Looking for a little guidance to start my journey towards becoming debt-free.

tigergambit

Rob5342 said:

[Deleted User] said:

Rob5342 said:

Regarding bank accounts, Monzo and Starling are very good and have lots of good budgeting features. 

The op has three borrowings

Just to add that I had similar concerns when I started my DMP, but nothing that I was worried about happened. Four years down the line I hsve paid off a bit chunk, got some interest repayments from affordability complaints and also found that two loans are unenforceable. It really doesn't take very long to start feeling on top of things. 

@IRunFar I would echo what Rob says here. When this happens it is a scary, uncertain time and your natural reaction is to seek a solution which gives a 100% definite outcome. A DMP just doesn't work like that. Sometimes nothing will happen for months at a time, at other times you make rapid progress on many fronts simultaneously. But once you have your affordability complaints resolved and defaults you will have a clearer picture. This could well take 9 months or longer.

By February next year you should be able to save a 5-figure emergency fund, most of your debts should have interest stopped and you will have told creditors how much you are willing to pay monthly. So you will have in effect swapped your debt for an interest - free loan with a strong likelihood that you will be able to negotiate discounts later once they are sold on.

Sure, there will be the odd bump, but this is a long game and that is to your advantage as inflation will reduce the real value of your debt even further.

So stop paying, get your affordability complaints sent off, work on your SOAs (one for you and one to share with creditors) and sit back for a few months. It's frustrating but you can't force this. Nothing bad will happen so long as you play the game.

IRunFar

I just wanted to say a huge thank you to you all for your kindness, zero judgment, guidance and support. If you’ll forgive the pun, I’m indebted, and just so grateful 🙏 

IRunFar

Hey everyone - just popping back here for some advice re developments. We’ve done everything as advised to date - letters of complaints have been sent and some lenders have replied - all dismissing us completely! We’ve stopped payments and are getting regular messages about missed payments and opportunities to catch-up etc. All as expected I guess.

Today, Lendable wrote to say that they may send ‘representatives’ to our home which is alarming. Is it now time to write with our DMP offers etc? 

Would be super grateful as always for any guidance 🙏

Grumpelstiltskin

Don't worry about someone coming to your house. They are only door knockers, not bailiffs.

You don't have to answer the door to them, they are no different to double glazing salespeople.

They are trying to frighten you into paying, don't fall for it.

sourcrates

IRunFar said:

Today, Lendable wrote to say that they may send ‘representatives’ to our home which is alarming. Is it now time to write with our DMP offers etc? 

Would be super grateful as always for any guidance 

Best to wait until accounts default before doing anything, the default is the baseline, lenders can`t do diddly squat until a debt actually defaults, which is why they use other tactics such as the threat of doorstep knockers etc, its all designed to persuade you to get in touch to re-start payments.

If you take note, at this juncture, all they threaten is doorstep collectors, negative information on your credit file etc, they don`t threaten legal action, as that would be a breach of guidance, legal action can only be taken after a debt defaults and your agreement has ended.

If they have sent final responses, then escalate your complaints to the FOS, its free, so you might as well.

tigergambit

IRunFar said:

Hey everyone - just popping back here for some advice re developments. We’ve done everything as advised to date - letters of complaints have been sent and some lenders have replied - all dismissing us completely! We’ve stopped payments and are getting regular messages about missed payments and opportunities to catch-up etc. All as expected I guess.

Today, Lendable wrote to say that they may send ‘representatives’ to our home which is alarming. Is it now time to write with our DMP offers etc? 

Would be super grateful as always for any guidance 🙏

Hold fast! You are only two months in, things still have a very long way to go!

Escalate your complaints and keep building that fighting fund. Come back once you start getting defaults. In the unlikely event the "representatives" turn up just tell them to put it in writing and then you can ignore it.

RAS

Next door's kitty can "make a mess" in your garden. This representative can't even do that. 

Just make sure anyone who might be home knows and tells them to leave.

ManyWays

IRunFar said:

letters of complaints have been sent and some lenders have replied - all dismissing us completely! 

You have been lent much more than was sensible so send the rejections to the Ombudsman to get an independent view, not a lender hoping you will give up.

NeverendingDMP

Just popping on to say don't use your pension. You don't need to and you need that later on if your renting. The posters so far will give you excellent advice. But keep the pension intact whilst you decide. X

DankVielen

IRunFar said:

Hello,

I’ve been reading the advice on all the different threads about this, but there’s quite a bit to digest! So, I thought it might be best to ask a few questions about my own situation so I can create the best plan for me and mine. I currently have a little over £60k of unsecured debt caused (mostly) by some significant life changes. I'm now having a tough time keeping up with all the monthly payments, and the interest on some of the debts is just eyewatering. 

I'm fairly positive that by the end of this year, I'll be able to settle some, if not all, of my debts when I can access a lump-sum drawdown from my pension. I understand this isn't the ideal solution, but honestly, I can't think of any other options since I don't have any assets to speak of - I just rent my house. I don't plan to fully retire for a few years yet (I'm currently 54), and maybe I'm being delusional, but I wonder if once I've cleared my debts, I could begin to grow my retirement savings through investments, savings, or even extra contributions to my current pension pot. 

I'd be so, so grateful for any advice on the following:

Should I reach out to my creditors and explain my situation, maybe even propose some token payments for now?

Or would it be better to just default and wait it out until I can sort out a payment arrangement with any DCAs who may end up buying the debts? If I do this, should I still let my creditors know I can't pay?

Do I have to tackle all the debts at once, or can I just focus on the larger, more expensive ones and keep making my contractual payments on the smaller ones? Will this outrage any of the lenders (who are Evlo Loans, Plata, Monzo Loans, Monzo Flex, Zable, Aqua and Capital One). 

A wee bit more context - I have a son who is about to start University, which has been on my mind a lot. I really want to support him in staying debt-free if I can. Finally, my credit rating is already shocking, so I suppose whatever I do next can't make it any worse, right? 

Thank you all so much for taking the time to read this. It's comforting to know you're out there!

NEVER NEVER contact any of them to explain, information is power and gives them reasons to not give up on insane debt and interest.

If you want to DMP then Self Manage and if they don't come up with solid 60% discount then wait out for the debt to become Statute Barred.

If you want to speed things up then write an unequivocal letter saying that you will not be making any further payments to the account due to a massive change in circumstances that you can't envisage improving in the foreseeable future.  Send this for each debt account, even if you have two accounts with one company. After that DO NOT ENGAGE and just wait it out.  Follow the steps I outline in the post below

https://forums.moneysavingexpert.com/discussion/comment/81517246#Comment_81517246

I have a strict Do Not Engage policy, if you follow the steps on the link about you will not get phone calls or emails, just snail mail which you will file as prescribed in the post at the link above.