PRE-DMP Setup Questions

januaryblues25

Hi , 

Ok I've made this step and feel so much better already.
I am a prolific CC spender, have debt consolidated a number of times, I take loans to pay of balances and then spend on CCs again.  £80K+ .
I finally feel this is the answer -  no CCs available will enforce proper budgeting and no splurging.

I've started the process with SC -  after reading all advice on here - I see its best to build emergency fund in advance, ok.  (Which is good as we have a repair to my roof that really need addressing - which we don't have the funds )
I've set new bank account- changed salary bank details, and have taken up switch of DDS.
At this moment I have NO late/outstanding payments.  ( feeling sick, scared etc...)

So we need to default right, during this time do I just completely ignore creditors, or tell them something?
Thanks in advance

sourcrates

Just do nothing, allow the debt collection process to wind into gear, it can take a few months, and you need to be more careful if you have certain creditors, such as a credit union for example, as they tend to get litigious if ignored for very long.

Otherwise just let the standard process unfold, you need to be sure not to fall back into old habits though once you start this, I don`t see an SOA from you anywhere? 

That`s usually one of the first steps to take, are you certain a DMP is the answer?

januaryblues25

I've completed the application on SC with my SOA -  I just haven't signed on the dot here.

I agree need to not get into old habits.

My creditors   Lloyds Bank ( loan/overdrafts/CC)
Virgin/ ZOPA/118118/Sainsburys/ Bank of Scotland/ Very

Grumpelstiltskin

I hope your bank account is a basic one with no overdraft.

I also hope you haven't done the bank switch as that will move all the direct debits you need to cancel.
You need to transfer vital direct debits manually.

januaryblues25

Of course !
I've cancelled the appropriate DDS before activating switch.  The switch will be completed before payday , so I can double check upcoming DDs before any money hits the account, just in case any slipped through

Grumpelstiltskin

Yes check, we had someone on here where they had problems with this.

tigergambit

I think you should be expecting to wait around 6 months for defaults to happen. This might happen quicker with Stepchange BUT they will expect you to start paying immediately. It's judging the balance between how much you can save before you start paying against the interest your creditors will charge if you don't. SC are good at getting interest and penalties stopped but a backup emergency find is also very  reassuring.

Best advice I can offer is to post your SOA and listen to the experts on here of which I am NOT one.

RAS

You need to consider building up your house repair and emergency funds by the sound of it. Step change apparently allow £25 towards an emergency fund.

When the debts default, pay the creditor a small amount and get that roof sorted. Then increase payments.

Scarlet_to_Black

RAS said:

You need to consider building up your house repair and emergency funds by the sound of it. Step change apparently allow £25 towards an emergency fund.

When the debts default, pay the creditor a small amount and get that roof sorted. Then increase payments.

Just in the process of setting up my DMP with SC. I spoke to a debt advisor yesterday. They are happy to wait until April to set up the direct debit, which I didn’t think they’d agree to do. I told her that the reason I wanted to wait two months was because I wanted an emergency fund.  Her reply was that my budget should cover this (car/house maintenance etc) but I said that if anything went wrong quickly I’d not have built up a fund in monthly budgets. She then said that any emergencies I can contact them and pause payments if I need to pay out on anything that’s broken etc, however, she accepted my decision to start April 1st.  Their max advised budget for house maintenance is only £19. My budget is £75, which she accepted as this includes a gardener and window cleaner and they accepted the reason being I have a front and back garden and osteoarthritis, so need the help. They advise £25 as savings, but she said this is worked on a percentage basis.  They were thankfully more flexible than I thought they’d be. 

PM22

PayPlan allow me to see my private doctor at a cost of £300 a month and my creditors haven't questioned it.

sourcrates

PM22 said:

PayPlan allow me to see my private doctor at a cost of £300 a month and my creditors haven't questioned it.

They don`t "allow" it, they have no say in the matter, its your choice, not theirs.