Just overwhelming

Leofather123

Hi, summarising a few of the questions you've asked of me.
The  secured debt is a secured loan taken out when I was made redundant from a new job in early 2020 due to pandemic. Only other secured is our mortgage. I do have a pcp agreement for the one car we have in our family. All 3 are up to date.
SOA budget amount covers both building and contents insurance.
My wife's parents from abroad are always there to support for the kids birthdays and Christmas which we're grateful for.
I do have death in service through work which negates the separate life cover insurance I had.
What i would be very grateful for is advice around the debt management process.
* are there template letters i should send to the creditors - or other process.
* having missed 2 payments to several creditors (all unsecured) how to self manage asking them to give me more time until the new year.
* understanding the defaulting process and its implications.
*should I offered a token payment to each or make it manually anyway and what the process is around judt not paying and defaulting so tovfocus on an emergency fund.
* I can call Stepchange and ask that they don't go ahead with my DMP and contact the creditors, if it is felt I should do this myself - so I need to understand the steps I need to take and the known risks I can look out for and plan for.
Thank you for your support.

elsien

The advice here  tends to be not to make token payments because it just prolongs how long things show on your credit file for in the future. 

Grumpelstiltskin

OK What to do.

1) Don't panic.

2) Stop all unsecured debt payments.
Do not contact any creditors, do not speak to them.
Do not answer any phone calls texts or E Mails.

3) Save every penny you can for your emergency fund, vital as you will have no access to credit.

4) If you haven't already get a new basic bank account with a banking group you don't owe money to and manually move all vital direct debits do not use the banking switch service.

5) Realize everything in debt collection moves very slowly, defaults can take up to 18 months to appear and you don't pay anything until a debt has defaulted

tigergambit

Leofather123 said:

Hi, summarising a few of the questions you've asked of me.
The  secured debt is a secured loan taken out when I was made redundant from a new job in early 2020 due to pandemic. Only other secured is our mortgage. I do have a pcp agreement for the one car we have in our family. All 3 are up to date.
SOA budget amount covers both building and contents insurance.
My wife's parents from abroad are always there to support for the kids birthdays and Christmas which we're grateful for.
I do have death in service through work which negates the separate life cover insurance I had.
What i would be very grateful for is advice around the debt management process.
* are there template letters i should send to the creditors - or other process.
* having missed 2 payments to several creditors (all unsecured) how to self manage asking them to give me more time until the new year.
* understanding the defaulting process and its implications.
*should I offered a token payment to each or make it manually anyway and what the process is around judt not paying and defaulting so tovfocus on an emergency fund.
* I can call Stepchange and ask that they don't go ahead with my DMP and contact the creditors, if it is felt I should do this myself - so I need to understand the steps I need to take and the known risks I can look out for and plan for.
Thank you for your support.

/\  /\  /\ Do what Grumpelstiltsken says /\ /\ /\

Don't call StepChange until everything has defaulted. Point 5 is particularly important.

RAS

Since you have already engaged with Stepchange, call and halt that process.

If you start a DMP with them immediately, you will have no emergency fund. They make a minor allowance which means every time something big breaks or the house needs repairs, you have to get them to amend or halt the DMP. It's a lot more stressful than necessary.

It also damages your credit record longer. The quirks of debt reporting mean:

If you make payment less than contracted, the lender reports an AP marker on your record. This stays on your credit record for 6 years after the debt is paid off, which could be a while.
If you just stop paying sometime in the next 3-18 months the creditor will default the debt. That is removed 6 years later, even if you haven't paid a penny.

Stepchange, letters and token payments all delay the issuing of defaults. So you need to go hard turkey. Tell the creditors to remove your phone and email address and write only. That cuts out the autodial.

All important documents are sent by mail, by law.

benbenandme

Is there any possibility of your wife working more hours? I appreciate childcare costs may make that counter productive, but could she do some evening work if you're home in the evenings for example?