Questions about a DMP and £50k in debt

BasketballJumper90

Yes we have a CAB near us, I didn't realise they could help with that. I hadn't really considered that I'm eligible for PIP as well as my wife probably, and then my son (8) is eligible for Disability Living Allowance too. Thank you for that, I'll give them a call.

Naomim

Have a look on Twitter for Adam @autcareandshare He is an autistic parent with an adult autistic son. He started just giving helpful insights to what works for him & Ryan but is now fully employed working on EHCP and PIP. He is very generous with his time and support to people who need help, particularly checking forms. 

BasketballJumper90

Hi, a few more questions if anyone can spare the time please.

I've been told by my GP I have moderately severe depression which I'm trying to get under control, how can that factor in to debt management? In short it feels too much to self manage a dmp alongside everything else going on in our lives (you don't need my life story) but I'm concerned that if I let step change do it we won't be able to save enough for other things, and only my IKEA loans have defaulted so far. Can I tell step change to manage the dmp but wait for the rest of the defaults, or do I really have to let them all default first? I don't want arrangements to pay, which I think is what step change would do if I let them manage now?

As I said only IKEA has defaulted and is now managed by Lowell, I've started paying about £8 total via standing order (based on pro rata of my total available £210 and 53k total debt). I haven't told them my plan of what I'm paying, do I need to? Ive looked at the CAB self managed DMP and see a template on there to send, do I have to send that or not, ie can I just pay the SOs with no notification? I probably could have done that by now in typing all this out, but Lowell don't make it easy to tell them what my payment plan is unless I set up a direct debit which I don't want to do.

Also Westcot have started managing HSBC and Barclaycard debts but they haven't defaulted. I see from other posts I shouldn't engage until they default (per my plan) but they've sent me a text about a portal. I admit I'm curious about signing up, but as they haven't defaulted should I ignore signing up to that and just wait for defaults?

ManyWays

You cant ask Stepchange to start with one debts and then add more as they default.

Most debts in a DMP do eventually default (and if they dont you can complain to the lender that a default should have been added).

It isnt even certain that defaults happen much later in a DMP, certainly if you have mental health problems you may find a Stepchange DMP less stressful. You sidestep all the nedd to talk to the creditors at all.  There is a very uncertain trade off here, your mental health against the possibility of slightly earlier defaults. It is very easy for people here to say you are worrying unneccessarily and nothing bad will happen, just the uncertainty can be very stressful. 

sourcrates

Point of note, Lowell are a major debt purchasing company, and is split into three main arms:

• Lowell Portfolio I Ltd – this company buys and owns debts. (no longer FCA authorised)
• Lowell Financial Ltd – this company manages and collects those debts from customers. (This part of Lowell is still authorised and regulated by the FCA.)
• Overdales Legal Ltd – their in-house solicitors who deal with court action if debts aren’t repaid.

BasketballJumper90

ManyWays said:

You cant ask Stepchange to start with one debts and then add more as they default.

Most debts in a DMP do eventually default (and if they dont you can complain to the lender that a default should have been added).

It isnt even certain that defaults happen much later in a DMP, certainly if you have mental health problems you may find a Stepchange DMP less stressful. You sidestep all the nedd to talk to the creditors at all.  There is a very uncertain trade off here, your mental health against the possibility of slightly earlier defaults. It is very easy for people here to say you are worrying unneccessarily and nothing bad will happen, just the uncertainty can be very stressful. 

I think this is a key bit, we have so much other stuff going on that I'd like to just not have to deal with this so directly if I can, but also we really really need the safety net of emergency funds etc and the whole only being able to put £25 a month aside was putting me off. But at this point I'm beyond the point of caring and just need a win, you're right that it's easy for people to say when they're not in my shoes but if I have one less thing to deal with then that's incredibly appealing. We have savings like I mentioned above now but need to use some of it for house/car repairs as I mentioned before. 

And if the debts might default just slightly later, well then that's seriously worth considering.

sourcrates said:

Point of note, Lowell are a major debt purchasing company, and is split into three main arms:

• Lowell Portfolio I Ltd – this company buys and owns debts. (no longer FCA authorised)
• Lowell Financial Ltd – this company manages and collects those debts from customers. (This part of Lowell is still authorised and regulated by the FCA.)
• Overdales Legal Ltd – their in-house solicitors who deal with court action if debts aren’t repaid.

Thank you. Do I need to do anything with this info? I've only noticed that the standing order info is payable to Portfolio per the instruction letters and their website, so if it's not FCA authorised is that ok?

Rob5342

As Manyways says it's a trade off between your mental health and the length of time your credit report is harmed for. I started off using Stepchange and found that lenders take different approaches with defaults. BarclayCard were brilliant and defaulted after three months and backdated the default to the date when they first heard from Stepchamge, Virgin were extremely difficult and didn't default until two years after I started with Stepchamge, even though I'd stopped paying completely for over a year to try and speed up the default. You can give Stepchange whatever figures you want, it was only my income that they checked when I was with them. If you want to save a bit more than just say your travel expenses are higher than they are or something.

They should all default eventually and will probably be sold on at which point you can ask for the cca (if they can't produce it then the debt can't be enforced and you can simply ignore it). Once sold on the purchaser will be open to settlement offers and at any point you are able to make an affordability complaint, both of which could reduce the dmp term. You could let Stepchange handle the dmp initially and then come back to these things later when you feel more confident about it. 

Not defaulting now probably will extend the damage to your credit report but will also mprove your mental health. Either way you'll still have three other avenues to explore for speeding up the dmp. 

sourcrates

BasketballJumper90 said:

sourcrates said:

Point of note, Lowell are a major debt purchasing company, and is split into three main arms:

• Lowell Portfolio I Ltd – this company buys and owns debts. (no longer FCA authorised)
• Lowell Financial Ltd – this company manages and collects those debts from customers. (This part of Lowell is still authorised and regulated by the FCA.)
• Overdales Legal Ltd – their in-house solicitors who deal with court action if debts aren’t repaid.

Thank you. Do I need to do anything with this info? I've only noticed that the standing order info is payable to Portfolio per the instruction letters and their website, so if it's not FCA authorised is that ok?

If you want to make them work for their money you could stop paying them and issue them a written complaint as a concerned customer that the company you are paying is no longer authorised by the FCA to collect payments.

It would mean having to pay Lowell instead, but you never know where these complaints may lead, you may get some compensation, if you ask, you might get a balance reduction, I don`t know, they may take a commercial decision and write the debt off, OK, maybe not a write off, but for the cost of a stamp it might be beneficial to you to find out.

BasketballJumper90

I've had a default letter through from Barclaycard but not from HSBC, but the HSBC default was added to my credit report on 31/10. Is that normal? As I mentioned earlier they both handed over to Westcot to manage at roughly the same time and they're sending me letters for both debts, it just seems weird HSBC haven't actually notified of the default.

sourcrates

Sometimes the default notice, for one reason or another, does not get sent, or gets sent late.

The guidelines on defaulting are not always adhered too or acted upon according to the rules, there has always been inconsistency in this area, one reason why when your debt is sold you should ask for a copy of the default notice, and a copy of the notice of assignment, these two documents should be presented as evidence the sale has taken place.

For reasons known only unto them, copies of default notices seem to be unavailable in the majority of cases.