Urgent advice. DMP now or default first. Please help on a plan

HolyLad

ManyWays said:

an account sold to a debt collector is normally added to your credit report and from then on they report your payments. But only one of the two "defaults" for the same debt is actually used in the scoring calculations, if you are worried about your credit score implications. 

So say the debt is sold. PRA take over.
PRA are on my credit report.
The first entry appears as D. If I make a payment each month Is it still repeat as D entry every month or green tick. What if I miss a month to them?

HolyLad

sourcrates said:

When a debt is sold, the new owner retains all rights and privileges of the original creditor.

As for credit file entries, when a lender sells a debt, it has usually already defaulted, a debt can only default once, the new owner will place their entry on your file, under their name, it should show the original default date, and the outstanding balance.

The original entry should show the same default date, and a zero balance, as it has been sold.

Normally the old entry will disappear, leaving just the new entry, but occasionally both will stay visible, this is perfectly normal, and it relates to just the one debt, one default date, but two entries.

All entries will disappear at the 6 year point regardless of any other actions.

Thank you. Im learning so much here.
And if I want to backdate it, for example they did not apply it for 12 months...I get in contact with the original creditor and if successful they will inform the person who bought the debt to update the Default date? Or is that done automatically. Or do I contact the new owner to update it and complain to them?

ManyWays

Once a debt has defaulted, every month will always show as a D whether you are paying it or not, until it drops off 6 years after the default date. If you think the original lender should have added a default earlier, you ask them to change it. If they do, the debt collector then has to use the same date

HolyLad

Hello. I hope you are all well. Its finally happening and starting tomorrow.

Can someone please check i am doing this correctly? This will start tomorrow with the first payments being missed and have never missed a payment in my life.

1. Miss all unsecured payments. Starting tomorrow.

2. Keep paying rent, council tax, utilities and any priority debts. Credit Union Loan.

3. Start building a small emergency fund from what you free up.

4. Expect calls / emails / letters from creditors.

Do not discuss finances by phone. Don’t agree payment plans.

Let calls go to voicemail or answer once.

5.  After 2 missed payments (about 4–8 weeks) send one short written message to each creditor requesting written-only contact. ???? Do I do this??

This avoids them putting you on an “arrangement to pay” while still documenting your hardship.

Continue to ignore routine chasers.

6. Wait for defaults to appear (usually around 2–6 months from first missed payment; sometimes sooner, sometimes later).

Track dates in a simple spreadsheet (creditor / account / first missed payment / default date).

7. Once accounts have defaulted:

Start small, affordable standing orders to keep accounts quiet (e.g., token payments like £5–£10) — only after default. To prevent LBA.

8.  Negotiate and satisfy defaults on a timetable that suits your cashflow.

7. Always respond if you receive a Letter Before Action (LBA) or a court claim — those require immediate attention. Everything else you mostly ignore and file.

Two questions i have.

Do i ignore the creditors completely? Or do I tell them after one month of missing payments what my plan is? Im unsure how I communicate with them.

Do I only speak to them once until I default?

Stepchange are trying to tell me to get in a plan now rather than waiting and are telling me to speak to my creditors.

Thank you so much

Grumpelstiltskin

I know what Stepchange are telling you does see the right thing to do but it isn't.

Do not contact your creditors at all, ignore calls, texts, E Mails, block all numbers you can. Open and read any letters you get by snail mail.

5) Entirely up to you.

RAS

You've got the basics but .....

Can you confirm that you have a bank account in no way associated with any of the providers to whom you owe debt? Check all banking groups. 

And you've transferred your income and essential DDs to the account? It needs to be one from which you've not been paying DDs to debt providers, or they'll just re-instate them.

If you need a new account try Starling, Monzo or a basic account that doesn't require a credit check.

You don't need to wait to insist on all comms in writing. 

HolyLad

RAS said:

You've got the basics but .....

Can you confirm that you have a bank account in no way associated with any of the providers to whom you owe debt? Check all banking groups. 

And you've transferred your income and essential DDs to the account? It needs to be one from which you've not been paying DDs to debt providers, or they'll just re-instate them.

If you need a new account try Starling, Monzo or a basic account that doesn't require a credit check.

You don't need to wait to insist on all comms in writing. 

yes, have a basic account with nothing linked. any other tips you can provide? 
so should i insist on comms now - first payments missed to all creditors today? any good template? 

RAS

Start putting the money left over after transferring essentials into a savings account, perhaps two. One takes the monthly money for budgeted annual and occasional items, I refer to it as a budgeting account. The other is your real emergency fund, for job loss, ill health, major breakdowns. 

So boiler maintenance and repairs are in the former, boiler replacement might be helped by the latter.

sourcrates

Holyt said:

Two questions i have.

Do i ignore the creditors completely? Or do I tell them after one month of missing payments what my plan is? Im unsure how I communicate with them.

And what would you tell them?

To get your accounts to default, requires you to break the financial agreement you have with your lenders.

That means the end of your financial relationship with them, its like a break up, you cut them off completely so the default process completes as soon as possible.

If you contact them, they may want to try and help you by making an arrangement to pay, or holding interest on your account for a period of time, all measures designed to stop the debt from defaulting, and all counterproductive to your goal.

The lenders you have now, may not be the ones you eventually start debt management with, as debts are sold under these circumstances on a regular basis, so what good would it do talking to them?

No communication is necessary unless you get a court claim.

HolyLad

Thank you everyone. I will update in a few months depending on how things go. And ask any questions regarding letters if I need help. You are amazing.