Debt Advice - What is the process when defaulting and setting up a DMP?

Deeeirdre

sourcrates said:

Self managed debt management, easy peasy.

In a nutshell:

(1) wait for debts to default, in the meantime save an emergency fund.
(2) once defaulted, debts may be sold/assigned, whoever picks them up will write to you, most likely be some sort of debt collector, so you go to their respective website, and start making payments on a monthly basis.

No need to speak to anyone, share anything, send anything, its that simple.

Thanks for this, it is a relief to know this process. I still don't quite understand when or if I set up a DMP during the process - can I set this up once the accounts default? But they won't all default at the same time..

Deeeirdre

Scarlet_to_Black said:

RAS said:

ManyWays mentioned Payplan.

Have you considered DIY? Lots of folk here do it, although I'm not sure how many have functioning businesses alongside.

Talk to business debt line about your situation, business covering itself presumably, but consumer debts?

Do you have any joint accounts with your partner because that's going to be an issue. You default, and it affects your partner's credit record. Could you separate by each receiving one property's rent? And then settling up? You'd need some legal agreement.

Re booze, what support can you get? Alcoholics Anon is not for everyone but you may need support. 

Meantime, hope life improves.

Just regards the giving up booze…I’ve just done this and I’m 116 days into my new sober life. Absolutely the best thing I could have done for myself. 

I joined a Facebook group not expecting much by a guy called Jason Currill and his programme, ‘Shrink the Drink’. It’s 30 days and cost me £20, but this is a one off payment and you have access to the resource for life. The FB group is ‘Life’s Better Without Alcohol’. 

I’ve gone from a bottle of red wine a night and more sometimes, particularly at weekends (which often started on Wednesday 🫣🤷‍♀️) to going full on teetotal. You would not believe the changes to your outlook and functioning that happen when you give up the poison 🙏

Thank you so much for your response and huge respect to you for sharing help and for coming so far on your similar journey :-)

I recently managed to quit for around 60 days, the longest I had been without booze for many years and I felt amazing! My problem is that I start feeling over-confident and thinking I can handle it again but I simply cannot. It only took one drink to fall straight back into my old ways :-(

I am thinking that I need a fundamental overhaul of my life, not just my finances! Money comes and goes, looking after your health and well-being is far more important than money. I guess it is all linked though, somewhat.

I am so glad that you are feeling better, it is very inspiring and thanks so much for sending the contact info for help (for a group that really did help you!) - this means alot, as I am a bit averse to certain types of help.

RAS

DMPs set up by providers like to have a list of the debts, a single payment in and then they apportion the money to the creditors. So it all gets set up at the same time, which is why their clients get AP markers.

Going DIY, you start saving for your emergency fund waiting for the debts to default. When one defaults the provider may keep the debt in house, may assign to a debt collector or may sell on the debt. Generally debts are sold or assigned in batches, so it may take a couple of months for you to be told what's happening and who to pay. The letter usually has the account reference and payment codes, so you just log in and pay what you want. You can then use the details to set up SOs to make future payments.

I could take 18 months for some to default.

If your emergency saving aren't enough, then you need to keep saving and only allocate part of your excess to payments in the first instance. So definitely a boiler replacement and a month's mortgage if your tenant defaults. 

I'd suggest you review the BTLs and make sure you're completely on top of the paperwork and are charging a market rent.

Deeeirdre

Deeeirdre said:

sourcrates said:

Self managed debt management, easy peasy.

In a nutshell:

(1) wait for debts to default, in the meantime save an emergency fund.
(2) once defaulted, debts may be sold/assigned, whoever picks them up will write to you, most likely be some sort of debt collector, so you go to their respective website, and start making payments on a monthly basis.

No need to speak to anyone, share anything, send anything, its that simple.

Thanks for this, it is a relief to know this process. I still don't quite understand when or if I set up a DMP during the process - can I set this up once the accounts default? But they won't all default at the same time..

aaar, scrap my message! No need for a DMP in this scenario - thanks for advice

Deeeirdre

ManyWays said:

A BTL that is not generating a healthy profit and when you do not have any cash reserve to cover missed rent periods or work that needs doing on the property is an accident waiting to happen. 

A very good point, but my partner doesn't want to sell and the primary Buy to Let (my Right to Buy Property) is the home I grew up in, so it has sentimental value as well - my Mum passed away in that property, so it is complicated..

ManyWays

Property often is.

When do the fixes end on the two BTL mortgages? When we assure people here that a DMP (or a DIY version of one) wont stop them getting a new fix with their current lender, I have no idea if that applies to BTL mortgages. .