Default and DMP Plan thoughts

ManyWays

I wouldn't bother asking a mainstream creditor for a CCA agreement unless the account is very old, for example a credit card opened before 2007. I would hold off CCA requests until either the debt is sold or (unlikely) a creditor is about to go to court.

But 4 zopa loans, 2 MBNA cards, Newday, yes I would think about affordability complaints to all those.

burgervanman

https://forums.moneysavingexpert.com/discussion/comment/81886959#Comment_81886959

Thanks for that. Zopa especially. I'll get on the case. I don't want to stretch things out too long but getting as much of an emergency fund is a priority. I'm assuming CCJ territory comes at 6+ months of non payment on average?

RAS

https://forums.moneysavingexpert.com/discussion/comment/81886822#Comment_81886822

You simply start making payments when each debt defaults. I'd suggest giving it a couple of months in case they sell or assign the debt and then set up a SO to pay a portion of what you expect to pay when the DMP transfers to Stepchange. It's easier to increase later than decrease. So you'll have at least 5 month's saving in your emergency fund.

As a house owner you need repair and maintenance costs and a few month's mortgage payments in case SHTF.

Edit, CCJs are relatively unusual and tend to be pursued if you don't pay anything towards the debt. Unless you owe Amex or a credit union.

If you get a Letter Before Action, come back for advice but it's unlikely in the next year anyway.

You can still stop creditor action as long as you manage it.

burgervanman

https://forums.moneysavingexpert.com/discussion/comment/81887036#Comment_81887036

So to clarify, say 4 debts default at once, start them with step change then just add the extra debts to my dmp when they default, thus maximizing emergency fund? How would this work with step change if it I've already started with say 4 debts based on a SOA budget?

RAS

No, get 4 defaults. You'll either get instructions on how to pay or notice of assignment or sale.

Most of the time, you can just go to their website and make a payment. Or set up a Standing Order on-line. Make sure to reference the account number they send you.

That keeps them off your back. When the other creditors default, transfer the details to Stepchange if you want them to manage it.

BTW, at least one poster here responded to a creditor who didn't default after over a year by explaining that they'd start paying when the default was issued. Focussed their mind.

burgervanman

That makes complete sense now. I'll work out the percentage of my allocated payments based on balances and my dmp budget and pay corresponding amounts until a DMP is worth it with majority defaulting?

RAS

Near enough. The problem is that early default providers will push for more. And could leave you in a mess later. So offer 75-80% of that amount until you have lived with your SOA budget, preferably for a year.

Once you want to transfer the management to Stepchange, they could offer a bit more, if appropriate.

burgervanman

https://forums.moneysavingexpert.com/discussion/comment/81887382#Comment_81887382

Thanks again for all the advice today. I'll get waiting then!