amount they're asking for is not just the arrears but the whole amount so does this mean that the debt has been sold/my account defaulted? I'm wary of ignoring them for too long if this is the case. 

One other question I had was re a CCA request......is there a template I should use to ask for this? Also, I'm assuming there would be no point in asking the original lender for this, e.g. in my defaulted Nationwide account (opened 12 years ago), is there any point in delaying things by asking for the CCA here, or is it only with DCAs?

Many Thanks! 

RAS

With respect to your RBS account, demanding the repayment of the whole sum is usually the precursor for a default. Just don't assume they will issue it any time in the next six months. Check all three of your credit records until it is recorded.

ManyWays

One other question I had was re a CCA request......is there a template I should use to ask for this? Also, I'm assuming there would be no point in asking the original lender for this, e.g. in my defaulted Nationwide account (opened 12 years ago), is there any point in delaying things by asking for the CCA here, or is it only with DCAs?
Yes there is a template, here https://nationaldebtline.org/get-information/sample-letters/information-about-your-agreement-under-consumer-credit-act/
But there is little point in asking the original lender for this (unless the account is ancient, pre 2007), and not a debt collector who is collecting for the original lender, only a debt collector who has bought the debt. And it doesnt apply for overdrafts, only loans, cards and HP.

If you havent made any payments for 6 months, you could just get a StepChange DMP now which would be much less stress and make complaints to any lenders who havent defaulted your credit record after missing 6 payments and ask them to add a default.  

jimmy2024

Hi All......

Something else I wanted to ask.....2 of my debts have been passed on to debt collection agencies (though no default as yet - one of them has stated this will happen in June of this year if not resolved before then). 

They have both been in touch to say I can pay £x amount per month to avoid default.....if these amounts are actually more than my original contracted amount, will these still show as AP markers on my credit file? I could afford to pay them without any issue but I don't want to prolong the effect on my credit file, i.e. is the advice still to just default asap?

Thanks 

Grumpelstiltskin

Yes wait for the default to happen.