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

Always_Fishing

Altior said:

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.  

All understood, thanks. 

The PCP agreement ends in March 2026 with a balloon payment of 12.5k due. The car its self should be worth more than that, circa £15-18k perhaps, I would need to research to confirm. I intend to purchase the car through refinancing the balloon payment with the existing finance company and have already started discussions on this. The monthly payments should come down quite significantly on this then, but I haven't factored this in to my budget yet until it is all confirmed. That is Plan A, understandably I'm working on getting these arrangements in place asap before my credit rating takes a hit. 

Altior

Always_Fishing said:

Altior said:

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.  

All understood, thanks. 

The PCP agreement ends in March 2026 with a balloon payment of 12.5k due. The car its self should be worth more than that, circa £15-18k perhaps, I would need to research to confirm. I intend to purchase the car through refinancing the balloon payment with the existing finance company and have already started discussions on this. The monthly payments should come down quite significantly on this then, but I haven't factored this in to my budget yet until it is all confirmed. That is Plan A, understandably I'm working on getting these arrangements in place asap before my credit rating takes a hit. 

Positive there, you do at least have the option of selling the vehicle, purchasing a new used one and owning it outright, especially at the upper end of that estimate. Clearly it would mean a downgrade, but no car repayments. Realistically you might not have the resources to run a £15-18K car. 

itsthelittlethings

One other thing that might help you is to start writing down everything you spend. This helped me when I started tackling my finances. Google Sheets has a budget template that really works. You can do your budget on one sheet and then write down all the transactions and it calculates how much you’ve spend in each category.

Always_Fishing

itsthelittlethings said:

One other thing that might help you is to start writing down everything you spend. This helped me when I started tackling my finances. Google Sheets has a budget template that really works. You can do your budget on one sheet and then write down all the transactions and it calculates how much you’ve spend in each category.

Thank you, I'll start that straight away. I've set up budgets in my online banking app to do this, however your suggestion will be better I think and more accurate due to not having to wait for pending transactions and things like that to clear. 

This will be importantly I think over the next few weeks/months as as I mentioned, my budget is just an estimate at the minute based on info I have readily available with regards to spending on things like groceries. Honestly my finances have been such a mess, it's difficult to pin point exactly what I've been spending on what due to the amount of CC's used. 

I'm so embarrassed by all of this, but it's time to face the music and deal with it. My kids are going to be at an age in a few years where they need a head start in life and I'm determined to be able to help them with that. 

Gandalf644

Always_Fishing said:

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. 

The problem with using the switching service is that all your Direct Debits etc will be forwarded to the new bank. Hence your creditors can still take from your new bank. Hence ideally closing the account you set up via the switching service. 

You ideally need to manually open a new current account with a bank you do not owe money to (nor to any banks owned or operated by the new bank) as banks have a 'right of offset' between sister companies. So, for example, as you owe money to M&S Financial Services, this is part owned and operated by HSBC, so HSBC and First Direct are not the ones to move to.  

Once your new 'clean' account is opened, you need to manually set up only those direct debits for the essentials you need to carry on paying (rent, council tax, utilities etc). 

Your Starling Bank may work if there is no connectiion at all to any companies to which you owe money and no direct debits/standing orders already set up to any company you are going to stop paying.  Also make sure that as you haven't used it 'for a while', it hasn't gone dormant. 

Always_Fishing

Gandalf644 said:

Always_Fishing said:

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. 

The problem with using the switching service is that all your Direct Debits etc will be forwarded to the new bank. Hence your creditors can still take from your new bank. Hence closing the account you set up via the switching service. 

You ideally need to manually open a new current account with a bank you do not owe money to (nor to any banks owned or operated by the new bank) as banks have a 'right of offset' between sister companies. So, for example, as you owe money to M&S Financial Services, this is part owned and operated by HSBC, so HSBC and First Direct are not the ones to move to.  

Once your new 'clean' account is opened, you need to manually set up only those direct debits for the essentials you need to carry on paying (rent, council tax, utilities etc). 

Your Starling Bank may work if there is no connectiion at all to any companies to which you owe money and no direct debits/standing orders already set up to any company you are going to stop paying.  Also make sure that as you haven't used it 'for a while', it hasn't gone dormant. 

Thank you, i hadn't considered that in all honesty, id just considered the switch bonus as a way to add to my new savings pot. 

I did cancel all DD before the switch started to my creditors, some of the loans held debit card details which I froze before the switch also. Would you suggest I still potentially at risk of these issues? I have had notifications of them not being paid/able to collect but I'm not sure if that could change as things escalate based on what you've mentioned. 

The starling one is still active and privately owned as far as I can see so I have that option at least. 

Thanks again 

Gandalf644

Always_Fishing said:

Gandalf644 said:

Always_Fishing said:

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. 

The problem with using the switching service is that all your Direct Debits etc will be forwarded to the new bank. Hence your creditors can still take from your new bank. Hence closing the account you set up via the switching service. 

You ideally need to manually open a new current account with a bank you do not owe money to (nor to any banks owned or operated by the new bank) as banks have a 'right of offset' between sister companies. So, for example, as you owe money to M&S Financial Services, this is part owned and operated by HSBC, so HSBC and First Direct are not the ones to move to.  

Once your new 'clean' account is opened, you need to manually set up only those direct debits for the essentials you need to carry on paying (rent, council tax, utilities etc). 

Your Starling Bank may work if there is no connectiion at all to any companies to which you owe money and no direct debits/standing orders already set up to any company you are going to stop paying.  Also make sure that as you haven't used it 'for a while', it hasn't gone dormant. 

Thank you, i hadn't considered that in all honesty, id just considered the switch bonus as a way to add to my new savings pot. 

I did cancel all DD before the switch started to my creditors, some of the loans held debit card details which I froze before the switch also. Would you suggest I still potentially at risk of these issues? I have had notifications of them not being paid/able to collect but I'm not sure if that could change as things escalate based on what you've mentioned. 

The starling one is still active and privately owned as far as I can see so I have that option at least. 

Thanks again 

So, although you may have closed down the direct debits to your creditors, one or another may have got ‘switched’ and they may try to resurrect the ‘switched’ Direct Debit to get an owing payment.

Although strictly speaking this would be against the ‘Direct Debit Guarantee’ it could for example temporarily leave you with no access to your money or even put you temporarily overdrawn and possibly incurring charges etc whilst it is ‘unwound’.

Hence it is much better to start afresh with a completely ‘clean’ new Current Account (even a Basic Account with no overdraft facility) or use your Starling one if no previous connections with creditors or DD’s etc.

As an aside, if you do manually open a brand new ‘clean’ account you can leave the Starling one as an emergency back up with a small amount of cash in,  just in case the new primary bank ever has IT problems etc as it will at least afford you access to some funds.

Always_Fishing

Hi,

I've received a couple of emails this week issuing a 'notice of default sums'. I think I'm right in thinking that this is just a late payment notice and not a default notice at this point, however is anyone able to confirm for me just for reassurance please?

thanks in advance. 

sourcrates

Always_Fishing said:

Hi,

I've received a couple of emails this week issuing a 'notice of default sums'. I think I'm right in thinking that this is just a late payment notice and not a default notice at this point, however is anyone able to confirm for me just for reassurance please?

thanks in advance. 

A "notice of default sums in arrears", its just telling you that you are behind with your payments and they will charge you £12 each time this happens.

It is NOT a default notice, a default notice is sent specifically under "section 87(1) CCA" and will clearly state what it is, and why it has been sent, it will also be sent by letter, not email.

A lot of people confuse the two, mainly because they don`t read them correctly.