DMP Advice

Rob5342

One ofther reason is that once defaulted the debt is more likely to be sold on, and once sold on debt purchasers will be open to accepting a reduced figure to settle it.

It can be difficult when you are starting out and get conflicting advice. Stepchange's approach is essentially geared towards getting the best result for your creditors at the expense of your credit report, the approach we tend to advise here is geared towards getting the best result for you at the expense of your creditors. Stepchange are funded by the creditors so their hands are tied a bit, but yours don't need to be.

You can tackle it whichever way you like, but I'd strongly advise stopping paying and waiting for defaults first. I started off by going sraight into a DMP with Stepchange and I regret doing so, I have a default that won't drop off until 2029 which would probably be dropping off in 2027 if I'd stopped paying and waited for defaults first.

OliverCol

https://forums.moneysavingexpert.com/discussion/comment/82091934#Comment_82091934

Thanks for this, i get everything your saying. To be fair most are default already at this point as it's been over 3 months without payment to them and I've had emails of default notices already, on the plus side of things my new sterling bank has been activated and I'm going to ring my DD company's tomorrow to change the direct debits over to my new accounts so I can save my wages alot more. I'll keep the thread updates as any other advice that's comes in is all welcome. Thanks again guys

RAS

You need to make sure you understand the difference between a letter that says your payment/account is in default and a letter threatening to register a default on your credit record.

The latter demand repayment of the whole debt and gives you 14 days to get your account up to date. Have you received any of those? Generally leading after the deadline to the registration of a default on your credit record. But sometimes creditors take a while to get round to it.

Rob5342

Yes, make sure it's actually registered as a default on your credit report before you start making payments.

It's very easy to manage yourself if you want to, I found that using Stepchange was was just an extra complication.

OliverCol

Yes they have defaulted me. The only worry I have with all of it is when I come to get a new deal on my mortgage, I won't be changing lenders or applying for more money but one of my creditors on the DMP plan is also whonmy mortgage is with, and although they don't generally do hard checks for a basic renewals it'll still be on their file of my DMP on another account with them.. stepchange says it won't affect me but idk man, with it being same company I can't see how it wouldn't

ManyWays

This will not be a problem!
(exceptions if you have mortgage arrears or the lender has stopped lending so you are a mortgage prisoner. But for a normal new fix this is not a problem.)

The lender has already lent you the money to buy your house, on a 25 year term, or whatever. They cannot back out of that contract.

When a fix comes to an end, the only question is what rate you now have to pay. The regulator would not regard it as fair if it charged you a higher rate because you are in difficulty. That is ok at the start of a mortgage as you and the lender both have the choice not to proceed. But now? You are locked in and so is the lender. You will be offered the same as any other mortgage borrower would, they will literally not even check your credit score or affordability.

OliverCol

https://forums.moneysavingexpert.com/discussion/comment/82093284#Comment_82093284

I know they wouldn't credit check on a transfer to new deal it's more of it would of shown internally as they'd be on my DMP as a creditor for a different account but thanks for clearing that up abit more for me manyways, I've been going through my DMP and realised my loans isn't even on the budget. I included them inside the budget but theyve clearly been missed by stepchange as they missed a credit card too which I fixed yesterday, I can afford the loan payments as they're very very low each month but I think I'm better putting them on for fairness to creditors aren't I?

Rob5342

Forgot about being fair to creditors, you do what is best for you and the they just have to live with it. For your own benefit it's best to include all debts and deal with it all together.

At some point your debts will get sold on to collectors for about 10% of their value. They will still try and get the full amount from you but try and make out they are being hard done by, and say things to try and mislead you, so don't feel guilty about being as hard nosed about it as they are.

OliverCol

https://forums.moneysavingexpert.com/discussion/comment/82093694#Comment_82093694

Leaving the loans off is better for me to be honest because they're paid for within 6 months they're nearly finished and their payments are super low pm.

I didn't know that about debt being sold on, well the % they sell it for anyway, my dmp is only slightly lower than the payments right now in all honesty so they're not receiving buttons from me it's a hefty sum. Thanks for this info buddy learnt something new again!

OliverCol

https://forums.moneysavingexpert.com/discussion/comment/82093284#Comment_82093284

On the mortgage note the reason I had the worry is because my old current account virgin, is the same lender as my mortgage, and stepchange put my current account on the DMP because of a £500 overdraft, I've got the £500 and I want to pay that and close the account though as I've setup my new starling, so therefore virgin won't have any internal record of my DMP anyway as it wouldn't be on. It's something I'm going to look into this weekend