Advice needed please.

ColdPizza

I’m think of going for a DRO or DMP. 

Just wanted to know a few things. For current debt do I state the amounts taken out, the amounts paid/current balance  or total due with interest? 

Eg loan £5k, current balance £4,500, total due over 24 months £8.5k which do I write to StepChange? 

Currently I have informed two of my lenders about my difficulty, the two whom I believe leant to me recklessly. I’ve stopped the DB with both and received two opposite responses. 

Lebdable have been very helpful. After 4 weeks I received a second letter from someone telling me they were still investigating my complaint etc and would get back to me. 

118 have been very poor. Only received emails on the day I made my complaint. One to ask to verify my bank, address & mobile number (for security, apparently). Second just generic. 

Since then they have taken money out of my account twice. 1 on a payment due date, the second time two weeks later just yesterday when no payment was due. Don’t know why they would do that, are they even allowed to do that? It was don’t through debit card so bank said they can’t do any thing while it’s in pending stage. 

They have not replied to my email today complaining that they withdraw money from my account on a day when it wasn’t due to be taken.  All I can hope is that they don’t claim it and it gets returned. 

My other debts are with my bank £30k now standing at around £23k, another lender £5k, been paying £151 monthly since Feb. £2000 overdraft. 

I like the idea of a DMP, especially if the interest can be cancelled from some of the providers. As it’ll give me the opportunity increase payments when/if my situation changes. But also knowing very well that life can change for the worse a DRO is also appealing as it means hopefully after a year it’s over and I get a fresh start.

Rob5342

If you go for a dmp then make sure you stop payments and wait for the accounts to default before you start the dmp. Defaults stay on your credit report for 6 years after they are applied. If you start paying straightaway you will het AP markers which stay on your credit report for 6 years after the debt is paid off so your credit report could ne harmed for twice as long. 

ColdPizza

Can I do anything about Money 118? 

They have taken money out of my account twice, one on date payment was due. Now two weeks later when no payment is due (it’s still pending ) but deprived me of urgent funds. 

Also it’s strange. But since my complaint yo them they did send one extra message on the day the first payment went after my complaint I received a message thanking me. My Direct Debit has been cancelled, they are taking from my debit card 

Grumpelstiltskin

OK You have made 2 mistakes.

1 Jumping in too soon.

2 Contacting your creditors

You should have cancelled all your debt direct debits and waited for the debts to default using as much money as you could to get an emergency fund together.

I have a feeling that you may have to report your card as lost to get it cancelled but you will need some cash to tide you over.

sourcrates

118 are taking money via your debt card, under what is known as a "constant payment authority" or CPA.

The quickest way is to ring 118 and tell them to stop taking payment via that method, if that doesn't pan out, you need to contact your bank and ask them to cancel the constant payment authority to 118 118.

See here:

Continuous payment authority: manage recurring payments - MSE (moneysavingexpert.com)

Reporting cards lost and obtaining a new card did work with some lenders in the past, but not all, however it is something you may want to do in addition to the above.

ColdPizza

Thanks all. Yeah so much to learn. I contacted those two because I wanted to raise a reckless lending complaint and hope I’d at the very least get the interest cancelled, but now I’ve realised interest gets stopped on defaults etc 

ColdPizza

I’m think of going between a DMP or DRO. 

If I go for DMP, just wondering what kind of repayment I can get agreed. 

Debts. 

NatWest: 30k current around £22k. Repay £668 pm 
Lebdable £5k been repaying £201 since Feb, if interest gets removed it should be currently below £4K. Repay £201 pm
Novuna £5k Repay £150 since Feb
118 £5k £362 p/m since August might be able to get interest removed. 

MBMA (credit card) been making minimum payments since July 2023. Balance around £2000
Bank overdraft £2000 minimum payments forever.

income £3000 per month. 

£700 received from parents but this is to buy shopping for them, pay for Ubers to take mum to hospital, etc 

outgoing £2300 rent £167 council tax , £150 gas & elect, £22 phone bill, £35 internet & TV license. Food around £200 per month. Public Transport £40-60 per month. 

My biggest debt is with my current account. So I should open a new one? 

My preference for DMP is because o want to still increase my income, and increase my payments if I do. My biggest hope is to remove the interest from the debts, especially the ones that may have been unaffordable. For these I believe I have a good case with 118, Lebdable, maybe Novuna. Not so much NatWest as when they meant me the £30k I was bringing in between 4-7k a month but times changed. Lebdable & 118 saw my account and should have seen that in goings vs outgoings was close equal each month. 

So just wondering with these debts is it realistic to expect a DMP of say £200 a month? 

fatbelly

Yes you need a new bank account unconnected to your debts

RAS

We've got no way to know what's reasonable based on the information provided. If you can afford £200 pm in repayments on a DMP you are not eligible for a DRO.

You need to start by getting a new basic bank account somewhere completely unrelated to your existing creditors. Basic accounts don't require credit checks and don't offer overdrafts. Or try Monzo or Starling.

Move your salary and essential DDs and SO over manually, do not switch as that transfers all the creditors payments as well.

Then stop paying creditors. When the debts default, interest and fees are halted. Save money into an emergency fund until the defaults are issued. 

If you make arrangements to pay immediately, they will remain on your credit record for 6 years after the debt is paid off.
If you let them default, your credit rating clears 6 years later, even if you still owe money.

ColdPizza

Update on unaffordable lending claims. 

money 118: Their internal department had outright rejected it. Received an explanation saying that they did thorough checks. All my balances were paid off in time etc. Will be referring to FOS 

Lendable have replied asking for 3 months bank statements leading up to when the loan was taken, so they can investigate further. Have provided them with the statements. 

Surprised by the two contrasting approaches. I’d expect at least some consistency in how they investigate 

ManyWays

ColdPizza said:

I’m think of going between a DMP or DRO. 

If I go for DMP, just wondering what kind of repayment I can get agreed. 
----

My preference for DMP is because o want to still increase my income, and increase my payments if I do. My biggest hope is to remove the interest from the debts, especially the ones that may have been unaffordable. For these I believe I have a good case with 118, Lebdable, maybe Novuna. Not so much NatWest as when they meant me the £30k I was bringing in between 4-7k a month but times changed. Lebdable & 118 saw my account and should have seen that in goings vs outgoings was close equal each month. 

So just wondering with these debts is it realistic to expect a DMP of say £200 a month? 

You don't have a free choice between a DMP and a DRO. You have roughly 40k of debt. 

What you pay in a DMP has very little to do with the debt total, it is set by what you can afford on a reasonable budget.

If that is less than £75 you can get a DRO, in which case there isnt any chance of you clearing that much debt in a reasonable period even if you get a pay rise and win some affordability complaints.

If it is under £125 its worth looking and seeing if some of your expenses are too low and should be higher so you would come under the £75 DRO limit.

If you cant get under the DRO limit, then its a DMP or bankruptcy, because you haven't suggested any assets which would make an IVA better than bankruptcy. 

So why not post a Statement of Affairs to see what your spare income may be?