Help with Debts & DMP

Smiggsss

sourcrates said:

Smiggsss said:

I appreciate everyone’s thoughts and comments, I just need help. Should I just stop paying all my debts now. When a debt defaults on my credit score from a creditor and they send me a letter shall I call them and offer them a token payment of say £5 £10 a month ? 

Well we are unaware of your circumstances, and debt solutions are circumstance dependant.

It was suggested you fill in an SOA, then we would have figures to work with.

However, based on what you have posted, I think its best to stop paying all non essential debts now, there will be a few letters and calls, but that`s all manageable, and just normal collection activity.

It can take a few months for your account to default, a formal default notice would be sent, giving a 14 day response time, let that elapse, save an emergency fund, that`s most important, when debts default creditors may retain ownership of the debt, but assign a debt collector to manage the debt, or they may keep it "in house". Sometimes the debt will be sold, whatever happens you will be written too.

You can choose to go with stepchange at that point, set up a DMP with them, or do it yourself, very simple, its not necessary to write letters etc, payments can be proposed/set up online, most debt collectors have spanking websites these days.

There is no need to panic, and certainly no rush, debt collection moves very slowly, there is a very small, outside chance of a lender taking action through the courts, they must follow civil procedure rules, so a letter before action will clearly state what it is, should you get one, you must act on it, its very unlikely to happen, but its something to be aware of.

Hi mate, 

I will get this done just trying to find APRs 

my defaults will start 15th September 

can I not contact them now and advised and go on a payment plan with them ?

Rob5342

Wait for them to default first, you don't want to do anything that might delay or stop them defaulting you. 

Grumpelstiltskin

Don't have any contact with your creditors, block their numbers, delete any E Mails or Texts but open and file any letters you get through the post.

As Rob says don't encourage them in any way.

Floss

Smiggsss said:

Hi mate, 

I will get this done just trying to find APRs 

my defaults will start 15th September 

can I not contact them now and advised and go on a payment plan with them ?

As Sourcrates has said, defaults take months. I think you mean your payments will stop from 15th September?

Also, if you agree an arrangement with them, markers for that stay on your credit record for 6 years AFTER you finish paying, whereas defaults disappear from your credit record 6 years after being noted.

Rob5342

And also once defaulted they are more likely to be sold to debt purchasers who will be open to a reduced settlement offer further down the line. 

Smiggsss

Floss said:

Smiggsss said:

Hi mate, 

I will get this done just trying to find APRs 

my defaults will start 15th September 

can I not contact them now and advised and go on a payment plan with them ?

As Sourcrates has said, defaults take months. I think you mean your payments will stop from 15th September?

Also, if you agree an arrangement with them, markers for that stay on your credit record for 6 years AFTER you finish paying, whereas defaults disappear from your credit record 6 years after being noted.

Sorry not been on this been busy in work. 

Also trying to complete the form

only other issue is the added interest before they default that’s the main issue. 

I did have a agreeed plan with Monzo which am now going to ignore. 

I should be able to upload the form by Monday any help with be greatly helpful moving forward. 

Only issue with step change if they see 3 months worth of bank statements and they then say you can afford 400/500 a month ( this is what am already paying ) then it’s pointless going with them. 

The issue is am already paying £468 a month this leaves me around 400/500 a month for everything else 

emergency’s / food / clothes / social life etc 


they managed to get it down to £170 a month which I was happy with. They asked for bank statements am in the process of joining a new bank so the only issue will them seeing only my bills coming out and having ex amount left because I have stopped the debts 

RAS

Hi, jus t be clear.

When you cancel the payments to creditors, that is not a default. 

It will takes some months of non-payment before the creditor send you a scary letter demand repayment of the full amount, or they will register a default on your credit record. You pay nothing.

Once that default is registered you start a payment towards the debt.

That way your credit record clears 6 years after the default.

If you make token payments and delay the default, or the creditor marks your credit record as Arrangement to Pay, your credit record is damaged for a lot longer, 6 years after the debt is cleared.

Which is why we suggest you delay starting a DMP with Stepchange.

The other reason for delaying is that you use any spare cash to create an emergency fund. Which means you can get a new cooker if it fails. Road test your SOA and build up the funds to make cheaper annual payments for insurance etc. It means you are less likely to have to pause your DMP every life gets in the way and feel much more in control.

And once the debts are defailted a lot of creditors sell the debt on, for a massive discount. Give it two or three years and you'll be offered settlement at a reduced rate, that'll make up for the added interest.

And, of course once debts default, interest and fees stop. If you're getting AP markers the creditor may still charge interest.

Smiggsss

Does anyone have a link for SOA - lemonfool not opening up

RAS

Go back to sourcrates' post on page 1 of your thread. They have a link in their signature to SOA calculator, stoozing.com lead to the same form, basically.

Smiggsss

Well the phone calls have started
and this is only for £24 and £49 payments