Self managed DMP help

Woolywelsh

Hello everyone. I understand this topic comes up over and over again but I would really appreciate your time to just clarify a few things, just to make sure I do things in the correct manner and to not dig myself a deeper hole. iv been reading a lot on here so I think I have everything I need possibly.

I have debt of around £40000 and Soon I will be stopping my payments on 3 credit cards and 2 loans. I just want to make sure the steps Im taking are correct and any other information would be appreciated.

1 - Stop payments and build up a emergency fund, preferably into a good savings account.

2 - Wait for each account to default (the time will vary on each account) but as they do, I  can offer them a payment that is affordable to me?

 3 - keep paying what I agreed until it's paid off or I decide to accept a settlement offer.

Is it as simple as that?

I know things won't run as smooth and will possibly face challenges, like the ccj threat.

Few questions if you could answer please 

How do I offer my payment once they default? Or do I not offer and just tell them!

If a ccj warning letter is received. What are the next steps?

Do I need to send creditors any budget information? 

What happens if they refuse my offer of payment?

What's the best strategy to divide payments and what amount is likely to get accepted? Roughly have around £300pm to pay towards debts.

£15000 loan

£8000 credit card

£6500 loan

£2200 credit card

£8500 credit card

My target is 5 years (I know £300 doesn't equate to that) I get yearly bonus in work which I'll be paying towards and possibly increasing my payments at some point.

I'm just trying to cover most scenarios in my head. And I appreciate your time.

ManyWays

£300 may be realistic, easy or way too much, its good if you can post a Statement Of Affairs https://www.stoozing.com/soa.php here and also give the names of your creditors in that.

sourcrates

Legal action cannot commence until a debt has defaulted.

That`s not to say legal action is a first response from lenders, as it isn`t, you are only likely to see it much further down the line, and only if you ignore all attempts to contact you, if you are making regular affordable payments to your debts, it just won`t happen.

After your accounts default, you will be written too, as not many original creditors manage bad debts, they either sell them, or assign them to collectors, so wait for a letter asking you for money.

You pay what is affordable according to your disposable income, no you don`t have to share anything with anyone, this is a free country, at present anyway, we can do as we like as long as its legal.

They may not be happy with what you propose to pay, but if that`s all you can afford, then that is all they get.

If they remain unhappy, they will simply sell the debt to someone else, and you then pay whoever writes to you, simple as that, there is no "refusing offers of payment".

You divide your payments how you see fit, either pro-rata or a certain % to certain debts, its up to you what you do, you are in charge here.

One more thing, the world of debt collection moves very slowly indeed, don`t expect things to happen quickly.

Woolywelsh

Thank you for the quick response. It's just a nervous time but I need this to finally gain some control.
I take it there is no time limit to clear the dmp. I'm ok to go at my own pace and take it year by year. What I mean is if I say get to 8 years in and the faults are cleared of credit score. That's ok? As long as I'm still paying towards them.

So after they default whoever owns the debt will write asking for money. Then I reply to that. 

Am I right in saying I stay quiet until the defaults come through and my first point of contact is to make my payments? Unless anything else comes up where I need to act?

sourcrates

Yes, that`s about it, try to relax, this is a process that only merits background attention in your life, it should not become your main focus, its only bill paying after all, nothing special ok.

You have to keep in mind it may be a long process, debt management is an informal way to repay your debts, and it takes as long as it takes, most lenders follow very similar collection strategies, which is, send a series of collection letters/phone calls/texts etc, eventually get default notice, debt will either be sold or assigned to a collector.

You will be written to in any event.

If your happy with your budget and strategy, then fine, or you can post your SOA, and we may be able to suggest other options or where you can cut back on your spending etc.

Up to you.

Woolywelsh

I'm confident in my budget and spending but I appreciate the offer.
Iv been reading a lot over a few weeks and a feel confident going forward. 
You have also put me at ease so thank you.
If I'm stuck along my journey I'll be sure to come here for advice. 

I think the worry is me messing this up and ending up even more in debt but now I know that can not happen.

If you have anymore advice I'd appreciate it. If not then thank you so much.

sourcrates

Sure, best thing to keep in mind is that you are dealing with an automated system, geared up to shoot out letters/phone calls/texts etc at various times and intervals, your not dealing with actual people, just a computer.

So don`t overthink things, don`t take things on a personal level, its just business, and should be dealt with on a business basis.

Don`t panic at every letter you get, they are specifically designed to instil doubt and get you to call them, if there is anything you are unsure off, come back to this thread and ask.

Woolywelsh

Great advice and I feel more relaxed now. Appreciated. 
Hopefully it's smooth sailing but I know you guys are here if I need anything. 👍

RAS

The debt collectors favourite word is "may". Designed to put the wind up you because something may happen, although only if A, B and C, and the chance of each is minimal so them lining up is 1:1000 or less.

They can no longer threaten these actions they can't really take but they like suggesting it's possible. Like me climbing Everest.

Woolywelsh

What type of settlement offers have people had further down the line? 

ManyWays

It all depends on which debt collector the debt is sold to, also do you have a house with equity?