DMP - Default query

gerrard88

hi all

So i have 5 credit card. Totaling 30k debt

i stopped paying the payments 4-5 monts ago. Only a few have sent me risk of detault lettets

i am going to do a DMP with stepchange but do i wait until all are default? Or do it now?

also with a joint mortgage and we renew 2026. Will this be affected?

car finance renews 2026 too

any advice  and what do would be much appreciated. Maybe from previous experience similar situation too

thanks again

2021rdsunshine

gerrard88 said:

hi all

So i have 5 credit card. Totaling 30k debt

i stopped paying the payments 4-5 monts ago. Only a few have sent me risk of detault lettets

i am going to do a DMP with stepchange but do i wait until all are default? Or do it now?

also with a joint mortgage and we renew 2026. Will this be affected?

car finance renews 2026 too

any advice  and what do would be much appreciated. Maybe from previous experience similar situation too

thanks again

Hi! If you’re going through with Stepchange they will insist in including all your debts, defaulted or not. Creditors can take quite a few months until they really default you . Mine have taken 8 months and one of my creditors has still not defaulted. If you decide to do a self managed DMP you can treat each creditor individually and start paying them as they default if you want. That’s what I’m doing anyway. The creditor that has not defaulted me is still being ignored until they do. 

Regarding your mortgage people with more knowledge will come along to advise you but according to what I read before from other posters, that’s not a problem if you renew with the same mortgage lender. 

As far the car is concerned I’ve no idea but I’m sure someone will advise you soon 

gerrard88

Thank you for this really helpful

If i did self DMP when do I contact the bank? Once letter says its default?

how much do you think they will let me do paying back? Would only really like to do £200 per month for all my cards if possible

2021rdsunshine

If you self manage, you are in control. You don’t contact them. They will write to you. After you see the defaults applied on your credit file you wait and they will contact you. They might even sell the debt straightaway or assign a debt collector to deal with it. Either way they will write to you and tell you. You can then start paying them if you wish . Their letters will have information of ways to pay them. They will push for you to provide an income and expenditure form but I’ve done none of that. I’ll just pay what I decided to pay through a standing order from my bank. Like I said, you are in control of what to pay and when. The important is that you pay your secured debts and all your bills on time. Also important is to have an emergency fund on the side for when your fridge or washing machine decides to break. Remember you won’t be relying on your credit cards to replace them. 

I have a similar amount of debts as yours and I’m paying less than £200 between them. My goal is for them to offer me offers for a settlement of the debt further down the line. If I was to pay more than what I’m paying that would never happen 

funny_bunny

You can seek advice from stepchange but I wouldn't bother doing a DMP with them. 

I saw what their rookies did to one of my acquaintances.

One SC adviser added HP into DMP, my acquaintance didn't know about it until she was contacted by her HP lender for missing payments, another SC adviser added her son's DLA as an income and calculated her monthly repayment so high leaving her struggling to keep the heating on during winter.

All letter templates are available on national debtline or netcab's website if you decide to go self-manage dmp; they are like running your own show. You tell them how much you can afford to pay.

For mortage, you should seek advice from others but HP should be excluded from DMPs.

Rob5342

It's much better in the long term to wait for them to default first. They will drop off your credit report 6 years after the default date, but if you start paying before they default you will get an arrangement to pay msrker which drops off your credit report 6 years after the debt has been repaid. Also if you default then the debt is more likely to be sold to a dcs who is muxh more likely yo accept a reduced settlement offer so you could clear the debt much more quickly.

If you stay with the same mortgage lender then you can usually move to a new deal without a credit check. I have four defaults and I switched to a new fixed rate with Santander with no problem at all, it just took two minutes on their website to choose one.

I'd suggest managing it yourself rsther than using Stepchange. Stepchange seem helpful but their actual aim is to recover as much money as possible for the creditor even though tjwt makee things mich worse for you. There was someone om here recently who had received an inheritance and Stepchange had advised them to pay the whole lot to their creditors. If they had made settlement offers to yhe creditors yhey could have cleared their debts snd still have half of their inheritance left. 

sourcrates

Any form of HP is a priority debt, as its usually secured on the vehicle, when it comes to changing that vehicle, a new HP agreement may not be possible due to defaults on your credit file from your self managed DMP.

So either that car has to last you longer, or you save up to buy a cheaper car from your emergency fund.

Mortgage renewal with your existing lender does not usually require a new credit check, if you went with a different lender it would be required, and you may have to accept sub prime borrowing instead.

These are all events you should plan for prior to entering debt management, pre-planning is essential especially when you are a homeowner and you need a car.

gerrard88

Great advice thank you so much

none are default on my credit report yet. So will wait all to happen

i willl look at what to do with my pcp on my car. 

Just worried if 1 defaults and others wait. Should I just contact the creditor that defaulted and sort a payment plan out?

sourcrates

gerrard88 said:

Just worried if 1 defaults and others wait. Should I just contact the creditor that defaulted and sort a payment plan out?

Well yes you can, but the collection process is quite long and tedious, lenders go through there standard letters with you, then if the debt is sold, which is the norm in most cases, the new owner does the same thing, your talking a year or more of collection activity after default.

So there is often no rush to do anything.

DisabledDan

funny_bunny said:

You can seek advice from stepchange but I wouldn't bother doing a DMP with them. 

I saw what their rookies did to one of my acquaintances.

One SC adviser added HP into DMP, my acquaintance didn't know about it until she was contacted by her HP lender for missing payments, another SC adviser added her son's DLA as an income and calculated her monthly repayment so high leaving her struggling to keep the heating on during winter.

All letter templates are available on national debtline or netcab's website if you decide to go self-manage dmp; they are like running your own show. You tell them how much you can afford to pay.

For mortage, you should seek advice from others but HP should be excluded from DMPs.

I did not have a pleasant experience with Stepchange, even asking for advice I found them to be judgemental pwicks.

I did call National Debtline for advice and were the complete opposite, they told me all my options, understood my position and spent ages on the phone with me.  They also told me the pros and cons of each debt option.

The thing to understand is that any debt default will remain on your credit record for 6 years, the only leverage any lender has on us is our buying into the system.  I think you will struggle to find a competitive mortgage with a very good broker, so I would budget on your existing lender remaining with you at their standard rate.

Floss

DisabledDan said:

The thing to understand is that any debt default will remain on your credit record for 6 years, the only leverage any lender has on us is our buying into the system.  I think you will struggle to find a competitive mortgage with a very good broker, so I would budget on your existing lender remaining with you at their standard ratrate.

Most high street lenders will shift an existing borrower to a new deal from an ending deal online, without credit checks. Check your deal for when you can shift, and look on your lender's website for their best offers for existing borrowers.