Still being charged interest on DMP

dolly_mixtures

Hi guys, 

New here and very very stressed about my DMP with StepChange. I've been on the plan for around 10 months - I have about 16K of debt with 5 creditors (all credit cards). Three of the creditors - Virgin Money, Barclaycard and NatWest - didn't accept the DMP and have continued to contact me and charge interest. 

I'm most stressed about Virgin Money - it was a 0% balance transfer card and the 0% interest period has now ended and I'm being charged massive interest. I've had a letter through saying the account will default to a credit reference agency if I don't pay by 8th October. My question is - is the credit reference agency likely to continue to charge the same interest? If so, is there anything I can do to stop this? 

Any advice hugely appreciated 

ManyWays

How much is Step Change paying Virgin (and Barclaycard and NatWest) and how much is the normal minimum payment on the card?

RAS

Did you start the DMP before you allowed the debts to default?

Step change tend to encourage people to start before that, which means creditors can issue AP markers rather than defaults. Check you credit records, please.

MEM62

dolly_mixtures said:

Three of the creditors - Virgin Money, Barclaycard and NatWest - didn't accept the DMP and have continued to contact me and charge interest. 

What (and why) are you paying them?  You should pay nothing until these debts default and interest is stopped.  

Rob5342

It sounds like you have started the dmp too early, unfortunately Stepchange encourage thst. You sound really have stopped paying everything and waited for them to default, then the Interest would have stopped and you could habe started repaying them. The advantage of that is that they would dtop off your credit report six years after the default date, instead of 6 years after they are repaid which is what happens with a payment arrangement.

I'd stop paying them all and start again when they default. 

sourcrates

dolly_mixtures said:

Hi guys, 

I've had a letter through saying the account will default to a credit reference agency if I don't pay by 8th October. My question is - is the credit reference agency likely to continue to charge the same interest? If so, is there anything I can do to stop this? 

I think you are somewhat confused by what you have been told here.

What they mean is your account will be defaulted (which is what you want) a credit reference agency just reports your information, they are not a lender, and have no ability to charge you interest.

You may want to re-think your strategy here, pause your DMP until your debts default, at that point no further interest can be charged, then re-start payments once things settle down.

dolly_mixtures

Thanks all for your comments. Sorry, I think I meant a debt collection agency, rather than credit reference agency. I read that a debt collection agency may continue adding interest and charges according to the original credit agreement and panicked. 

Yes, I started the DMP before any of the accounts had defaulted which was in hindsight an error! But had no clue about any of this process I’m afraid. The largest debt (Barclaycard) defaulted pretty quickly and I’m hoping that after 8th October the Virgin Money one will too and interest will be stopped. 

Rob5342

As long as you dont pay the amount mentioned in the default notice then it should default when they say and all interest will stop.

DCAs will be open to settlement offers at some point, so once defaulted I would pay less than you can afford and save the difference towards making settlement offers later. Once they have been with DCAs for a while you may want to consider making CCA requests, if they can't provide the cca then the debt can't be enforced and you can just stop paying. 

ManyWays

Sorry but can you answer my question, How much is Step Change paying Virgin (and Barclaycard and NatWest) and how much is the normal minimum payment on the card?

If StepChange is paying them more than the normal minimum, then they wont default this. If they are paying less, then you can complain to Virgin and ask them to remove the added interest. 

sourcrates

dolly_mixtures said:

Thanks all for your comments. Sorry, I think I meant a debt collection agency, rather than credit reference agency. I read that a debt collection agency may continue adding interest and charges according to the original credit agreement and panicked. 

Yes, I started the DMP before any of the accounts had defaulted which was in hindsight an error! But had no clue about any of this process I’m afraid. The largest debt (Barclaycard) defaulted pretty quickly and I’m hoping that after 8th October the Virgin Money one will too and interest will be stopped. 

Because of the way Stepchange/PayPlan divide your available disposable income between creditors, on occasion the DMP payment exceeds the contractual payment, and therefore the lender won`t default you.

You need to check and see what is being paid against what the contractual repayment should be.