Self managed dmp process questions

itsallrigged

Hi all,

Following advice I received on here a few months ago, I cancelled all 17 of my debt direct debits and stopped payments. So far, four accounts have defaulted. I’ve been monitoring my credit file to confirm each default before making any payments to the collectors.

Of the four that have defaulted, none have been sold yet — they’re all still being collected “on behalf of” the original lenders (except Savvy, who seem to collect in-house). I also have a few collectors chasing me by letter and phone for accounts that haven’t defaulted yet.

My question is:

Should I contact the debt collectors and set up a payment plan for the accounts that have now defaulted, or should I just continue paying them by bank transfer as I’ve been doing?

So far, I’ve stayed completely silent — I haven’t spoken to any collector or creditor. I found the bank details and reference numbers for each defaulted debt and have been paying them by bank transfer from a new basic bank account: £1 for the first month, then £3–£7 per month depending on the balance (£1-2000) They’re still chasing me, but they are receiving the payments and the balances are slowly going down.

I’m unsure whether it’s better to keep ignoring their contact attempts and continue paying this way, or whether I should send them my SOA and set up an official payment plan (they all keep directing me to online portals to submit information). Realistically, the monthly amounts wouldn’t change — I’m already paying what I can afford and these payments will be consistent.

I’m mainly waiting for defaults on some larger debts (ACI £12k, Moorcroft £14k and £10k). Once these default, I don’t want to do anything that increases the risk of court action, as my planned payments to these would be £40/£36/£31 a month respectively.

My plan going forward:

Split my available monthly repayment budget into two halves. Use 50% for monthly payments (adjusted per creditor based on balance). Save the other 50% to build up funds for full-and-final settlement offers. Snowball from the smallest debts upwards, f&f settling what I can as my savings pot grows.

Any advice regarding payment methods and contact at this stage would be appreciated. It’s still early days — only 4 of 17 have defaulted, and most of the others are still accruing interest and fees.

Will the bigger collectors be willing to accept £30–£40 a month for the next few years while I work on settling the smaller and medium-sized debts? Ultimately I want all the debts sold off cheaply so I can settle with the new collectors down the line, so it is better to keep quiet and send my payments via transfer ? Sold off debts is the aim but not so uncooperative they go for a ccj, as that’s not so good i guess. 

Any help on this is appreciated.

Grumpelstiltskin

OK There is no such thing as an official payment plan, you are in charge, you decide what and who you are paying.

The best way to pay is by standing order,  not direct debit.

Sending them a SOA if you want, it doesn't need to be accurate  as long as it shows you can only afford to pay them the amount you are going to pay.

I haven't read your previous posts but have you tried affordability claims if appropriate ?

Rob5342

It's up to you really. Dmps are informal arrangements with no rules, setting up a payment plan and providing income and expenditure details are just things they ask for for their own purposes,. You don't have to do either but it can sometimes be easier to play along with their game and keep them off your back. It's just a box ticking exercise for them so they can say they've checked it's affordable. If you do give them income and expenditure details then don't give them real figures, just make something up that sounds plausible and arrives at the amount you want to pay them.

With Link I just sent them an email stating what I'd be paying, saying I wasn't going to supply any income or expenditure details. They kicked up a bit of a fuss saying they would only accept it on a concessionary basis but then turned off their automatic nagging. If they'd made more of a fuss I'd have just invented some I and e details

I wouldn't think too much about it. Pay everyone according to your long term plan, send them a quick email to let them know what you are doing, and if they make more fuss than you are happy with then play along with their games to !!!!!! them up. 

fatbelly

My only question would be why you have settled on a dmp of around 300 months.

Are you expecting income to rise or are you a homeowner who wants to avoid insolvency?

sourcrates

They keep up with collection activity as they must follow FCA rules on affordability, so any payments you make have to be affordable, they are supposed to confirm this with the debtor, which is likely why they are trying to contact you.

Brave new world where a debt collector refuses payment if its deemed unaffordable, who would have thought lol.

ManyWays

Will the bigger collectors be willing to accept £30–£40 a month for the next few years while I work on settling the smaller and medium-sized debts? 
no they are not likely to think that is reasonable. Why should they? 

I think you need to rethink this plan and look at bankruptcy. (And your partner should be looking at a DRO.) You had 6k in savings, has that increased or fallen?

fatbelly

Like Many Ways, I had a look at your other thread. There was also a car on hp that you were trying to protect.


What's the latest on that?

itsallrigged

Stiltskin - yeah I’ve done the affordability complaints all knocked back by the lenders and denied by the ombudsman. The broad strokes are, as I had no prior defaults or missed payments in my lending history and was keeping up with all the payments, albeit borrowing from Peter to pay Paul, the ombudsman says they all acted fairly and followed procedure in the lending decisions. I didn’t persue all of the loans, for example the interest free ones as they tend to refund interest, so there’a not a lot to gain there. 

Fat Belly — I’ve been torn between going scorched-earth with an IVA or following this route. I have no assets, I’m renting, my car is on HP, and I have no savings. My spreadsheet shows £69,200 (and rising) in unsecured debt, as interest and charges keep being added while I wait for defaults. My secured car HP debt is £17,000 with £407 per month payments, finishing in April 2029 — after that, the £407 would be freed up for creditors.

My income might increase soon if I accept a promotion at work (pay still TBC), but with the usual april increases of rent, council tax, and everything else that goes up, I’ve no idea how far that increase will actually stretch. It seems sensible to wait and see how that all plays out if I went for an IVA otherwise I may be asking for changes to the script soon after signing up for the thing. 

A self-managed DMP feels riskier in terms of how long it will take to clear everything. A lot depends on whether my full-and-final settlement plan works — if not, it could drag on for many years past the end of an Iva. Argh! Dilemmas

Thanks all for your resonses so far 

sourcrates

There is no benefit to an IVA for you, as you have no assets to protect.

IVA`s are first and foremost for homeowners who can`t go bankrupt, looking to protect an asset such as their house, you have no such assets, so why are you thinking IVA?

You may as well just accept bankruptcy as the way forward, discharged and debts written off in 12 months, you may get a 3 year IPA, and the car would have to go, but by 2029, you`d be out the other side, and debt free.

Your current plan would see you still paying this off more than 10 years from now.

ManyWays

didnt your last post say you have 6k in savings? that could be enough to buy a car for 4k, hand back the HP car and then go bankrupt - all over in three years, not 5/6 for an IVA

itsallrigged

Thank you all for your replies. Since your bankruptcy recommendations I’ve spent the afternoon researching bankruptcy and this is what I will do.

thanks again.