No choice but to consider DMP - help appreciated!

fatbelly

There are no particular rules in a dmp and no magic 10-year point. It is known as an informal solution

If you don't stretch yourself to the limit, you can probably save on the side, and put in there any overtime payments, or bonuses or windfalls. At some point you will be able to bring it all to a close with full & final deals

It's worth being aware of IVAs as someone is likely to suggest them at some point. But this is formal insolvency so you really would have to consider the cons because IVA sellers mostly concentrate on telling you the pros.

ManyWays

So as long as I can pay back in under 10yrs a DMP would usually be accepted regardless of the equity
As @fatbelly says, there are no rules like that in a DMP. The danger is often not that a DMP "will not be accepted" but that an overly long DMP will be accepted when a form of insolvency may be better for you. 

kimwp

It should be noted that's there's not really an acceptance of a dmp, it's more about you deciding whether to do a dmp. A few creditors might grumble and ask to see your accounts, but they've no right to see them. With a dmp, you decide what you can afford to pay them.

emsgirl

Hi all I just thought I'd update you. Sorry for the delay but one of my children has been seriously unwell so we've had that to contend with also unfortunately.

I've had some great successes with affordability complaints as follows:-
American Express refunded £4300 leaving a balance of £720 
Halifax refunded £1100 leaving a balance of £4827
MBNA card 1 refunded £4898 leaving a balance of £5452
MBNA card 2 refunded £200 leaving a balance of £2200
Barclays overdraft refunded £4670 leaving a balance of £670
Admiral loan refunded £2020 leaving a balance of £5464

So this is an incredible start and all thanks to the information I found on these forums so thank you all so much. 
American Express have left the card open but reduced limit to £1000. Halifax and MBNA 1 cards have closed the accounts and said I can repay the monthly amounts and they have removed negative entries so far from my credit reports. They said if I have any further late payments then these would be removed once the amount has been paid back in full. Admiral also have said any negative entries on my credit report will be removed once the balance has been paid off. Admiral have also said it is not policy to default a loan once it has been accepted as a complaint for affordability so looks like I won't be defaulting on this one but once it's paid my credit record will clear.
Virgin money have denied affordability was an issue so I've sent that complaint off to the ombudsman (balance £6500). Barclaycard and Zopa have also denied affordability was an issue and so I have sent ombudsman complaints for these also. Respective balances £8650 and £12883. I still have a £2000 balance on an M&S credit card and a £1000 balance on a Next account but I haven't complained about these as I believe they were affordable.

I had stopped payments on all accounts to build up an emergency fund and wait for defaults as suggested whilst the affordability complaints were going through so I have managed to put some money aside.

Zopa is making me nervous as they were the one I thought was most obviously an affordability issue as it was such a large loan with huge monthly repayments taken at a time I had a lot of other debt already but they rejected the complaint and when I contacted them to offer lower payments they refused outright and said they would only consider that once the loan has defaulted. I'm worried about defaulting with them as they are the largest amount so it would be difficult to get the money together to pay this back quickly if necessary i.e if they decide to be more forceful with going down the route of CCJ or worse. I have managed to save approx £2000 for my emergency fund but to catch up on payments with Zopa I would have to use all of this so it would essentially wipe it out so I'm not sure whether to do that or let it default and hope it just goes along the normal route of lower payments/debt collector/reduced final settlement. I'm just nervous as they are a peer to peer lender rather than a high street one so may be more aggressive - they haven't shown any signs of being helpful so far. 

Also as I've had so much success with the other balances being reduced and being able to pay them back gradually I'm wondering if it's now more affordable is it worth me trying to avoid getting a default on this one account and waiting on the outcome of the ombudsman decision as I am really hopeful they will decide in my favour and then I can carry on paying things back as most accounts are now in a state where their balance has been reduced and they have said they will remove negative credit entries once balance is paid off (which should be before 6yrs so quicker than the time a default would last on my record anyway).

Sorry its complicated but any thoughts on the Zopa situation would be welcome and thanks once again for helping me get to the position I am in now as it is much better than it was a couple of months back especially now we have so much else to deal with.

ManyWays

The only point in going the DIY DMP route is to get defaults as soon as possible, including Zopa. Either you tough that out or sign up with StepChange, trying not to default on that large a loan doesnt make sense. Zopa are NOT a peer to peer lender any more, they are in the process of becoming a bank, and should be seen just the same as any other lender. 

emsgirl

Thanks that's much more reassuring to know they are no longer a peer to peer lender as that was making me more nervous about them!
 Since having the affordability complaints go so well which I'm very grateful for, it has meant a lot of the accounts now won't default as they are closed just waiting to be paid off or like admiral where they have said they won't default. So I was just rethinking my options as the balances on most accounts are also lower so wondering if it was worth avoiding defaults on the others. 
I think I'll likely default on it as £2000 seems a lot to stump up and lose all my emergency fund. Hoping they will then accept lower payments which they said they would once defaulted and of course interest will stop then. 
Thanks so much for your help!

fatbelly

Let's spell it out in case people missed that.

AFFORDABILITY COMPLAINTS REDUCED YOUR DEBT BY OVER £17000

That is an excellent start to your debt-free journey

Plus I expect more good news to come from the cases that are with the Ombudsman.

I don't think there's enough concern about Zopa to treat them any differently

emsgirl

I know - it's absolutely amazing and I never would have thought I would be in a more favourable position so quickly!

That's great I will try not to worry so much about Zopa thanks. I am really hopeful for the ombudsman outcome for the complaint against them too.

Thanks again for all your help and advice.

Rob5342

That's amazing getting that much back, I've had some good results with affordability complaints but that was only after escalating the complaints to the FOS, all the lenders rejected my complaints initially. 

Rob5342

ManyWays said:

The only point in going the DIY DMP route is to get defaults as soon as possible, including Zopa. Either you tough that out or sign up with StepChange, trying not to default on that large a loan doesnt make sense. 

It's not the only reason, self.managing can be beneficial when it comes to making settlement offers as you can make your own offers with creditors whereas Stepchange will want you to split a lump sum proportionally between them all. It can also be a lot more flexible if you want to stop paying one creditor after making a CCA request. If you want to.do anything different to the Stepchange way then having them involved just complicates the process and it can be far easier to manage it yourself