Some advice on a DMP

DeterminedtoChange86

Hi All, 

I have been researching potentially going on to a self managed DMP for a few weeks, reading threads etc. I am utterly ashamed and embarrassed about my situation. I flip between feeling like a DMP and trying to chip away at my debt. Realistically though, I know the latter is probably not possible. It has been crippling me with anxiety for the past few months so I need to take action. 

sourcrates

Never bank where you have debts, most important rule number one.

Main stream credit card companies just follow usual collection activity, default/then to debt collection.

Unsure of Zopa`s status currently.

fatbelly

I don't think debt juggling is going to be any use if you only have £300 available to service 47k of debt.

Cancel d/ds, walk away from the RBS account and just use Monzo/Starling for your income and essential d/ds

Affordability complaints are a good thing to do while waiting for defaults. Not sure where we stand with Zopa, though. Will check in a minute

We'll have a look at that soa when it comes. As a homeowner you are probably looking at dmp/IVA. An IVA might have the advantage, and the rules are changing in July.


Edit. No problem with Zopa. Make a complaint in the usual way

https://debtcamel.co.uk/refunds-large-high-cost-loans/

sourcrates

fatbelly said:. As a homeowner you are probably looking at dmp/IVA. An IVA might have the advantage, and the rules are changing in July.

Just been reading up on the IVA changes for 2025, much better framework in my opinion, what do you think?

I particularly like this section:

33) If the breach occurred prior to the first payment to creditors, a statement should be placed on file as to whether the protocol IVA was the right solution by the Supervisor, having reviewed the case in full.

If it is deemed that the protocol IVA was not the most suitable debt solution for the consumer or there is evidence to suggest that such a breach was likely, any payments made by the consumer should be refunded and the protocol IVA terminated.

ManyWays

Zopa hasnt done peer to peer lending for several years and it's trying to turn itself into a real bank now with current accounts. I would treat them the same as any other lender, not try to borrow more to switch that money to a card. As @fatbelly says look at affordability complaints against them to get that interest removed. And also look at affordability complaints against any loans or cards you cleared with the large Zopa loan. 

ManyWays

There is NO point in the switch you are proposing to try to reduce the Zopa loan and it will cost you the transfer fees.

13thlegion

I agree with the others. No point shuffling balances around.

You said your RBS account is being switched. Do not use the automatic switching service. You want a clean break to the new bank account free from any connection to creditors and to manually move over direct debits for essential bills only.

sourcrates

DiamonBoy said:

Thanks all, I should have noted that I am in Scotland so another reason the IVA changes won’t help me. 

I’ve put an affordability claim in to Zopa yesterday. I guess it’s just taking the plunge and cancelling all the debt payments. I’ve flipped by feeling really positive about this to being super low about it. 

The Zopa loan is causing me the most stress, I’m terrified that because of the size they will go legal very quickly. 

It’s so mentally taxing, I feel sick every minute of every day. 

This should not be stressful at all, its a very simple process to get accounts defaulted and all interest stopped.

The amount of the Zopa loan may seem a lot to you, but to them its just numbers on a computer, the money never existed in the first place, that`s how fractional banking works, and looking on their website it appears their debt collection process is pretty much the same as any other lending institution in the UK, this is why debt collectors exist.

Even if they take you to court, which is unlikely, if you can live with a CCJ on your file (or a decree in Scotland) then what is there to worry about, you`d repay the debt at an affordable rate the court sets, according to your budget, if a judgement won`t harm your employment situation, then I don`t see what there is to be down about, its just another process to go through.

Its just money, and the mechanisms exist to deal with the repayment of the debts, try not to pay it all so much attention.

WibnleWobnle

Similar situ and have let everything default. Just had a formal demand for an rbs loan saying:

You've not fully repaid your arrears and the full loan amount now needs to be paid and asking me to pay in full

what do I do now? StepChange? Does this mean they are going to take me to court? 

Reads like this:

What if you don't pay your loan in full?

• we may start legal action, which means a county court judgment (known as a decree in Scotland) could be registered against you

• if you have money in other accounts in your name with us, we may use this to reduce the debt you owe us

• we may sell your account to a debt purchaser, or use a debt collection agency or solicitor to help get back the money you owe

• we need to tell credit reference agencies about any missed payments, also known as arrears. Having missed payments could have severe consequences on your finances which could make it harder for you to get credit in the future. Your arrears details will be sent to:

- TransUnion Information Group Limited

- Equifax Limited

- Experian Limited

Rob5342

That's standard wording for a default notice. In all likelihood it will just get passed to a debt collector and you can pay them whatever is affordable. Legal action is possible, but its usually a last resort way down the line when all other attempts have failed. As Sourcrates says even if it was taken youd still just be repaying it an affordable rate anyway. 

WibnleWobnle

Should add I’m in the process of setting dmp now with step change. Loan is for £17k. Have I let this go to far now and are they going to try make me bankrupt? Said I have until 24th may to pay. Shaking with fear and feel sick to my stomach.