Debt Collector or Debt Purchaser?

Suffyboyy123

Hello! I've been lurking on the MSE Debt-Free Wannabe forum for some time now.... here's my situation: 

In Dec 2022 I was unfortunately made redundant and it took 9 months for me to secure another role (I work in recruitment/HR so with reduced hiring, companies just didn't need someone like me). Anyway, I'd never missed a payment before then and my new salary is roughly £15K short of what I was making before. I'm in £49K worth of debt (personal loans & credit cards) and used to have a dmp with Stepchange which ran for 10 months. Having read a lot of threads here I decided to go down the self-managed route - literally sent my cancellation email to Stepchange on Friday. The main reason being was a couple of my loans (First Direct and Monzo) have AP markers and ideally I'd want to default everything (might as well seeing as I already have 3 from this situation and would want a clean credit file in 6 years time) so I think my dmp started prematurely. Plus I want to have better control of my debt, save up emergency funds & pots for potential full & final offers in the future. I do have a couple of questions though... 

1. I called First Direct to query why they hadn't defaulted after 10 months of reduced payments. They mentioned it takes them 12-18 months to default a loan! Is there any way to get them to expedite this? Shall I not pay them anything now and just wait until it defaults at that point? Can I ask them to backdate the default date when they finally do default as per when my other creditors 

2. A number of my debts (all credit cards) have defaulted and are now with other companies: 
Amex is now with NCO Europe
MBNA is now with Link Financial
Yonder is now with Lantern

My question here is how do I know they're debt collectors on behalf of the original creditors or whether they are a purchaser - I'm basically seeing if it's these companies I should be making full & final settlement offers to at some stage or wait it out until it gets passed on to someone else...

3. My loan with JN Bank defaulted 2 months ago but I haven't heard from another company to say they've taken over debt collections. I also checked checkmyfile on this and it says it has defaulted and now has a balance of £133 (the original balance was ~£10K). Any idea what's happening here? 

Thanks so much and apologies for the numerous questions

Suffyboyy123

Oh, and I forgot to mention that JN Bank's default date is when I first took out the loan...in March 2022. Is this an error on their part? 

stu12345_2

if they are debt purchasers you would have got a letter from the original lender and the new debt owner to say the debt was officially assigned between each other.

best to get a discount offer once it's been assigned, to new owner 

if it's still with original lender, then lender will write saying such and such are collecting in our behalf, please deal with them now.

not good for discounts yet

sourcrates

Hi, welcome to the forum.

To answer your questions, non payment usually encourages defaults quicker, but some lenders will still stick to their own policy regardless.
Debts are sold all the time, and you will be written too when this happens, its not uncommon for debt purchasing companies to then engage another 3rd party collector to collect on their behalf, it can get confusing.

Debt purchasing companies usually identify themselves quite well, and any collection company will refer to "their client" in any comms they send you, the name of the company also helps identify what they do.

Can`t help with the loan, anyone`s guess what`s happening there.

stu12345_2

some debts stay with lender, not sold on or using a debt collection company.

Tesco bank did this to me

fatbelly

Yes, the loan is a mystery. Best to leave it alone and see what happens

Those companies that have taken over other debts sound like debt purchasers to me

Sly72

stu12345_2 said:

some debts stay with lender, not sold on or using a debt collection company.

Tesco bank did this to me

Tesco Bank did the same to me, but have had a letter saying its all going over to Barclays in Nov 24. So suspect Barclays will sell it to PRA Group.

stu12345_2

I've had the same letter from Tesco bank that Barclays are buying the company in November 

Suffyboyy123

Thanks everyone! It's been a hectic couple of days sorting all of this out. 

Interestingly Link have already offered a 90% offer for full & final (which I thought was a little premature considering the debt was only sold to them 1 or 2 months ago). I've gone back with a 40% offer so let's see what they say.  

I've been reading loads about self-managing a dmp but there's still 1 thing I'm confused about. Should I cease all payments until full & final offers start coming through but ideally before the 'letter before action' (if they ever come) or should I pay token amounts? Across all 5 creditors I can pay £100 per month but throughout all these posts on the forum I've seen some people who can afford to pay something to their creditors don't in the hope of getting the full & final offers sooner rather than later. I know @DisabledDan and @sourcrates have mentioned something along those lines in other threads but I've read so many threads I think I'm starting to overthink this and confusing myself lol... 

Thanks again! 

sourcrates

You withhold payment initially in order to obtain defaults.

Once defaulted, all interest is stopped and the balance is frozen, you can then deal with the debt how you see fit, either by monthly payments, or waiting for settlement offers to be sent whilst saving.

Indefinite non payment runs the risk of potential legal action, but to comply with civil procedure rules, creditors must send an LBA before that happens, that would be your chance to avoid a claim form.