Help! £54K debt, DMP process and defaults.

Ripcurl

RAS said:

If you go to Stepchange immediately, they will set up payments immediately to their standard formula which will damage your credit record for 10/11 years based on your estimates. Because you will get Arrangement to Pay markers.

Stop paying, wait for the defaults, start paying each creditor once they default (and let you know who to pay). That way you know your credit record will recover in 6/7 years. Once they are all in, decide whether to continue to self manage or go to Stepchange. 

This makes perfect sense and now my plan of action going forward. So just ignore any calls and letters of demand until the default has come through?

Many thanks for your advice!

Grumpelstiltskin

Please check any letters you receive by snail mail. Ignore phone calls, texts and E Mails, block all numbers you can.

Ripcurl

Grumpelstiltskin said:

Please check any letters you receive by snail mail. Ignore phone calls, texts and E Mails, block all numbers you can.

'Snail mail' love it! Funny how you have to do almost the complete opposite to get the right outcome in the long term. 

Thanks for the advice!

RAS

Precisely. 

Opening mail is important.

You will get a scary letter demanding that you repay the entire debt or they will issue a default. Do nothing as that's what you want. Then wait for the default to be registered and the letter advising who to pay. Action that.

Beyond that watch put for any letter before action. Not likely as they know you own nothing and you are paying the debt down, but come back for advice if it happens.

iceandfire1

RAS said:

Good that your both on board and have no shared accounts. 

When the debt defaults, generally wait for a letter telling you if they are keeping the debt in house, assigning it to a DCA or have sold it. Then pay the appropriate piper, you decide how much, on-line using the provided bank detail's  and your account number.

You not not need to wait, but do not raise expectations of the early defaulters by paying them than you will be able to afford when they are all in.

Do your debts include Amex or a credit union?

Hello, may I know the reason why you are asking about Amex and a credit union? Do they have a different process? Asking because I have debt with Amex. Thank you!

Ripcurl

Hello to everyone again. It's been several months since I stopped paying on my CC and loans. First default was registered with Shawbrook in May but I am awaiting defaults on my CCs. Had a few default notices so it shouldn't be long until they come through. During this time I've not engaged with any of the banks. 

However, I've noticed some of my banks - HSBC for example have referred me to a debt collection agency before the debt has defaulted, which I didn't expect, as I thought it would be passed on after the default was registered. HSBC have passed the debt over to Moorcroft group. No default letter has come through from HSBC and on my credit the account is classed as 'delinquent'

So how should i proceed here? Many thanks....

sourcrates

There are many facets to debt collection, and creditors don`t like wasting time chasing up bad debts.

So now Moorcroft will have been engaged to get your account back up to date, so basically to collect the arrears on the account.

Once that had been completed, they would then hand the account back to HSBC, and you would continue to service the debt as per normal.

Obviously you don`t want that, you want it to default, so I think you might be able to guess what I`m going to say here.

Ripcurl

sourcrates said:

There are many facets to debt collection, and creditors don`t like wasting time chasing up bad debts.

So now Moorcroft will have been engaged to get your account back up to date, so basically to collect the arrears on the account.

Once that had been completed, they would then hand the account back to HSBC, and you would continue to service the debt as per normal.

Obviously you don`t want that, you want it to default, so I think you might be able to guess what I`m going to say here.

Ah understood, thank you! I wasn't sure whether Moorcroft had taken on the debt permanently.

 OK, keep quiet, don't engage and wait for the default to come through. 

sourcrates

Not unless they are asking for the full amount, are they?

I`m guessing the letter will say something along the lines of "we want to help you get your payments back on track"

Or something similar to that.

RAS

Some debts are assigned to a debt collector in an attempt to get the debtor to cough up, some are defaulted quickly then assigned or sold on. Just depends. It's not necessarily going to be consistent.