What should not be included in a DMP

Newdawn82

Hi all 👋 I am in the process of sorting out my creditors to eventually do a DMP. This will only be my first month of not paying, to await defaults. However, there are three payments I am unsure whether to pay or default on.

The first one is Zilch. Like a credit card but I had to pay a fee to spread by installments rather than like a traditional credit card. I have two payments left of £65 each.

The second is Amazon pay in installments. I have 2 items and about 3 months left of paying £60 a month altogether. Should I still pay this?

Finally, Lowell. This is an old debt that used to be Next online and was sold to Lowell many years ago (around 15 years ago). I pay £20 a month but owe around 2 and a half grand to them. But I don’t pay interest so unsure if this should be included? The debt has already been sold to them so what will happen if I default?

Thank you for your advice. These ones have stumped me!

Grumpelstiltskin

OK if you can clear the first 2 in a max. of 2 months clear them.

If the Next one is so old there is a chance they can't provide a CCA so you don't need to pay that at all.

Don't rush into setting up a DMP too soon you need to have an emergency fund set up, have you given us a SOA

for our advice?

tigergambit

I think that as they have such a short period left and are small amounts it will be easiest for you to just pay off Zilch and Amazon as scheduled. No point having the hassle of dealing with two extra creditors.

Have you requested a CCA on the Lowell one? If not then do so now, stopping payments until it is provided.

fatbelly

There are no fixed rules in a self-managed dmp. It is an informal solution. So you do what you think is sensible.

With a debt of £135, just pay it off.Likewise £60.

With Lowell it goes into the dmp and you see what figure you should be paying them. If it is somewhere near £20 per month then no change is needed

Newdawn82

Thank you all. I am working on a SOA. I’m finding it tricky because I’ve literally just left my job yesterday as I have a new one but it’s taking ages to get a start date sorted. It’s within healthcare and that notoriously can take weeks and weeks to figure out so currently I don’t know where my next pay will be. I have £500 to last until then once all bills have been taken, I have 3 children although only 1 is under 18.

I can definitely cover the Amazon and Zilch this month, next month I’m not so sure. With the Lowell, should I cancel the direct debit and not pay until they produce the CCA or pay this month while waiting?

Grumpelstiltskin

Cancel the Lowell payment now plus all other unsecured debt payments except the small 2, debt collection moves slowly and nothing terrible is going to happen, you must think of yourself before your creditors.

ManyWays

I agree with @Grumpelstiltskin that it is worth asking Lowell to produce the CCA agreement for the old Next debt. Do this now, the government may remove your right to do this at some point.

See

Credit agreements | Getting information | National Debtline

for more about htis and use the exact template letter in there. Also include a 31 cheque of postal order as the article says.

But if the CCA is produced, include this Lowell debt in any DMP, not to get the interest stopped but to distribute the amount of money you can afford fairly across the debts. There is no merit to leaving it outside. It has already defaulted and you will not get another default on it.

Newdawn82

https://forums.moneysavingexpert.com/discussion/comment/82086925#Comment_82086925

Thank you, I have just read the article but it doesn't say anything about a postal order. It does say it would cost £1 but then the letter template doesn't mention paying at all. It also says this can be sent as an email but how would I do that and send the £1?

Grumpelstiltskin

The usual way to do this is to buy a £1 postal order, do not fill it in, leave it blank and send by snail mail.

Sometimes the creditor doesn't cash it and sends it back to you, if this happens you can then use it again to send to a different creditor.

fatbelly

Yeah. It's a requirement of the 1974 Act, to make it legally binding that they cannot enforce the debt if they cannot comply. Has to go by snail mail, I am afraid

As said above, this is legislation that is on the way out but if they get bound by it while it is active, it should stay that way

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82086989#Comment_82086989

Have you looked at the right letter? It's a request under the Consumer Credit Act that you would be making. This is the appropriate letter which does mention paying £1

https://nationaldebtline.org/get-information/sample-letters/information-about-your-agreement-under-consumer-credit-act/