Starting a DMP WITH SC, advice

Gewakefie

Hi everyone hope everyone is doing well. 

I have come into some bother this past year, I broke my hip and my mental health suffered as I am quite young, I also had a gambling relapse which added to my debt but luckily I asked for help and blocked myself from everything before it got way out of control. I also got scammed buying a car privately which added to my problems so not a great year for me. 

Now that I’ve stopped feeling sorry for myself my debt is just under 22k I can’t afford the minimum payments anymore (well I could but I would literally have nothing left each month) so I’ve decided to do a dmp with stepchange to my regret and I worked out I will have about 300 a month left after everything to pay to it so should take me about 6 years to clear. I had a couple of questions if someone would be kind enough to help

My understanding is that it’s better to default first now I’ve never done this before so it’s quite scary but how long can you default for until you get in trouble? Like I was going to save up an emergency fund while doing this but don’t want to get to a point where I’ve done it for too long. 

I had a payment plan already with Lowell and salary finance for old debt and I’ve cancelled those direct debits, I called Lowell and they put my account on hold for 2 months but I haven’t contacted salary finance just stopped dd but I’m guessing that’s already been defaulted a couple of years ago when I started making smaller payments towards the loan trouble is I use credit karma and can’t find anywhere to see what’s already defaulted and what hasn’t 

my Monzo loan and flex I messaged them and they have stopped payments for 2 months, Monzo is my main account and I wanted to continue using it, but after reading here people advise against it. There’s no overdraft and I messaged them asking if I carry on using it as my main account can they promise not to offset, they are yet to get back to me and I also have an irresponsible lending complain with them still waiting to hear back. My friend who has a dmp with stepchange still uses her Monzo to get paid into and does have any problems the dmp payments towards her loan overdraft and flex just show as “suspense payment” 

and lastly if I do come into any money from family or anything later down the line, if I make settlement offers do I go through stepchange? Or to the company direct because surely if I pay one off but not another it would jeopardise the dmp - but that’s a way away even if it happens. And if the debt is sold at any stage will stepchange know this or would I need to tell them, also if the debt is sold before I start the dmp do I tell stepchange the original debtor or who it’s been sold to in the section where I declare the debts.

any help would be appreciated and thank you in advance, bad times 

RAS

If you want to repair your credit record as quickly as possible, you cancel all payments without engaging with your creditors. They are likely to response to communication by adding AP markers to your credit record and delay the default. 

They are trying to be helpful but AP markers damage your credit record for 6 years after the debt is paid off. Defaults are removed from your credit record after 6 ears regardless of whether the debt is fully paid or not. 

Fortunately defaults overwrite AP markers but yours may take longer to be registered. 

Can understand why you like Monzo, but you'd be wise to just get a new basic bank, these don't require credit checks. Two may be better as you can transfer money for annual costs to one so it's not sitting in the main account. And an Instant ISA for the emergency fund.

You won't get into trouble. Creditors can't take any action until the default is issued and legal action costs money that is a waste if you set payments soon after the default is issued.

Gewakefie

RAS said:

If you want to repair your credit record as quickly as possible, you cancel all payments without engaging with your creditors. They are likely to response to communication by adding AP markers to your credit record and delay the default. 

Okay thanks so much!

They are trying to be helpful but AP markers damage your credit record for 6 years after the debt is paid off. Defaults are removed from your credit record after 6 ears regardless of whether the debt is fully paid or not. 

Fortunately defaults overwrite AP markers but yours may take longer to be registered. 

Can understand why you like Monzo, but you'd be wise to just get a new basic bank, these don't require credit checks. Two may be better as you can transfer money for annual costs to one so it's not sitting in the main account. And an Instant ISA for the emergency fund.

You won't get into trouble. Creditors can't take any action until the default is issued and legal action costs money that is a waste if you set payments soon after the default is issued.

Ok thanks so much ! 

Rob5342

You will need to tell Stepchange who own the debt when you start the plan. They should know if the debt gets sold, and actually when one of mine was I saw it had changed hands in my Stepchange account before I had any letters about it, but keep an eye on it and make sure they update their records.

When it comes to settlement offers don't involved Stepchange as they will want to split whatever you have avaialble proportionally between all your creditors. If you approach them yourselves you could use that same money to completely clear some of them at a much reduced rate.

Gewakefie

Rob5342 said:

You will need to tell Stepchange who own the debt when you start the plan. They should know if the debt gets sold, and actually when one of mine was I saw it had changed hands in my Stepchange account before I had any letters about it, but keep an eye on it and make sure they update their records.

When it comes to settlement offers don't involved Stepchange as they will want to split whatever you have avaialble proportionally between all your creditors. If you approach them yourselves you could use that same money to completely clear some of them at a much reduced rate.

But then wouldn’t stepchange know about it and get funny if I settled something but not other? If that makes sense haha

Rob5342

Gewakefie said:

Rob5342 said:

You will need to tell Stepchange who own the debt when you start the plan. They should know if the debt gets sold, and actually when one of mine was I saw it had changed hands in my Stepchange account before I had any letters about it, but keep an eye on it and make sure they update their records.

When it comes to settlement offers don't involved Stepchange as they will want to split whatever you have avaialble proportionally between all your creditors. If you approach them yourselves you could use that same money to completely clear some of them at a much reduced rate.

But then wouldn’t stepchange know about it and get funny if I settled something but not other? If that makes sense haha

I don't know if they'd care really. I took one of mine off my plan as id won an affordability complaint without going a reason and they didn't question why. If they do then by that point you'd be confident enough to manage things yourself.

First things first though, that's quite a way down the line. For now stop paying and get those nice defaults. 

Gewakefie

Rob5342 said:

Gewakefie said:

Rob5342 said:

You will need to tell Stepchange who own the debt when you start the plan. They should know if the debt gets sold, and actually when one of mine was I saw it had changed hands in my Stepchange account before I had any letters about it, but keep an eye on it and make sure they update their records.

When it comes to settlement offers don't involved Stepchange as they will want to split whatever you have avaialble proportionally between all your creditors. If you approach them yourselves you could use that same money to completely clear some of them at a much reduced rate.

But then wouldn’t stepchange know about it and get funny if I settled something but not other? If that makes sense haha

I don't know if they'd care really. I took one of mine off my plan as id won an affordability complaint without going a reason and they didn't question why. If they do then by that point you'd be confident enough to manage things yourself.

First things first though, that's quite a way down the line. For now stop paying and get those nice defaults. 

Rob5342 said:

Gewakefie said:

Rob5342 said:

You will need to tell Stepchange who own the debt when you start the plan. They should know if the debt gets sold, and actually when one of mine was I saw it had changed hands in my Stepchange account before I had any letters about it, but keep an eye on it and make sure they update their records.

When it comes to settlement offers don't involved Stepchange as they will want to split whatever you have avaialble proportionally between all your creditors. If you approach them yourselves you could use that same money to completely clear some of them at a much reduced rate.

But then wouldn’t stepchange know about it and get funny if I settled something but not other? If that makes sense haha

I don't know if they'd care really. I took one of mine off my plan as id won an affordability complaint without going a reason and they didn't question why. If they do then by that point you'd be confident enough to manage things yourself.

First things first though, that's quite a way down the line. For now stop paying and get those nice defaults. 

Nice defaults haha 

the other problem I have is that Monzo have froze my loan and flex payments for 2 months and they have messaged me to confirm I can keep using it as my main bank and they won’t offset the debt while I’m on a dmp

problem is is I’m not gonna pay for like 6 months to get my emergency fund what are Monzo going to do because in the message they said my breathing space ends on the 16th of July and they are hoping to hear from stepchange by then in regards to my dmp 

so I guess my question is with stepchange can you chose when the dmp starts so could I sign up for it today and chose to start payments in say October? Or does it not work like that 

I think I’m going to have to change the bank I get paid into and hope that Monzo don’t shut my account down for a few months as I would like to keep using it as my main account

silly oroblem I know but I have ocd too and just like the way Monzo works but oh well 

Gewakefie

Ok I found it but my salary finance loan isn’t showing as defaulted it’s from 2022 payments were 290 a month but I won unaffordable lending case and was now paying £50 a month I guess they never defaulted it? Cos doesn’t show as default

my Lowell debt isn’t even on my credit report all very confusing as that’s £2100

ManyWays

my salary finance loan isn’t showing as defaulted it’s from 2022 payments were 290 a month but I won unaffordable lending case and was now paying £50 a month I guess they never defaulted it? Cos doesn’t show as default
Is it showing with a payment arrangement or just as though its being paid normally and up to date?

My Lowell debt isn’t even on my credit report all very confusing as that’s £2100
Could that have defaulted over 6 years ago, what sort of debt was it?

Gewakefie

ManyWays said:

my salary finance loan isn’t showing as defaulted it’s from 2022 payments were 290 a month but I won unaffordable lending case and was now paying £50 a month I guess they never defaulted it? Cos doesn’t show as default
Is it showing with a payment arrangement or just as though its being paid normally and up to date?

My Lowell debt isn’t even on my credit report all very confusing as that’s £2100
Could that have defaulted over 6 years ago, what sort of debt was it?

ManyWays said:

my salary finance loan isn’t showing as defaulted it’s from 2022 payments were 290 a month but I won unaffordable lending case and was now paying £50 a month I guess they never defaulted it? Cos doesn’t show as default
Is it showing with a payment arrangement or just as though its being paid normally and up to date?

My Lowell debt isn’t even on my credit report all very confusing as that’s £2100
Could that have defaulted over 6 years ago, what sort of debt was it?

ManyWays said:

my salary finance loan isn’t showing as defaulted it’s from 2022 payments were 290 a month but I won unaffordable lending case and was now paying £50 a month I guess they never defaulted it? Cos doesn’t show as default
Is it showing with a payment arrangement or just as though its being paid normally and up to date?

My Lowell debt isn’t even on my credit report all very confusing as that’s £2100
Could that have defaulted over 6 years ago, what sort of debt was it?

Yea your right about Lowell thank you 

and salary finance I’m not sure just shows a calendar and ticks but doesn’t actually say if it’s AP or anything but never mind that one is what it is I suppose it’s the 6 new ones I need to keep an eye out for 

ManyWays

OK, what sort of debt was the old Lowell debt - loan, card, overdraft, mobile or what?