Some advice on a DMP

Grumpelstiltskin

Stop thinking about court action, it isn't going to happen.

If they decide to go for a CCJ they have by law send you a Letter Before Action by snail mail.

That letter has a form attached that you have 30 days to complete and send back to the court,, at that point if it happens we can tell you how to proceed.

Then if they did win a CCJ it would be at an amount you can easily afford to pay.

The amount you owe them is to them a small amount, the chance of them trying to bankrupt you is virtually zero.

WibnleWobnle

Thank you so much. So I should take this as the default letter then? It’s confusing because I thought the default was the formal notice of default letter I got 3 weeks ago. I just googled formal demand and it read as statutory demand and I majorly panicked as that does not look good!! 

Grumpelstiltskin

Yes assume it has defaulted, they could now sell the debt on to a debt buying company, hang on and see if you hear anything from this company.

Whatever you do don't panic at any letter you receive ( and ignore anything you get by E Mail or text) If you do get a letter please open it and read it, if you don't understand it or you are not happy with what it says come straight back on here for advice.

sourcrates

WibnleWobnle said:

Can court action jump straight to bankruptcy tho? Surely they would try ccj or something first? That’s my fear is court action of any kind!! 

Please stop panicking over the most basic of collection letter`s, you will have to get a lot tougher than this if you want to deal with your creditors on an even keel.

No creditor will ever make you bankrupt for non essential consumer credit debt, your living in fantasyland with that notion, there is a massive difference between a "statutory demand" and a "formal demand".

A "statutory demand" is formal notice to pay your debts or face being made bankrupt.

A "formal demand" is absolutely nothing, but a simple demand for payment, something like "I demand you pay this bill now" no clout behind it at all.

You will NEVER receive a statutory demand for any consumer credit debt, unless your loan is secured, all other credit debt is non essential, and unsecured, you cannot be made bankrupt for it!!

And again, original creditors will not take legal action after you default, unless your debt is with certain credit unions, they nearly always engage a debt collector, or sell the debt to a 3rd party.

Its 3rd party debt purchasing companies that are the most litigious, but only if you ignore them for a long period of time, and, should you find yourself the subject of legal action, its a simple process, all done online and by post, you don`t actually go to court, and judgement granted to your creditor must be deemed affordable, so if you are one of the 12% of defaulted accounts that end up in court every year, you have nothing to worry about.

The other 88% never see legal action, so try and do your research, and get out of panic mode.

WibnleWobnle

Thank you so much, genuinely you people are amazing. 

What would be my next steps. Just looked back letters and the default for the loan was issued on 11th April and gave me till 14th may to pay and this is the follow up. Is this standard? I’m worried that by not responding to the default I’ve made things worse. Is this the point I contact step change and chase to set up my plan? 

sourcrates

This is the period you might want to term "the phoney war", its the time after default, but before your lender does anything with the debt.

A typical first choice would be to pass the account to someone like Moorcroft who will write to you asking you to set up a payment plan.

Or, they may want to cut their losses and sell the debt on, its anyone`s guess at this stage.

There is no rush to do anything here, you can`t pay the debt in full, so you simply wait until you are written to again, that`s it, nothing more you can do as yet.

WibnleWobnle

Ok thanks a mill. Agree I need to toughen up too, genuinely I was ok until I seen this then went googling. Found this on StepChange website and spiralled. 

In Scotland

The people you owe can make you bankrupt in Scotland if you owe them more than £3,000.

If you owe two or more people, they can 'club together' if the amounts you owe are under the £5,000 limit. This is rare.

Let's say you have two debts of £2,000. The people you owe can apply for your bankruptcy together, making your total debt over £3,000.

The people you owe can only petition for your bankruptcy if they can prove your ‘apparent insolvency’.

To do this they will send you one of the following documents:

• A charge for payment giving you 14 days to pay the debt, or
• A statutory demand giving you 21 days to pay the debt

Grumpelstiltskin

OK Stepchange have to tell you what could happen, but just because it could happen it doesn't mean it will happen.

Please stop getting worked up over things like that. I mean you could win the lottery tonight but just because you have bought a ticket it doesn't mean you are bound to win.

WibnleWobnle

Ok so this wasn’t a statutory demand! That’s cleared that up for me, thank you all so much. 

RAS

That's a good analogy, sourcrates.

The most powerful word in the debt collectors' dictionary is "may." We may take further action, this may lead to legal action, which may include...." That tiny word frightens the life out of people who are already worried, often alone, feeling guilt and shame.

I may, of course, get run over by a bus, really inherit millions from a distant relative or get a place on the next moonshot. A little word that suggests the almost impossible could really happen. 

None of us would take prescribed mediation if we read the contraindications leaflets the same way. There's a very small number of people who need to ask more questions first, and more who need to monitor their response, but almost everyone is OK taking the medication.