Self- Management DMP- Help

fatbelly

You need to work out how much surplus income you have, say £400 pm. Don't make your budget too tight

Then divide the surplus pro-rata amongst your creditors.

For example a 7k debt out of 97k total would get 7/97 x 400

There is a calculator and sample letters here

https://nedcab.cabmoney.org.uk/remedy_4.asp

loconnor89

Can anyone help, with an official link for a website for where is explains about defaulting first so it comes of the credit file in 6yrs instead to waiting until the final payment is made??

another question im really worry about.. as we have young children...

Q. At what point could we potentially get knocks at the door from debt companies?

so say we miss and miss payments, go into default, then what? do you then ring the creditor at that point as soon as we receive the default to arrange a payment we can afford? or do we wait again? what is the process from start to finish please? 

i am worrying so much, but I feel like we have no other choice at this point, we are literally using credit to pay for payments/ bills/ food 

Grumpelstiltskin

Please do as we have asked and fill in a SOA and post on here.

Stop paying all unsecured debts now.

Stop panicking, nothing terrible is going to happen when you stop paying.

Door knockers are just like double glazing salespeople, they are not bailiffs and you either don't answer the door or you just tell them not today thank you and shut the door, but they are way down the line anyway.

There is no need to panic and get upset, you have to realise you are in control not your creditors.

Grumpelstiltskin

There is this from Debt Camel about defaults.

How does a DMP affect your credit record?

sourcrates

loconnor89 said:

Can anyone help, with an official link for a website for where is explains about defaulting first so it comes of the credit file in 6yrs instead to waiting until the final payment is made??

another question im really worry about.. as we have young children...

Q. At what point could we potentially get knocks at the door from debt companies?

so say we miss and miss payments, go into default, then what? do you then ring the creditor at that point as soon as we receive the default to arrange a payment we can afford? or do we wait again? what is the process from start to finish please? 

i am worrying so much, but I feel like we have no other choice at this point, we are literally using credit to pay for payments/ bills/ food 

See the debt camel link in Grumps above post for defaults verses AP markers.

The vast majority of debt collectors work from call centres, one or two still knock on doors, but are only used by lenders to re-initiate contact between creditor and debtor, they are not something you should concern yourself with.

You will get a bunch of standard collection letters, then after some time, (up to 6/9 months) a default notice issued under sec 87(1) consumer credit act will be sent to you.

In most cases of debt management its just for information only, around a month after that the default should show on your credit file.

The lender will then decide what to do with the debt, it may be sold, it may be assigned to someone else, or they may choose to chase it themselves, either way, you will be written too, so you don`t do anything until your receive a letter informing you of each accounts status.

Debt collection is a very long drawn out process, nothing happens very fast, so no need to worry.

loconnor89

Thank you very much Sourcrates for this detailed explanation. 

So just to double check, we cancel Direct Debits and do Nothing in regards to setting up a payment we can afford UNTIL we receive a letter of our account status? As in its in Default? or as in, the debts been sold?

Should we not contact each creditor once its in default?

at what point does the debt turn into a CCJ? 

Myself and Husband are so scared of doing things wrong, its keeping us awake at night. it seems so wrong waiting 6/9 months of ZERO payments until its defaulted. 

RAS

Debts don't turn into CCJs. It's a possibility but we don't often see it happen, unless you owe Amex or a credit union?

You will get letters saying you are in default, ignore.

You'll get a scary letter saying pay back everything within 14 days or we (the creditor) will issue a default. That's what you want, so wait for the letter confirming termination of the relationship and then there will be a letter saying pay us or someone else. With account details.

That's when you pay what you can afford. Most unlikely you'll hear anything more, expect intermittent requests to pay more, often suggesting further action. Which means there's another series of letters in their computer.  And possibly news that the debt has been sold on.

It takes time. You are worried but you are just an account number to the debt collection industry.

loconnor89

Thank you RAS for your quick reply...

if the debt does get sold on after paying what we can afford, what happens at that point? do we stop paying again or offer more? or carry on paying?

RAS

There may be a short hiatus between you being told it's sold and the new owner getting in touch, in which case save the payments into your emergency fund. Or you might get notice from the new owner first. Missing a month or two doesn't matter.

Long term remember that often debt is sold for less and less, so the new owner may have paid 10-20p in the £. And may offer you a settlement @40%, which you counter with 20% and might pay off somewhere between.

sourcrates

loconnor89 said:

Thank you RAS for your quick reply...

if the debt does get sold on after paying what we can afford, what happens at that point? do we stop paying again or offer more? or carry on paying?

Debts are sold all the time, the new owner inherits all rights and privileges of the original creditor.

If you have been making payments to a creditor, and they sell the debt onwards, they will write to you informing you of the sale, there may also be another letter in the same envelope from the new owner, as they work hand in glove these people, its a right old con I can tell you lol.

If not they will write fairly soon after and give you payment instructions etc, there is no rush to comply, they will go through their standard letters with you, much the same as the original creditor would have done previously, when you`re ready, you can make payment arrangements via the companies website in most cases.

Most folk pay monthly, but you are not under any obligation, contract or agreement to make regular payments, all that ended when you defaulted on the original debt, they may like you or want you to pay monthly, but can`t make you do so, so if a month or two get missed, all they can do is chase you up for payment.

The only way to enforce their rights against you is by taking legal action, so no going cap in hand to these people, you may be uncertain about what lies ahead, but in this current financial climate, they are a lot more worried that you won`t pay them, believe me, as unsecured non essential credit debts are the last to be paid from anyone`s budget and if it won`t stretch to that, they don`t get paid simple as that.