Defaults starting to hit credit file…guidance?

allystar

One more…sorry! Do I wait for them all to default then go to StepChange or make token payment once defaulted til the rest catch up?

kimwp

Ask as many questions as you want to!

I don't know the answer, but have you thought about managing the dmp yourself? Then you have full control, can change payments etc without going through a third party.

Grumpelstiltskin

Why not run the DMP yourself?

By that time you will hopefully have a valid budget, you then will know the total amount you can pay and you need to work out the pro rata payments to each creditor and you can start payments when they have defaulted.

Rob5342

Managing it yourself is much easier. You just set the payments to whatever you want, whenever you want, instead of having to contact Stepchange each time to ask them to do exactly the same thing, and probably provide an updated budget each time too.

Defaults can vary. Barclaycard were great with me and defaulted after a few months and backdated the default to when I started the DMP so my credit report was harmed for the least possible time. Virgin on the other hand were extremely diffiicult and took over two years to default (partially as I'd started a payment arrangement with them but even after I stopped paying them to try and get a default it was about 15 months until they actually did.)

RAS

When they default set up a small payment to each creditor by standing order. You really need to do an SOA so you understand how you got into this much debt, and how much slack you actually have to pay creditors.

When they've all defaulted, it's up to you if you want to stick with self managing or use a debt charity. If at a later date you gets some very good settlement offers, you may need to self manage again.

EssexHebridean

Allowing that you now know that canceling things with Stepchange is the best thing to do now, that gives you breathing space to learn more about self managing and decide whether you feel comfortable with it, doesn't it. What works for one person doesn't necessarily work for another, but a lot of folk have found self-managed to be far easier in the long term, and far less stressful too as you have the control yourself and don't have a feeling of needing to ask for "permission" to do things, or make changes. 

allystar

I have 3 credit cards with Virgin…from what I can gather, Virgin are extremely slow at defaulting. December was my first month not paying and they have applied late fees and now interest (all were zero %). Will this just keep being added until default? What happens if they take a year to default me…

Once other lenders default, do I write to them with what I plan to pay or just start making a payment.

The StepChange seems the easier option but I want to have the defaults for the least time possible beyond 6 years from now

2021rdsunshine

allystar said:

I have 3 credit cards with Virgin…from what I can gather, Virgin are extremely slow at defaulting. December was my first month not paying and they have applied late fees and now interest (all were zero %). Will this just keep being added until default? What happens if they take a year to default me…

Once other lenders default, do I write to them with what I plan to pay or just start making a payment.

The StepChange seems the easier option but I want to have the defaults for the least time possible beyond 6 years from now

Creditors can add late payments fees and interest until they default. Once they default they normally pass the debt to debt collectors or they sell it . If you then start paying them whatever you decide to pay, eventually whoever owns the debt will start making some offers to you for settling the debt at a much reduced cost. So it doesn’t really matter how much they add to the debt until they default you. 

If you go on to self managing your DMP you can pay creditors with a standing order from your bank account , no need to write them. I’m sure you’ll find payment details from their letters. That’s what I’m doing anyway and it’s working. Some creditors write insisting on filling forms of income and expenditure but I just ignore it. They getting a monthly payment, that’s it 

allystar

Thanks!

I hope you don’t mind, I’ve read your original thread when you were starting out. Looks like it took around 6 months for your defaults to start.

at what point did you start making payments to creditors?

I’ve never missed a payment in my life, so this is completely alien to me!

Rob5342

allystar said:
at what point did you start making payments to creditors?

The time to think about starting payments is when the debts have defaulted and people start writing to you. If you have a good emergency fund built up then you may decide to start then, if you want to save up a bit more then there's no harm waiting a bit longer, or starting with minimal payments and increasing them later.