DMP Help

eyahooheat1

Hi looking for some advice i wish id checked here first ... i have 37k worth of credit cards debt on various cards.  I have payment arrangements set up by myself with most of them but reading here seems like letting them default and then setting up a dmp would have been better for my credit report in the long run, my question is the cards i dont have a payment arrangment with should i let them default? And then the cards with the payment arragements on do i not pay those also and wait for them to default then arrange a dmp through stepchange? 

Thanks 

sammyjammy

Have any of the debts actually defaulted?  If you look at your credit report what marker is being recorded by each of the creditors?  AP or D? How long since you made this arrangement?

fatbelly

Yes, it's what is marked on your credit file that is important.

If you have a default marker and your agreement is affordable, then carry on.

If they have marked the entry Arrangement to Pay, then you will need to stop paying to get the default.

eyahooheat1

There are currently no defaults on my credit report only A - arrangement to pay 

Do i need to stop paying all my credit cards even the ones with the arrangments to pay? They are unaffordable once my account defaults then what do i need to do? 

fatbelly

I think - read this

https://forums.moneysavingexpert.com/discussion/6496941/in-debt-and-wannabe-debt-free-first-steps-to-take -are-here-please-read-then-ask-questions

eyahooheat1

Im still unsure if i should be leaving the accounts with arrangements to pay already set up to default as they are already marked as a payment arragement on my credit file 

I want to use stepchange to handle the DMP is that possible? 

RAS

Yes it's possible but if you do that before the debts default, you'll be wrecking your credit record for a very long time. A DMP with Stepchange is likely to prevent defaults being issued, so you ideally need to get those sorted first.

You have A or AP markers indicating that you are paying a reduced sum. That will stay on your credit record for 6 years after the debt is paid off. How long do you think the DMP will last?

If your stop paying and the defaults register in the next year, you know your credit record will be repaired in 6-7 years time, even if you still owe money to the creditors.

eyahooheat1

I did a budget calculator on the stepchange website and that was coming back at 10+ years to pay back 

RAS

So your choice.

Do you want to wreck your credit record for the next 6 years or the next 16 years?

Or might you be eligible for a DRO, providing your excess income is insufficient and you don't own a house, have substantial savings or an expensive car?

eyahooheat1

I looked at that but im a homeowner ... i also have a updraft loan do i need to default on that too does that work the same as the credit cards? 

RAS

OK, so you really do need these debts defaulted. That'll freeze the interest and fees.

Many of them will be sold on and within the next few years at least some will offer reduced settlements. That'll bring your end date closer.