Some advice would be much appreciated - DMP or not? Self-managed or not. Significant debt

auburnheart

Rob5342 said:

Lots of people start out with Stepchange and then manage it themselves when they are more confident. If you just want to pay a proportionate amount to everyone then using Stepchange is fine and they take some of the admin away from you. If you decide to do things differently, pay non proportional amounts or make a settlement offer to one of them for example, then it would be better to move to managing it yourself as Stepchange could really mess things up for you. 

Stepchange do let you pay by Standing order if that helps, you just have to get the payment to them by the cut off date. 

Don't be too hard on yourself, lots of people have bad chapters in their life and mobeI used to be really on top of things financially with good savings, no debt and everything paid on time. 10 years, a baby and a new house later and I had £44k on credit cards and was using pay day loans all the time to cover things (I had over 50 listed on. My credit report and at ome point I had 6 lending stream loans open at the same time). In 2021 I started DMP, and now through a combination of DMP repayments, affordability complaint refunds and CCA requests I have got it down to £1700 of enforceable debt. 

Thank you so much for your support.

Did you do your own DMP from the beginning? How did things go for you? Did you get any CCJs? That's my biggest fear at the moment.
In regards to StepChange, what do you mean by messing things up in regards to settlement offers? Would this still be the case if I was to go with them for a year or so until I feel more confident? 

Have you done the CCA requests once they've gone to DCA's or? Most of mine still sit with the original lenders at the moment.

I'm still between two minds at the moment with everything. All providers are getting payments as per my own DMP at the moment. Updraft has requested bank statement to set up any payment plans, but I have yet responded to them. These payments will be exactly the same as to what I would do with StepChange but I presume they would share the payment total in a different way to NEDCAB.

Kauto5

Hi @auburnheart Thank you for sharing your DMP journey on here, it's been really helpful and I hope everything is going well.

I am about to start a DMP and have a loan with the same credit union as you. How have they been with you, any different to other creditors? Have they defaulted your loan and been ok in agreeing lower repayments? I'm most nervous about my credit union loans as they sound like they're the strictest 

Rob5342

I went with Stepchange to start with and then changed to managing it myself. It all went very smoothly and nobody came close to trying a CCJ. The thing to remember is that is a very last resort and isn't used that often, if they get some sort of payment from you without it needing much effort on their part then they are normally quite happy.

Stepchange take the approach of all treating all creditors fairly. If you had a lump sum they would want you to split the whole lot proportionally between the creditors which can be a poor use of your money. If you handled it yourself you could for example approach one and settle it completely for a much reduced sum which could save you a huge amount overall. If you use them now then that won't make any difference to what you could do when the time came to make settlment offers. Stepchange can be useful but they should be treated with caution. You shouldn't use them until your debts have defaulted, then if you are happy with their "treat creditors equally" mantra then there is no problem using them to make your monthly repayments and that can save you a bit of administration. If you want to diverge from their approach or make settlement offers then you are far better off taking things into your own hands.

Yes I've made a few CCA requests and found that around £15,00o of my debt was unenforcable.

If you are already doing your own plan then I'd have thought that going back to Stepchange will give you more work than they will save you.

sourcrates

Taking legal action is a last resort, not a first response, and is mainly only ever done by the debt purchasing companies, and then only if you ignore them for a long period of time and they believe you can pay something, but aren't.

Original creditors tend not to go down that route, they just assign the debt to a collector, or they sell it.

If you have a payment arrangement in place then the chances of legal action are around the same as winning lotto, so you work it out.

Those who get CCJ`s for consumer debt are either unlucky, or they didn`t respond to paperwork, haven`t made payment to a sold on debt, or had a hard line creditor such as a credit union.

Kauto5

sourcrates said:

Taking legal action is a last resort, not a first response, and is mainly only ever done by the debt purchasing companies, and then only if you ignore them for a long period of time and they believe you can pay something, but aren't.

Original creditors tend not to go down that route, they just assign the debt to a collector, or they sell it.

If you have a payment arrangement in place then the chances of legal action are around the same as winning lotto, so you work it out.

Those who get CCJ`s for consumer debt are either unlucky, or they didn`t respond to paperwork, haven`t made payment to a sold on debt, or had a hard line creditor such as a credit union.

Is there pretty much no option but to try to carry on with normal full repayments with a credit union in order to avoid a CCJ?

fatbelly

We suggest that you try to reach agreement with the credit union on an affordable payment plan, then allocate whatever remains to the others.

This advice only really applies to a self-managed plan.

If you are heading to an insolvency solution, you would pay creditors nothing and in a dmp managed by a third party you let them work it out.

RAS

Kauto5 said:

sourcrates said:

Taking legal action is a last resort, not a first response, and is mainly only ever done by the debt purchasing companies, and then only if you ignore them for a long period of time and they believe you can pay something, but aren't.

Original creditors tend not to go down that route, they just assign the debt to a collector, or they sell it.

If you have a payment arrangement in place then the chances of legal action are around the same as winning lotto, so you work it out.

Those who get CCJ`s for consumer debt are either unlucky, or they didn`t respond to paperwork, haven`t made payment to a sold on debt, or had a hard line creditor such as a credit union.

Is there pretty much no option but to try to carry on with normal full repayments with a credit union in order to avoid a CCJ?

No. You need to talk to the credit union, tell them the full extent of the problem and how much you have per month to pay towards all your debt. They may want more than pro rata, but hopefully will accept a much reduced payment. 

If they have a physical office, try an appointment and speak to them personally. And explain that if you lose your job, it will take a lot longer to repay the debt.

Don't expect a discounted settlement which you might get with a bank account.

Kauto5

RAS said:

Kauto5 said:

sourcrates said:

Taking legal action is a last resort, not a first response, and is mainly only ever done by the debt purchasing companies, and then only if you ignore them for a long period of time and they believe you can pay something, but aren't.

Original creditors tend not to go down that route, they just assign the debt to a collector, or they sell it.

If you have a payment arrangement in place then the chances of legal action are around the same as winning lotto, so you work it out.

Those who get CCJ`s for consumer debt are either unlucky, or they didn`t respond to paperwork, haven`t made payment to a sold on debt, or had a hard line creditor such as a credit union.

Is there pretty much no option but to try to carry on with normal full repayments with a credit union in order to avoid a CCJ?

No. You need to talk to the credit union, tell them the full extent of the problem and how much you have per month to pay towards all your debt. They may want more than pro rata, but hopefully will accept a much reduced payment. 

If they have a physical office, try an appointment and speak to them personally. And explain that if you lose your job, it will take a lot longer to repay the debt.

Don't expect a discounted settlement which you might get with a bank account.

Thanks for this advice, I'm going to speak with them tomorrow. I assume any agreement I reach with credit unions will just go down as an AP marker on my credit report rather than a default. 

auburnheart

Kauto5 said:

Hi @auburnheart Thank you for sharing your DMP journey on here, it's been really helpful and I hope everything is going well.

I am about to start a DMP and have a loan with the same credit union as you. How have they been with you, any different to other creditors? Have they defaulted your loan and been ok in agreeing lower repayments? I'm most nervous about my credit union loans as they sound like they're the strictest 

Hi @Kauto5
Currently they have defaulted me, starting paying less last August and defaulted me in January 2025, quickly following by a formal demand. They do want you to fill in an income and expenditure online to which I did (which mirrored my DMP details) and they accepted my repayments for 3 months. This ends the end of May 2025, therefore, will see how they are when I contact them at the end of this month. I've had to ring them a few times because emailing them is a massively backlog. I've tried sending letters but they just state they have them but not responded so ended up ringing them. 
I've been in a DMP about 10 years ago, and had a credit union on that DMP too (not the same one). They defaulted my account, and as I was with PayPlan the whole time, they accepted the repayments and that was it. So not sure about the strictest.

auburnheart

Hi All,
I've recently noticed that Sainsburys Bank (the only creditor I have that don't have any facility only to ring), have sent me a statement showing the full amount is now payable. I was under the impressions that I was on a payment plan (to which I spoke to them about and they said they accepted). I can see that they added interest to my statement prior to this one however, told me no interest and charges are applicable.
Anyway, I've noticed on my Clear Score report this morning, that a company called "TDX Group (for Sainsburys Bank)" has made a soft search on my credit report. I've googled them but it just says they're an Equifax company not directly involved with Sainsbury's Bank. Sainsbury's Bank is currently being taken over by NatWest Bank therefore is it something to do with this do you think?