Just started a DMP what now ?

Road2recovery7

Hi. I’ve just paid my first payment to StepChange. 

I have £42,000 worth of debt to pay off at and it’s going to take many years. 

Reading through the threads today, I’m wishing I stopped paying my direct debits a month or two before I started a DMP. I could have paid off my store card and overdrafts with the money I was paying for my CCs and loans. 

Anyway not a lot I can do about that now. 

Mentally I’m feeling a bit better having started a DMP, I’m just worried about the letters I’m going to get and the notifications about my credit score going down. I’ve already received a termination letter from Barclay card. Even though the payments are up to date. 

I will need to remortgage in a few years also. Am I right in thinking that I will be able to remortgage with the same lender without a check? Doing a product switch ? 

Is there anymore advice anyone could give me with the first few months of starting a DMP. 

Thanks for reading 🙌

Grumpelstiltskin

Well you realize your mistake of jumping into the DMP too quickly.

If your debts haven't defaulted your credit report will be marked  with Arrangement to Pay markers. You do realize that they don't disappear until 6 years after the final debt payment, so if your debt takes 8 years to pay off they will not disappear for 14 years.

With defaults they disappear 6 years after the default date whether or not the debt has been paid off.

You have to make the decision whether to carry on with the Stepchange DMP or cancel it, stop paying and let the debts default at that time you can start a self managed DMP.

Have you got an emergency fund ? If not you can use what you have been paying Stepchange to build up your emergency fund.

Rob5342

I got into the same situation and only realised later that I should have defaulted first. I stopped all my payments and waited for defaults and then carried on myself. It took longer than it might have down had I stopped paying from the start, but I think I'm in a better position with them all defaulted now than I would have been had I carried on with the payments.

With most lenders you can switch to a new mortgage deal with no credit check. I have four defualts and switched to a new Santander deal with no problems at all, it took a few minutes on their website.

sourcrates

To be fair, most lenders will default you after a while, and if they don`t you can write and complain as to why they haven`t, so that`s not a massive issue.

Don`t worry about letters, re-cycle bin fodder, you have a plan in place, that`s it now, all should tick along nicely, and your credit score is a meaningless number which is not important right now.

Within your budget, you should try and make room to save an emergency/settlement fund, as you will need access to cash occasionally.
This can come in handy further down the line when your debts have been sold, and the new owner wants to make you a settlement offer, which most will in time, this can save you hundreds of pounds, and knock years off your DMP..

You are correct about your mortgage lender, so no worries there, all in all, not too bad a situation.

JohannesW

Started my DMP and most of my accounts have defaulted, waiting for a few more. The one account which has defaulted a few months back was given to Moorcroft. I contacted them yesterday to set up a standing order with them, but they were insistent on giving a 6 months hold on the account. And said they will contact again in April 2025 to discuss.  Is that okay?
Then to dbl check, once i have an account that has defaulted, and whoever writes to me, I set up a standing order with them. 

My end goal is hopefully to get a discounted amount that I can settle. 

Been reading through all the forums and have learnt alot!!!