Overdrafts and defaults

Gewakefie

Hi everyone

im in about 28k debt trying to save emergency fund. Made a mistake with Monzo loan and also my bank by setting up a £5 a month payment to them, but hoping they default the loan soon. I have about 12 creditors and I’m getting quite scared and panicky. 

Vanquis credit card defaulted so my plan was to set up token payment with each defaulted account as it comes into try save emergency fund. Vanquis are asking lots of questions about my mental health and anxiety that I suffer with because I said I would rather not communicate over the phone. Have had about 10 emails from them back and forth over the last week all I want to do is set up a plan.

i have 2 overdrafts one for 500 with nationwide and 250 with Halifax and I think I just made another mistake with nationwide as I read somewhere overdrafts are different and don’t default so I didn’t want to get a ccj so I’ve done an income and expenditure on the app with them to try pay something towards it. Should I have waited I’m not sure how it works with overdrafts

im panicking thinking some creditors might reject my payment offer and was going to go with step change in the new year at £300 a month as I’ve worked out that’s what I will be able to afford. Just very confused and don’t know if I’m doing things properly currently

Brie

I'd suggest that you stop making any payments to any of the creditors that you want to default.  

Also I'd suggest you get yourself a new bank account - one not connected to either Nationwide or Halifax, so Santander or Barclays or?  Once you've set up that account do a manual switch of any payments in (salary, benefits etc) and set up DDs for any priority bills (council tax, rent etc).  

Do you rent or own a home?  That will make a difference to what debt solution is best for you.  Have a read of the Debt Camel page about the options available.

Have you done a statement of accounts? (see below for the link in my signature)  It is a good exercise for you to budget properly and see what you might want to do regarding your debts.  It will also be helpful what ever debt advice agency you go with.  If you post it back here then others will be able to help you see what adjustments can be done to make things easier for you.

sourcrates

Creditors will not refuse the offered payment, as the payment is based on what is affordable to you, according to your budget, they get what you offer, and that is that, there is no negotiation on this.

That is the reason why they ask to see if payments are affordable, its FCA advice they must follow.

Overdrafts do default, but can take time, because there are no regular re-payments, but they will default in the end, and will be treated just the same as any other non priority debt, so you will be written too about them, but it may take a while.

You`re doing just fine, setting up payment plans as each debt defaults is an excellent strategy, keep in mind an emergency fund is a necessity in debt management.

Brie

Sorry - forgot the link to Debt Camel  Debt solutions - what is your best option?

Gewakefie

sourcrates said:

Creditors will not refuse the offered payment, as the payment is based on what is affordable to you, according to your budget, they get what you offer, and that is that, there is no negotiation on this.

That is the reason why they ask to see if payments are affordable, its FCA advice they must follow.

Overdrafts do default, but can take time, because there are no regular re-payments, but they will default in the end, and will be treated just the same as any other non priority debt, so you will be written too about them, but it may take a while.

You`re doing just fine, setting up payment plans as each debt defaults is an excellent strategy, keep in mind an emergency fund is a necessity in debt management.

Thank you so much and to the other person. I see yourself in particular helping on posts your words make me feel better.

Gewakefie

sourcrates said:

Creditors will not refuse the offered payment, as the payment is based on what is affordable to you, according to your budget, they get what you offer, and that is that, there is no negotiation on this.

That is the reason why they ask to see if payments are affordable, its FCA advice they must follow.

Overdrafts do default, but can take time, because there are no regular re-payments, but they will default in the end, and will be treated just the same as any other non priority debt, so you will be written too about them, but it may take a while.

You`re doing just fine, setting up payment plans as each debt defaults is an excellent strategy, keep in mind an emergency fund is a necessity in debt management.

What’s worrying me is the income and expenditure thing at the moment. As I’m trying to save something for emergency which December will be the first month that I might be able to put a couple hundred pounds away. But I’m worried that each creditor I’m going to submit different income and expenditures as obviously I’m not declaring the emergency fund money when I’m doing these income income and expenditures so when I come to do it with stepchange next year I’m worried what if they think it’s now different to before. I don’t know if I’ve explained that properly  

Rob5342

Don't overthink it, normally they just want to see some set of figures as a box ticking exercise so they can cover themselves and say they've checked its affordable. Just make something up that's plausible and arrives at the figure you want to pay, and change it later if necessary. 

sourcrates

Debt management is an informal debt solution, there are no rules on how its run or how you distribute your budget to your creditors, so you can play it exactly as you wish.

The rules on treating creditors fairly exist only for insolvency solutions, however if you were to use stepchange as your DMP provider, they have certain guidelines that you must adhere too, which include treating all creditors the same, so if you were to use their service, you would have to adapt to their rules.

How you ran your DMP prior to that, is no one else`s business but your own, but if you do go to stepchange, you would have to run it according to their guidelines.

Frankly I think that would be a backward step for you, as self management gives you so much more freedom and independence from such regulation, but the choice will of course be yours to make.

RAS

Gewakefie said:

sourcrates said:

Creditors will not refuse the offered payment, as the payment is based on what is affordable to you, according to your budget, they get what you offer, and that is that, there is no negotiation on this.

That is the reason why they ask to see if payments are affordable, its FCA advice they must follow.

Overdrafts do default, but can take time, because there are no regular re-payments, but they will default in the end, and will be treated just the same as any other non priority debt, so you will be written too about them, but it may take a while.

You`re doing just fine, setting up payment plans as each debt defaults is an excellent strategy, keep in mind an emergency fund is a necessity in debt management.

What’s worrying me is the income and expenditure thing at the moment. As I’m trying to save something for emergency which December will be the first month that I might be able to put a couple hundred pounds away. But I’m worried that each creditor I’m going to submit different income and expenditures as obviously I’m not declaring the emergency fund money when I’m doing these income income and expenditures so when I come to do it with stepchange next year I’m worried what if they think it’s now different to before. I don’t know if I’ve explained that properly  

You don't need to declare the emergency fund money.

You don't actually need to even supply income and expenditure, and generally DMP and bankruptcy allowances are more generous than many think. 

Stop paying anything to any creditor that's not defaulted. Do not pay the creditors who have defaulted more than their fair share of your surplus after living costs are deducted. Put all the "spare" money that not going to creditors into an instant access ISA. If you are on benefits be alert to the impact of savings over £6k, but don't stop if you are happy with what happens.

If you are really worried, share your SOA here and people can advise if you've got anything missing. Often, holidays, medical and dental, insurances, and sometimes entertainment. There is a poster here whose creditors accepted a decent monthly amount for therapy, once they realised that is was essential if the poster was to be able to work and repay anything.

Grumpelstiltskin

The OP has since May started a number of threads but they have never posted a SOA, so we are working in the dark, it would help us if we could see a SOA.

Gewakefie

Grumpelstiltskin said:

The OP has since May started a number of threads but they have never posted a SOA, so we are working in the dark, it would help us if we could see a SOA.

Grumpelstiltskin said:

The OP has since May started a number of threads but they have never posted a SOA, so we are working in the dark, it would help us if we could see a SOA.

Well tbf I’ve not even worked all that out yet not properly anyway 😭 will get onto it, been catching up with priority bills at the moment but I will of course do one and get some advice from the lovely knowledgeable people on here. Just quite overwhelmed and worried about it all at the moment and it’s all my fault which makes it worse