DMP check list and sanity check

Hi everyone. I have spent many hours going through old posts, reading testimonies and doing my research and first of all just want to say how good the information in here is and how much I appreciate everyone’s input so thank you. 

To my question/s. From my understanding the steps are basically:

statement of affairs (done)
budget (done)
default on debt (in progress)
once defaulted, set up payment arrangements

Last night I cancelled my direct debits and am ready to start the journey. I have £50k total so no small undertaking but I can no longer afford minimum repayments and want to get out of this hole. 

With regards to waiting for the defaults am I right in thinking that so long as I acknowledge the debt and simply tell them I’m struggling, they won’t pursue legal action? Once I’ve defaulted I just reach out with an offer of what I can afford?

I plan on going self managed for the flexibility. The reason for this is one of my debts is a credit card with the same creditor my mortgage is with (Santander). I naturally do not want to completely ruin this relationship as they have my mortgage. I don’t want to miss out on a fix deal (I have low LTV) and I certainly don’t want to go onto SVR once my fix rate ends in 2.5 years time. 

My concern is other creditors finding out I’m paying them separately (I plan on paying this down as much as possible during the period I am waiting for defaults) and obviously on the surface this can be deemed not fair to my other creditors especially once in the DMP. However due to the industries conduct risk principle I am allowed to essentially preserve my future as much as possible and it could be argued that keeping Santander outside of the DMP is mitigating future risk? Have I misunderstood that or does that sound reasonable?

Thank you in advance for any help. 
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Comments

  • ManyWays
    ManyWays Posts: 1,122 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    I naturally do not want to completely ruin this relationship as they have my mortgage. I don’t want to miss out on a fix deal (I have low LTV) and I certainly don’t want to go onto SVR once my fix rate ends in 2.5 years time. 
    Making a payment arrangement with Santander, or putting that card into a DMP, wont have any impact at all on your mortgage and you will still be able to get a new fix when the current one ends. I suggest you treat this just like any other debt, unless it is really small and you can clear it rapidly. 
  • sourcrates
    sourcrates Posts: 31,228 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 21 April at 12:51PM
    For the avoidance of doubt for the OP, and anyone else thinking of going down this debt management path.

    It would be extremely rare for an original creditor to take legal action to recover a defaulted debt, it might happen in a few specific cases, (if your creditor is a credit union, for example, as they seem to adopt a more direct recovery process) but 99.9% of the time they will just assign the debt to a debt collector, or sell it to a 3rd party.

    Legal action is more likely within the debt purchasing fraternity, but only if you ignore all attempts at contact, setting up an affordable payment plan will not in itself result in legal action, far from it, just to be clear.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 22,702 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    edited 22 April at 7:36AM

    To my question/s. From my understanding the steps are basically:

    statement of affairs (done)
    budget (done)
    Get banking sorted to a bank unconnected to any of the debts
    default on debt (in progress)
    Save an emergency fund
    once defaulted, set up payment arrangements



    Thank you in advance for any help. 
    I added a couple of bits to your list

    As for the rest, it's your dmp so run it as you wish
  • Quantumllama
    Quantumllama Posts: 11 Forumite
    10 Posts
    Still a very streamlined checklist! Yes my bank account is not linked to any debts and bar the Santander card will also be saving emergency fund/possible future settlement fund 
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,322 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Open an easy access  savings account with maybe a Building Society that has no connection with any of your debts and make sure you put as much as possible into it every month.
    If you go down to the woods today you better not go alone.
  • Quantumllama
    Quantumllama Posts: 11 Forumite
    10 Posts
    ManyWays said:
    I naturally do not want to completely ruin this relationship as they have my mortgage. I don’t want to miss out on a fix deal (I have low LTV) and I certainly don’t want to go onto SVR once my fix rate ends in 2.5 years time. 
    Making a payment arrangement with Santander, or putting that card into a DMP, wont have any impact at all on your mortgage and you will still be able to get a new fix when the current one ends. I suggest you treat this just like any other debt, unless it is really small and you can clear it rapidly. 

    I understand I will be able to renew and that won't be an issue but I've seen some evidence that essentially they can not allow you to renew you on a competitive fixed rate and just give you SVR. Which is why I'm hesitant to include them in the DMP. Have I misjudged that somewhere?
  • RAS
    RAS Posts: 35,088 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You go into your existing account 3-6 months before your renewal date and pick the current offer that suits you best and sign up, without a credit check. You need to check when you can your sign up for next fix as different providers allow this at different times. 

    If you don't choose a new fixed offer, you can revert to SVR.

    A lot of people here have done this, a few twice. What you don't do is employ a mortgage advisor to check whole of market options or ask them to negotiate a new fix with your existing provider based on your impaired credit record.  
    If you've have not made a mistake, you've made nothing
  • Quantumllama
    Quantumllama Posts: 11 Forumite
    10 Posts
    RAS said:
    You go into your existing account 3-6 months before your renewal date and pick the current offer that suits you best and sign up, without a credit check. You need to check when you can your sign up for next fix as different providers allow this at different times. 

    If you don't choose a new fixed offer, you can revert to SVR.

    A lot of people here have done this, a few twice. What you don't do is employ a mortgage advisor to check whole of market options or ask them to negotiate a new fix with your existing provider based on your impaired credit record.  

    My fear is if I default on that credit card debt with Santander they won’t be prepared to offer me a new fix and instead I will just go on their SVR. I know I will still be able to mortgage with them but I don’t want to be in a position where my only option is staying with them on SVR. 
  • ManyWays
    ManyWays Posts: 1,122 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    ManyWays said:
    I naturally do not want to completely ruin this relationship as they have my mortgage. I don’t want to miss out on a fix deal (I have low LTV) and I certainly don’t want to go onto SVR once my fix rate ends in 2.5 years time. 
    Making a payment arrangement with Santander, or putting that card into a DMP, wont have any impact at all on your mortgage and you will still be able to get a new fix when the current one ends. I suggest you treat this just like any other debt, unless it is really small and you can clear it rapidly. 

    I understand I will be able to renew and that won't be an issue but I've seen some evidence that essentially they can not allow you to renew you on a competitive fixed rate and just give you SVR. Which is why I'm hesitant to include them in the DMP. Have I misjudged that somewhere?
    I don't know what this "evidence" is. This is from their website https://www.santander.co.uk/personal/mortgages/existing-customers/change-your-mortgage
    Santander won't even look at your credit record (big exception if you have mortgage arrears, but you dont) and nor would any other high street bank, this isn't Santander being surprisingly nice.

  • Quantumllama
    Quantumllama Posts: 11 Forumite
    10 Posts
    I’m more just worried as I have a debt with them for a credit card when it comes to renewing mortgage obviously I would have defaulted on the credit card. I understand they don’t do another check. 
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