Overwhelmed by debt - Progressing down Default and DMP route - Advice and help needed

Always_Fishing

Brie said:

As you can see there's lots of people piling in to help - hope it isn't too overwhelming!!!

Yes a DRO is still possible and very likely a good solution for you.  Yes it will effect you for a few years but so does debt so best to get it dealt with and try to not fall into the old bad habits.  

re FiL  - all I'm saying is pay him off asap or consider it something that your wife is paying so it's not reflected when you come to do a DRO.  I knew someone who had to delay their DRO by a year as a couple of months before we'd wanted it to start they got together a bit of cash and paid off a loan.  That was very visible on their credit history so the DRO would have failed immediately.  FiL doesn't show on your credit history (I assume! unless he's actually a bank) so won't be obvious to anyone but you.  The alternative is to officially consider him one of your debts and he'll get written off along with the rest of your creditors.  I assumed that would not make him a happy man.  

Thank you, appreciate that advice!

I'm the meantime, am I following the correct advice waiting to default before actioning to speed up the overall process? From what I've read I understand the course of action should be to not acknowledge any comms until a notice of action letter arrives and keep checking my credit file for defaults. Once defaulted, contact the creditor and arrange a payment plan, (taking into consideration your point about avoiding and preferential treatment!). Should this approach keep me reasonably safe from court action and debt collector visits until I can either start chipping away at debts or apply for a DRO?

Brie

Oh and have you opened up a new bank account which is unrelated to any of your creditors? 

I can see you owe a Barclaycard so Barclays are out.  I don't know what banks service the other cards but if you look at their payment details and check the sort code you'll be able to goggle those banks.  I don't know that the underlying bank for Jaja or Aqua could access your money but best to be sure it's out of their reach.  Once the account is open you can manually switch all the DDs you need to pay and tell your employer your new details. 

Do NOT do a account switch.

sourcrates

Always_Fishing said:

I'm the meantime, am I following the correct advice waiting to default before actioning to speed up the overall process? From what I've read I understand the course of action should be to not acknowledge any comms until a notice of action letter arrives and keep checking my credit file for defaults. Once defaulted, contact the creditor and arrange a payment plan, (taking into consideration your point about avoiding and preferential treatment!). Should this approach keep me reasonably safe from court action and debt collector visits until I can either start chipping away at debts or apply for a DRO?

You want your debts to default, the definition of the word "default" is "to end an agreement" or "the end of the financial relationship".

If you keep talking to your lender, that just delays the process.

You should only contact them if they decide to take legal action, but please be aware this cannot happen until the debt defaults, normally once defaulted, the debt will be either assigned to a debt collector or sold to a 3rd party. There is a slim chance they could take action through the courts, which is why you should read all letters etc.

Normally once defaulted, you will be written too by whoever has been engaged to chase the debt.

There may be occasions where prior to default your account may be passed to a collector to collect the arrears on the account, if this happens the advice is to carry on regardless, and eventually the debt will go back to the lender to continue the default process.

There are so many variables that could happen, its best to wait and see what does happen, then deal with it.

Always_Fishing

Brie said:

Oh and have you opened up a new bank account which is unrelated to any of your creditors? 

I can see you owe a Barclaycard so Barclays are out.  I don't know what banks service the other cards but if you look at their payment details and check the sort code you'll be able to goggle those banks.  I don't know that the underlying bank for Jaja or Aqua could access your money but best to be sure it's out of their reach.  Once the account is open you can manually switch all the DDs you need to pay and tell your employer your new details. 

Do NOT do an account switch.

Ah, I have just done an account switch from Santander to NatWest, purely for the switch offer. By your reaction I'm gauging this is not a good idea!? Why is this please? If it's a showstopper I could close this new account as although the switch is complete, I have a starling account I haven't used in a while which has never been linked to direct debits or anything as it was purely an account where I would transfer 'spending money' from my salary a while back before I ran as heavily into these issues. 

Always_Fishing

sourcrates said:

Always_Fishing said:

I'm the meantime, am I following the correct advice waiting to default before actioning to speed up the overall process? From what I've read I understand the course of action should be to not acknowledge any comms until a notice of action letter arrives and keep checking my credit file for defaults. Once defaulted, contact the creditor and arrange a payment plan, (taking into consideration your point about avoiding and preferential treatment!). Should this approach keep me reasonably safe from court action and debt collector visits until I can either start chipping away at debts or apply for a DRO?

You want your debts to default, the definition of the word "default" is "to end an agreement" or "the end of the financial relationship".

If you keep talking to your lender, that just delays the process.

You should only contact them if they decide to take legal action, but please be aware this cannot happen until the debt defaults, normally once defaulted, the debt will be either assigned to a debt collector or sold to a 3rd party. There is a slim chance they could take action through the courts, which is why you should read all letters etc.

Normally once defaulted, you will be written too by whoever has been engaged to chase the debt.

There may be occasions where prior to default your account may be passed to a collector to collect the arrears on the account, if this happens the advice is to carry on regardless, and eventually the debt will go back to the lender to continue the default process.

There are so many variables that could happen, it's best to wait and see what does happen, then deal with it.

Thank you, I appreciate the reply! 

So I'm clear, once it has defaulted, should I then engage ideally to discuss a payment plan, or as you said is best advice even on this to take it as it comes, and ideally seek advice on each instance on this forum?

Always_Fishing

I've updated my SOA on my OP as I'd realised I'd missed a creditor off. I've also amended a couple of my budgets based on recommendations made so far, mainly the sports and hobbies, and gifts budgets. I think there may also be scope to reduce my groceries budget but I need to review that once I collected some data on what's reasonable over the next couple of weeks. Lastly, I've still left clothing blank for now as I'm really unsure what to budget on this, it's not something I tend to spend money on, on a monthly basis, more as and when every so often, months at a time can pass, so again I'll have to review this.

Currently this leaves me with £161, but by March/April next year will be £303 not including any salary increases or lump sums. Hopefully after these dates I can start making a dent in things. 

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 3

Number of cars owned.................... [b]

Monthly Income Details[/b]

Monthly income after tax................ 3927.52

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 3927.52[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 534.4

Rent.................................... 900

Management charge (leasehold property).. 0

Council tax............................. 187

Electricity............................. 142.86

Gas..................................... 0

Oil..................................... 0

Water rates............................. 92

Telephone (land line)................... 0

Mobile phone............................ 211.82

TV Licence.............................. 14.63

Satellite/Cable TV...................... 72

Internet Services....................... 0

Groceries etc. ......................... 507.33

Clothing................................ 0

Petrol/diesel........................... 195

Road tax................................ 16.62

Car Insurance........................... 75.72

Car maintenance (including MOT)......... 44.75

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 0

Buildings insurance..................... 0

Contents insurance...................... 30

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 100

Haircuts................................ 61

Entertainment........................... 23.98

Holiday................................. 0

Emergency fund.......................... 0

Pocket Money............................ 125.67

Hobbies & Sports ....................... 174

FIL Loan................................ 257.28[b]

Total monthly expenses.................. 3766.06[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 0[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 0........(0)........0

Hire Purchase (HP) debt ...... 14605.2..(534.4)....6.9[b]

Total secured & HP debts...... 14605.2...-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Aqua CC........................4699.51...314.4.....30.38

Barclaycard CC.................410.44....14.41.....31.04

Capital One CC.................1034.47...76.02.....30.34

M & S CC.......................5605.33...221.1.....26.9

Capital One CC.................1023.81...55.51.....30.34

Fluid CC.......................3422.27...156.5.....29.84

Vanquis CC.....................3682.21...289.7.....66.4

Zopa CC........................1649.35...119.6.....39.65

Jaja CC........................1547.99...95.67.....26.9

118 Money Loan.................3020.43...52.99.....39.9

Abound Loan....................7169.1....198.8.....22.82

Bamboo Loan....................3267.15...93.35.....44.7

Finio Loan.....................2846.36...129.3.....54.9[b]

RAS

How much did you spend over the last year on clothing? Divide by 12.

And accept that you if you didn't spend on underwear or footwear, you're likely to need one or both soon. Budget for it.

Altior

Since you have car insurance and fuel expenses etc, one expects you have a car. However there are no assets listed. Is the £14.5K secured HP a car? If so, who owns the vehicle?

Always_Fishing

Altior said:

Since you have car insurance and fuel expenses etc, one expects you have a car. However there are no assets listed. Is the £14.5K secured HP a car? If so, who owns the vehicle?

Hi, 

yes the secured 14.5k is car on a PCP agreement. I didn't list this as an asset as I understood I don't own it outright. Apologies is this is misleading/incorrect. I can correct it on the SOA if so. 

Thanks 

Altior

Always_Fishing said:

Altior said:

Since you have car insurance and fuel expenses etc, one expects you have a car. However there are no assets listed. Is the £14.5K secured HP a car? If so, who owns the vehicle?

Hi, 

yes the secured 14.5k is car on a PCP agreement. I didn't list this as an asset as I understood I don't own it outright. Apologies is this is misleading/incorrect. I can correct it on the SOA if so. 

Thanks 

No worries, it's just very useful for contributors to be aware. It's also helpful to know the market value of the car, and the terms of the agreement (ie interest rate, balloon payment, remaining term etc). Thanks.