Dmp

Ragdoll_kat74

hi 
I am in a DMP and my debts are now being defaulted and sent to debt collection agencies I have read they can pursue the debt to the point I will have to sell my house ? Has anyone had this happen ? 

Grumpelstiltskin

OK A bit more detail please.

Who is your DMP with?

How much do you owe?

How long has the DMP been going?

Had the debts defaulted before you started your DMP?

Had you built up an emergency fund before you started?

fatbelly

Ragdoll_kat74 said:

hi 
I am in a DMP and my debts are now being defaulted and sent to debt collection agencies I have read they can pursue the debt to the point I will have to sell my house ? Has anyone had this happen ? 

I don't know who you have been talking to but, no.

These will be nonpriority debts so they are just going to be sold around and you will get lots of letters

Where you could lose your house is with mortgage arrears and secured loan arrears.

And that is why we NEVER recommend using a secured loan for debt consolidation of nonpriority debts.

sourcrates

Only a debts owner can take legal action, so by definition, a collection agency will be hired simply to collect the debt, and they have no power of enforcement.

If you were to ignore all correspondence and the debts owner then decided to take legal action against you, and you still ignored all correspondence, then a CCJ and a charging order can be made against you, but only if you own the house outright, if its jointly owned, only a restriction can be granted, and it would end at that basically.

Lets assume the home is owed by just you, if you stayed silent and did not pay the judgement monthly payments, you may then be summonsed to court to explain yourself, if you still did not pay, then, and only then would your home be at risk, there would be at least 3 court and pre-court stages to go though before that can happen, and an opportunity to stop the next stage of legal action from taking place at every juncture.

So in theory it can happen, but you would have to ignore all collection activity, and not pay anything for it to reach that stage, the courts take the view that an order for sale is an extreme and draconian measure for someone who owes say 3k on a credit card, to lose their home over.

ManyWays

my debts are now being defaulted and sent to debt collection agencies
I know this feels worrying but actually both of these are GOOD and the sooner they happen the better.

 When a debt is defaulted, no more new interest will be added and a defaulted debt drops off your credit record after 6 years, whereas one in a payment arrangement stays harming your credit score of 6 years after it is settled,(so much longer)

A debt being sold (not just set to a debt collector but sold)  is good as a debt purchaser is more likely to accept a lower settlement offer from you in future 

Ragdoll_kat74

Apologies I’m with step change and we only went into this plan in December 25 , it’s making me feel bad o feel like a failure , it’s around 60k of debt so this is why I’m worrying they gonna come for my house 

Ragdoll_kat74

Also the house is mortgaged with no arrears and we foolishly had a secured debt against house 3 years ago which has no arrears . Thanks for your replies it’s much appreciated 

ManyWays

Have you looked at affordability complaints about the debts that have gone into the DMP? Winning any will reduce the balance so the DMP ends sooner

Grumpelstiltskin

It looks like you have jumped into a DMP too soon without understanding exactly what it means and was it the correct time to start it.

All unsecured debts so your house is not at risk but you would  have been better doing some research before you started, if you had asked here for advice we would have suggested you stopped paying the debts until they defaulted using the .money you saved to build up an emergency fund.

Stepchange don't tell you this.