Statutory Legal Audit Plan (Debt solutions)

michaelyallop

stu12345_2 said:

when on SSP you can get universal credit which will go to paying your rent, yours isn't excessive and you can also claim council tax help.

I think your private sickness insurance is a waste of money tbh
 as even  many folk on the dole manage ok. without private health insurance.

obviously your debts won't be paid, but all your basic needs will, housing, council tax, basic living costs

yes as sourcrates says many  debt solutions and debt legislation  are free, except bankruptcy which is a £680 one off fee

and never go down the IVA route it has hidden costs which are huge

many debt legislation  rules only costs the price of a stamp and a hand written letter by you

if you follow our debt plan, don't get stressed if you get a few months of letters, texts, even calls from creditors, do not engage at all. it's all a standard process the creditors are doing

some folk do reply to creditors and offer a small payment, all that does is slow down the defaulting process!!!

some folk fold thinking they have to pay their usual amount and end up doing so , leaving no money for rent or food.

it's only simple consumer debt, it isn't court fines as such, 

creditors have no power before it defaults.
only power is potentially a few years down the line if it's defaulted, youve offered nothing, never spoke to them.
it's only then a few, very few may consider a ccj application. 
 even then you can deal with even that at that point, but you will not have that problem, your plan is sound, standard and regularly used.

so let them give up and default you, then engage with them.

luck isn't involved, it's preplanning and the application of that plan that will work.
so I won't say good luck, as luck is not involved 
cheers

write in again to say how your plan is going please 

Thank you again. I appreciate it a lot. I will write back again soon when I know what is happening. 

I know it was my fault that I got into this state, and now I need to get back out of it. So thanks for helping me make a start. 

Thanks again guys. 

michaelyallop

Just a quick update. To above. I’ve been attempting to pay off my debt before entering into any sort of debt recovery. 

Just a quick question. With any of these options or advice, if I stop paying my debtors and start to build a fund, could I still attempt to clear one of the debts? For instance one of the smaller debts? Or does this defeat the object? 

Thanks again. 

sourcrates

michaelyallop said:

Just a quick update. To above. I’ve been attempting to pay off my debt before entering into any sort of debt recovery. 

Just a quick question. With any of these options or advice, if I stop paying my debtors and start to build a fund, could I still attempt to clear one of the debts? For instance one of the smaller debts? Or does this defeat the object? 

Thanks again. 

You can do as you wish, there are no rules with informal debt solutions, any smaller creditor you want to pay off, do so.

RAS

If you sign up to Stepchange or Payplan, they allocate your "debt money" pro rata to creditors. If you DIY, you decide how to pay off the debt.

Once the debts are defaulted, interest is frozen and fees stop, do there is no advantage in paying the highest interest debt first. You might want to pay more towards the smallest debts to clear them, for the morale boost?

How is your emergency fund going because you need money for car problems etc? And how many of your creditors have defaulted? Have you been able to set up affordable payments?

I'd suggest that in the first instance you stash 10-20% of your "debt money" until you know that you've covered everything in your budget and stress tested for 6 months or so. 

michaelyallop

Thanks for the advice. 

I’ve been trying to build a little emergency fund and pay off my family debt before pulling the trigger on defaulting. So at the moment I have saved up approximately 1500 and paid off most of my family debt by scrimping and saving… it’s damn near killed me but I honk I’m nearly ready to default but wanted to know if I should attempt to pay some of my smaller debtors while defaulting and building an emergency fund. 

I think I maybe able to pay off some of these smaller debts without defaulting, as you say for a morale boost, but it damn near nearly killed me with the family debt. 

Thanks for the advice. 

ManyWays

If you are defaulting on several debts, it will make very little difference to your credit score if you default on the smaller ones. And I don't think a "small morale boost" that nearly kills you is a good idea! So I suggest you treat all your creditors the same and default on them all; this will speed up building an emergency fund, and it looks fairer to treat them all the same.

RAS

Thanks for the update. It rather changes the situation. I hadn't appreciated that you've carried on paying the consumer debts and also clearing family debt.

It will take quite a while for defaults to be issued once your stop paying the consumer debt, 6-18 months is normal. It may even take a few months for creditors to enter anything like AP markers on some accounts.

It makes little or no difference if you stop paying 4 accounts or 14. You really do need to get a new safe bank account into which your income can be paid. Do not use switch as that transfers all your creditor DDs.

Then just stop paying. No requests for a few months reduced payment, interest reduction etc because that just delays the defaults. No point clearing smaller debts first.

Use the time before the defaults are issued to save the full amount into an emergency fund, which should be instant access savings. You need the minimum of one month's essential spends, preferably more.

If you been living on beans on toast, you also need to address the fact that your recent expenditure probably will not have made provision for expected annual costs over the next year? You need to be putting 1/12 of the cost of insurance, transport costs, birthdays, medical and dental, clothing, holidays into a separate bank account (I refer to it as a budgeting account). That way things that come up every year are covered rather than being nasty surprises.

Also use the time before the defaults to live within your budget and adjust it if you discovered things that are missing or can be saved. That's the way to work out what you can afford to pay towards your debt after the defaults are registered.

michaelyallop

Thanks for this. So, just to update. I have been sent a letter from MBNA stating that they may default my loan and end my agreement if I don’t pay 2 months payments and send the whole debt to a debt collection agency. Is this normal? And do I ignore this too? As stated, it has only been 2 months. 

All the other debts are still awaiting default. 

Thanks in advance. 

Grumpelstiltskin

Yes ignore this and wait until you get a letter from some debt collection agency, then come back.

michaelyallop

Thank you for the advice. I appreciate all the help and guidance so far. It’s very nerve racking obviously when doing this process but will be worth it in the end. Thank you.