Self-managed DMP

charliesdaddy

So, I've decided a self-managed DMP is for me - 10 creditors, mostly credit cards - £45k.

I've done a budget through business debtline, but they have no availability for speaking to me and then referring to stepchange, for the next month.

So - as I understand it…

Cancel all Direct Debits - done

Don't pay until I receive default notices on any of them (this seems scary - is that correct?)

Then contact each to explain the situation and offer reduced payment and to freeze interest and fees (should this not be done earlier?)

Should I contact each creditor to say I'm experiencing difficulties before all of this?

Never been in this situation before - it was actually quite cathartic to cancel all DDs this morning…

burgervanman

https://forums.moneysavingexpert.com/discussion/6661520/self-managed-dmp

Im at stage 2 of your plan awaiting defaults. If you have an android phone (or apple) one good tip. Block all incoming calls in settings, just make sure all important things are in your contacts, kids schools etc. Made my life alot easier, some robot diallers call 4-5 times a day. They don't bother me, I don't see the calls and I just check once a day to ensure I've not missed anything genuine. If you can turn all correspondence options in apps to postal only and file all the letters you get. You have roughly the same amount of debtor's as me. Keep an excel spreadsheet or a good log of contact to keep track of defaults and status of each debt as they will all default at different times. This forum has been invaluable for me. Spend sometime reading similar posts and find the best way for you.

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/81939416#Comment_81939416

Hello, did you contact any of your creditors to say you're struggling? I read (perhaps on the YouTube link you posted or someone did yesterday) that forbearance by offering £1 token helps prevent Court action as they have to show understanding. Yes they'll still default you eventually but the token payments limit the chance if CCJ in the first instance.

Grumpelstiltskin

Spire Captain, the sooner you get a default the better, if you pay before a default you get Arrangement to Pay Markers, you don't want the as they stay on your credit report for 6 years after the final payment, so if it is in 4 years time it takes 10 years before it is removed, where a default goes after 6 years even if you never pay another penny towards the debt.

Don't even think about possible court action, if it comes to a CCJ threat it would be way down the line and you can always do something about it when you get a letter before action.

burgervanman

Don't forget unlinked bank account. Monzo or Nationwide etc. For your wages to go into.

Grumple is right, no contact speeds up default which is a good thing.

If your situation is really dire you can look at token payments. If you're like me, ok financially (job wise I mean) but have debt, I'd not look into token payments, they can delay defaults. I just plan defaulting, offering around 60-70% of what I can afford to actually repay in the real world and saving the rest to one side incase they offer me a settlement down the line.

I panicked initially about the thought of Ccjs but as they say unless a credit union or amex there's loads to do before that can happen

charliesdaddy

Yep - have opened a monzo for any direct debits and priority payments!

Grumpelstiltskin

Don't contact your creditors at the moment, it only encourages them to pester you for money.

How old are your accounts? If they are old they may not be able to produce CCAs, if they can't you just don't pay them anything as they would have no evidence to enforce payment. So even with defaults don't rush into paying them.

burgervanman

Emergency fund is always priority 1 if you don't have savings.

sourcrates

Original mainstream creditors do not usually take legal action to recover consumer credit debts, it is extremely rare for them to do so, 99/100 they will either sell the debt or assign a collector to it instead.

Some credit unions and peer to peer lenders may opt for the security of a CCJ, especially if the debt is quite large, its knowing your lenders collection process that can help greatly.

The threat of a claim increases when the likes of Lowell/Cabot/Link and various other debt purchasing companies become involved, but only if you continue to ignore contact after their standard collection letters have done the rounds, and only if they think you can pay, but are deliberately not doing so.

Once in an arrangement, the prospect of any legal action is about zero, most companies are quite happy to get anything out of you for unsecured, non essential debts in the current cost of living climate.

ManyWays

https://forums.moneysavingexpert.com/discussion/comment/81939457#Comment_81939457

As @Grumpelstiltskin says, you WANT defaults.

And it is legally not possible for a consumer credit act lender (which includes all credit cards) to even think of court action before you have been defaulted

So don't pay anything until you get a deafult, then set up a monthly payment is a sensible way forward.

Token payments in the very early days are just confusing for lenders. If you want to self manage, it's best not to pay anything until you get a default. If you want to go through a DMP firm, it's best to cancel all payments to lenders and wait until the DMP firm starts paying them..

Grumpelstiltskin

You mentioned Business Debtline, so do you have a business or are self employed?

Are the debts all personal debts or are any business related?