Starting a self managed DMP

pathtodebtfree

So after browsing the forum for months and finding myself in a terrible cycle of just about meeting minimum payments but then using credit again just to live, I have bit the bullet and decided to sort my life out 🤯. I get paid tomorrow so have cancelled a few direct debits and will not pay my usual unsecured debts. So am I right in thinking I just wait now for official letters? Avoid all contact? When I do get default letters how do I contact them and so I just stay firm and say I will pay you such and such? I would like to be able to do it over 7 years do just tell them that?

RAS

First thing is do you owe anything to the bank and wider banking group to whom you owe money? If so you need a new basic bank account (no credit check) or something like Monzo or Starling.

You also need an SOA so that you know what bills you need to pay each month and how much you need to put aside each month to cover annual costs like holidays, present, car maintenance, insurance. Only then will you know how much you have spare towards your debts.

Over the next few months that money goes into a separate account so you build an emergency fund because you won't have access to credit. If you rent, enough to pay the deposit and first month on a new rental, plus moving costs. If you have a mortgage, enough for a major repair or a couple of months if you lose a job. More if you do not have employer support for ill-health or lost employment.

Once the credit issues a default, you start making a reduced payment to the creditor concerned. You'll know how much "spare" is as a percentage of the minimums and generally that's the maximum percentage you pay. It may be wise to pay a little less until you've lived with your SOA for a year or so.

Starfish75789

When I did this last year - make sure you have no debts where you bank. I received a lot of letters, calls etc even default letters however...Until the default is on your credit record I didn't pay anything.

Keep checking the free credit reports and once it appeared on there this is when I wrote them a letter which was quite basic. It said i'm going to pay this amount on this date by standing order. Simple. Ive found the less I put and to the point the less questions they have. 
Ive had a couple ask for a statement of affairs and I have sent them, I have two versions one public view and my own. The one I sent matches the payments being made....but you don't have to. I just found it easier and they stopped chasing me.
Just make sure you have left enough....don't over commit. My DMP is for over 20 years, and I've had no issues/objections setting this up. My plan is to get final settlements and save in the meantime. 

pathtodebtfree

Great thankyou for the the advice. I bank with Halifax and luckily have no products with them but do also have a bank account with HSBC to whom I owe a loan and plan on defaulting this, have nothing else coming out of this bank though so that should be fine. I'm sure I will be back once the letters start coming through 🫣. I must admit my anxiety is through the roof about this bit, iv always paid my bills on time, this feels so unlike me but i just couldn't continue as I was 😪. Hoping the anxiety will get less once I'm in a bit more control.

RAS

If the HSBC bank account is up to date, close it. Otherwise it's just another debt.

Halifax are part of the Lloyds Group and took over the Bank of Scotland.