Questions about a DMP and £50k in debt

BasketballJumper90

Hey everyone, checking back in on my next steps if I could please.

I've received the attached letter from Lowell, a debt collection/purchaser, alongside a letter from Ikano saying that Lowell have purchased my Ikano debts because they've defaulted (that letter wouldn't upload for some reason). Today my Ikano debts have also shown as defaulted on my Equifax report, as Fixed Term Credit Sale, and will also be removed from my next report (according to Clearscore). The letter was dated Sept 30th but life has been hitting us hard, and the Clearscore notification this morning prodded me to post.

- Does this letter from Lowell effectively start the default clock again? IE should I wait for the Lowell account to default now (if that's even a thing?), giving me another few months to save for a settlement figure?

- or should I offer them a settlement figure now, or just set up a standing order of what I can afford?

- is it sensible to set up an online account for them, or is that overdoing it? It'd be useful to see how much we owe etc but I've held off for now.

- I've seen mention of strategies a fair bit here, are they detailed anywhere? I know there's the pinned post but it feels like it's not step by step enough for me unfortunately, so any pointers for step by step of "when you get a letter that says x do y" would be amazing, I work great with those!

I've also started getting notice of defaults from the other lenders, so feels like they're all coming to a head now.

TIA!

zedonk

Debts only default once, and being sold doesn't change that, so it's still defaulted even though it's with Lowell now. 

I'll leave the strategy stuff to the experts. 

ManyWays

Lowell will use the same default date that the lender did. (It's a good idea to check your credit record to see this has happened in a few months, but you dont need to wait to see this or anticipate problems here as they are pretty rare.)

You have quite a few options here and there isnt an easy way to decide which to do and in what order. Here is what I tend to think about, but some if it is personal preference:

1) ignore 
I dont suggest ignoring this. At this point, it is wishful thinking to hope the debt will become statute barred, its a lot too far off. If you hadn't paid anything to it for 5 years, things would be different

2) set up a monthly payment
I think this is a good idea, but make it as low as possible. So you can accumulate an emergency fund and a post to make settlement offers from

3) make an affordability complaint to Ikano
if you win, interest is removed so the balance will reduce.
If there is a lot of interest in the balance (a loan where the balance includes all the interest for the full length of the loan, a loan where you are a long way through so have already paid a lot of interest, a credit card or catalogue where you have paid a lot of interest) then this seems a good idea if you think the loan caused you difficulties from early on.
For a debt where you have paid little or no interest, there isnt much point.
And if the debt defaulted a long time ago (5+ years) you will find it hard to prove unaffordability. 

4) ask Lowell for the CCA agreement for the debt
Some people prefer not to do this now, hoping the debt will be sold on again, as each extra step in the chain makes it a bit less likely the CCA can be found, but it's my feeling this happens less than it used to.
Also, there is the possibility that the right to ask for the CCA may be removed or really watered down sometime in the next few years, so in general I prefer asking sooner rather than later.
If the account was opened a long time ago, the CCA is less likely to be found. I would ask straightaway for any card opened pre 2007 or any catalogue opened pre 2015

5) make a settlement offer
I would prefer to settle down and make low payments for a while and then ask for the CCA before making a settlement offer. Of course, if Lowell offers you an offer, you can counter with a lower one. 

So a strategy could look like - set up low monthly payments, make an affordability complaint, if that is rejected at the Ombudsman ask for the CCA.

RAS

You've not shared your SOA, so it's hard to comment in detail.

Regarding that letter, the important bit is probably immediate above the partially visible para on the right hand side at the top of the letter, referring you to their web-site. What does that say?

Beyond that, how much have you saved into your emergency fund, as a multiple of the essential spends in your monthly budget?

Have you encountered any spends that aren't in your SOA, like Christmas, visiting family, house repairs, clothes, holiday. If so, you need to divide that cost by 12 and add it to your monthly budget. Save that money into an instant access ISA.

And another for the emergency fund.

How much do you now owe and how much can you afford monthly with your revised SOA?