Self managed DMP advice/help??

Fusion27

Evening everyone.

This is my first post here after reading only for months. I am intending on doing a self managed DMP & have already ignored my lenders for a few months. Today I received a letter with my first default from “Creation” which I have a loan with. 

I have copy & pasted the main part of the letter below and I am wondering what my next step should be? Do I continue to ignore them or is now the time to set up a payment plan?

Thanks in advance!!

THIS IS A DEFAULT NOTICE SERVED UNDER SECTION 87(1) OF THE CONSUMER CREDIT ACT 1974

According to our records, you are in breach of clause 2 of the terms and conditions to the above agreement, which requires you to pay the instalments specified in the Key Financial Information of the agreement on the stated dates.

The nature of the breach is failing to pay the instalments due on the stated dates.

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH.

In order to remedy the situation you are required to pay the arrears shown above before 28/01/26. If you do not pay the arrears as required by this notice, further action will be taken against you through the courts or otherwise for the recovery of the Outstanding Balance less any rebate on early settlement (Amount to be Paid PLUS statutory court fees/solicitors costs..

IF YOU DO NOT TAKE THE ACTION REQUIRED BY THIS NOTICE BEFORE THE DATE SHOWN THEN THE FURTHER ACTION SET OUT BELOW MAY BE TAKEN AGAINST YOU.

Failure to comply with this notice will result in:

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The termination of your Agreement.

The whole balance outstanding on the account will at that date become immediately due and payable, together with any interest that subsequently becomes due.

Possible legal action for recovery of all sums due under the account.

IF YOU HAVE ANY DIFFICULTY IN PAYING ANY SUM OWING UNDER THE AGREEMENT OR TAKING ANY OTHER ACTION REQUIRED BY THIS NOTICE, YOU CAN APPLY TO THE COURT WHICH MAY MAKE AN ORDER ALLOWING YOU OR ANY SURETY MORE TIME. IF YOU ARE NOT SURE WHAT TO DO, YOU SHOULD GET HELP AS SOON AS POSSIBLE. FOR EXAMPLE YOU SHOULD CONTACT A SOLICITOR, YOUR LOCAL TRADING STANDARDS DEPARTMENT OR YOUR NEAREST CITIZENS' ADVICE BUREAU.

fatbelly

It's a standard default notice.

If your plan was to make payments, you can now start

Fusion27

fatbelly said:

It's a standard default notice.

If your plan was to make payments, you can now start

Isn’t making payments the only option in the end?

I was under the impression I continued to ignore & wait for the debt to be sold on & then set up payment plan with whichever company buys the debt?

RAS

No harm in waiting a few months to find out if it's actually registered on your credit record, and to see whether they've sold, hired debt collectors or are dealing with it in-house.

You should react if you get a letter telling you where to make payments, often on-line.

Probably another 6 months to build your emergency fund. How much have you saved?

Fusion27

RAS said:

No harm in waiting a few months to find out if it's actually registered on your credit record, and to see whether they've sold, hired debt collectors or are dealing with it in-house.

You should react if you get a letter telling you where to make payments, often on-line.

Probably another 6 months to build your emergency fund. How much have you saved?

I currently have around £1.5k saved in emergency fund.

This is the first default I have recieved I stopped paying all my creditors in September/october. There’s still another 2 loans 1 littlewoods & 2 credit cards to default. 

It certainly gets abit worrying with the wording of the letters

RAS

The wording of the letter is prescribed by law. They have to give debtors time to engage and pay off the debt before reporting something affecting their credit record.

fatbelly

It's standard wording

No, a self-managed debt management plan is one of maybe a dozen strategies. 

If you want to make payments we do recommend that you wait for defaults to avoid an arrangement to pay marker

Other than that it's up to you how you manage things

Fusion27

fatbelly said:

It's standard wording

No, a self-managed debt management plan is one of maybe a dozen strategies. 

If you want to make payments we do recommend that you wait for defaults to avoid an arrangement to pay marker

Other than that it's up to you how you manage things

What is another option instead of making payments eventually? Surely you can’t just ignore the creditors forever & hope they stop?

RAS

You can indeed. There's a good chance it'll work for a few years.

What we are seeing IMO is debt buyers getting more savvy. It's seems to be more common for a new debt owner to send a Letter Before Action in year 5, to the last known address.

You can rebut by demanding proof and hope the creditors haven't got supporting paperwork, but the rules on paperwork are likely changing. Or you could end up with a CCJ by default if you've moved.

Obviously, if the documentation is missing and you demand it, you're safe, as long as that continues.

One option, if you don't want to pay back, is to save into a fighting fund and hope for discounts settlements.

ManyWays

Another option (not really a separate one as you can combine it with any others) is to make affordability complaints to the original lender, so creation in this case.

Fusion27

ManyWays said:

Another option (not really a separate one as you can combine it with any others) is to make affordability complaints to the original lender, so creation in this case.

Yes I have been told to do this so I am going to send one to each of my creditors over the weekend.

i think I will continue to ignore for now save up more interest emergency fund & wait to see how creation deal with it once it is defaulted on my credit file