DMP Journey

RedMan1995

All

I am three months into waiting for accounts to default following missed payments.

I have 6 creditors owing approx. £92000.

I have done a SOA with stepchange and I can currently afford £500 a month towards paying off my balances. I am self managing now after identifying a workable budget.

I made affordability complaints against two of my creditors:

Monzo Loan - Compliant Accepted - £4500 refunded (into emergency saves) - £3200 refund off balance - leaving me with £15100 remaining.

Monzo Flex - Compliant Accepted - £700 refunded (into emergency saves) - leaving me with £5300 remaining.

They have said no more interest is being added, no negative marks on Credit File so I am starting paying these back £100 + £40 / month.

Remaining debts:

- Plata - current balance £20100 - although on credit report is highlighting £26990 which includes all interest

- Tesco Loan - current balance circa £12300 - credit report is highlighting £14723 which includes all interest

- M&S Loan - current balance circa £14500 - credit report is highlighting £18432 which includes all interest

- Lloyds CC - current balance of £11400 (limit of £11000)

I am a homeowner which i have a joint mortgage with my partner (approx 130k remaining) and they are aware of my plan on my finances - all debts are in my name and have built over over time due to mental health issues associated with alcohol and gambling (both now addressed following therapy) and substantial changes in jobs over the years.

I wish to avoid CCJ as much as possible - can you see any of the lenders being a problem?

Also when it comes to defaulting - is the amount owed includes all of the interest that looks to have been front loaded to my balances - as it is showing on my credit report. The balances as they are now are about £78700 if I was to clear them today so there's a significant difference into what Id have to pay back.

Unfortunately not successful on the Complaints regarding the other lenders.

Current plan is to reduce total balance by £6000 a year and then to review in a couple of years if my financial situation has improved through jobs etc

Thanks

Redman

Grumpelstiltskin

The unsuccessful claims, have you referred them to the Ombudsman?

RedMan1995

Not yet - I know I should get the ball rolling and do this especially as one of my main lenders has upheld it.

I just need to get my ducks in a row with detailed bank statements for the period the loans were taken out

ManyWays

Well done on sorting the alcohol and gambling, I hope that has led to better mental health. It' is good that your partner knows about all of this too.

Have you send the lender affordability rejections to the ombudsman? Getting those balances reduced would help a lot.

Many loan lenders take the view that all the full amount of interest is owed from the start. I would be surprised if Plata removes the future interest.

Is your and your partner's job situation stable? If it is and you can not win any more affordability complaints, I think it may be a good idea to consider an IVA.

fatbelly

Not usually a big fan of IVAs but with 92k debt, 500 per month available and a homeowner, it does look to be an option.

Did Stepchange discuss them with you?

RedMan1995

Thank you - it took me many years to get to the place to take action on mental health - therapy and antidepressants (which im over a year clear of) helped to then put me in a position to sort out my finances.

Okay then - so whilst I wait for the accounts to default then ill expect the balances to remain at what it is highlighting with interest added - the only additional to be added now is my Lloyd's CC which currently adding near £200 / month interest and fees until it is defaulted (they haven't actually recorded anything on my CF yet though)

I did consider IVA knowing that this option would likely clear of all debt in 6 years (vs current plan of 15 years @ £500 a month) but I would rather pay off as much as possible of what I owe based on how I accured the debts with a plan to increase payments if in time I am able to find more money. Also would rather not have the increased scrutiny of an IVA with any additional income if it ever comes as the house would benefit from some work (eg Christmas bonus / overtime etc)

I am the significant earner in the household making up 80% of the total income with my job as stable as it can be having had it for nearly 20 years. My partner on a year by year contract so its not a given, however she should look at increasing her monthly income when kids are a bit older :)

My proportional pay back to creditors are (this looks slightly out of proportion now after I set up repayment terms with Monzo after complaint Upheld and a reduced amount owing)

Plata - £140

Monzo Loan - £100

Monzo Flex - £40

M&S - £90

Tesco - £70

Lloyds - £60

I am hoping they will agree to this when the time comes

sourcrates

There is no "hoping they will agree" in debt management you pay what you want to pay from your available budget, they have little choice in the matter.

If they don`t like it they may just sell the debt on, or, if the debt is particularly large for example, they may attempt to secure their position by way of a CCJ and charging order, which is fine as long as you maintain the court approved payments, no further enforcement will happen.

This particular scenario is where an IVA (which I`m not particularly fond off) comes into its own, and does what its supposed to do, gives you legal protection from creditors and enforcement action, so no CCJ or charging order, you are protected for the full 6 years of the arrangement.

This may be worth considering, a 6 year IVA, as appose to 15 in debt management, that`s a long time, and a lot can happen.