Advice on DMP with step change needed

RAS

You can set up your own DMP as Grumpelstilskin suggests or you can wait for the defaults to come in and move to Stepchange.

You will at some stage get offers for discounted settlement, perhaps 30-50 percent of the face value, maybe less. If you want to take advantages of these you need to do it yourself.

ManyWays

If you get an offer to settle a debt in a Stepchange DMP it isn't a problem to accept it. Or indeed to make an offer to a creditor yourself, Stepchange are a bit sniffy but this is pretty common.

sourcrates

To be honest, and I know this is all very new to you, so its completely understandable, you are over thinking what debt management actually entails, there is really very little you need to do, the official debt charities attempt to make it sound a lot more difficult to DIY things than it actually is.

The one thing you must do is make certain you have a "safe" bank account to pay bills from, by safe, I mean an account not attached to any bank you may owe money too, and apologies beforehand as I have not had time to read your SOA before posting this, so I`m not clear on your actual debts, so a basic bank account from a stand alone bank such as Monzo/starling or COOP say for example, is required, if you owe money on an existing overdraft, you ditch that account, and they become just another unsecured creditor.

Then, once that`s done, you just stop all of your non essential, unsecured debt repayments, and channel that money into your savings, you should keep an eye on any letters creditors may send you, texts emails and calls can all be ignored, anything of importance comes in the post, and for the next 6 months or so you simply go about your life as per normal, and ignore your debts completely.

Around the 6/8 month mark, defaults should be appearing on credit files having previously received default notices in the post, your lenders will be either preparing to sell your debts or assign them to collectors, either way, once defaulted, you can then start paying them back.

Whoever picks up your debts will write to you, as in most cases they will not be the original lenders, they will mostly be collection companies or stand alone debt purchasers, who will all have their own websites where payments can be made 24/7, no need to speak to anyone, no need to write with offers of payment, you just pay what your budget says you can afford, a simple click of the mouse every month for each debt, and that`s the job done, that is a DMP, or debt management whatever you want to call it, very easy, very quick, and with minimal effort from yourself.

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82094010#Comment_82094010

You have a number of weapons you can use to reduce the term. You can pay whatever you like towards it, so when you get payrises you can increase your payments. You can make affordability complaints and get interest refunds. You can make cca requests and if the cca can't be found you can ignore the debt (although the government is planning to reduce consumer protection in that area) You can make reduced settlement offers once the debt has been sold.

As an example I started off with £44, 000 in debt, and cleared £11,000 of thay by making an affordability complaint, and can ignore £7,000 of it as the CCA request for that debt couldn't be found.

The defaults will drop off 6 years after they were applied no matter what you do, so it's best to stop paying completely and get the defaults as soon as possible. It's the creditors that apply the defaults, Stepchange have nothing to do with it.

naturemama1

thanks for all of advice. I think my sister is going to help me pay off the worst of it - thank god for her. Does anyone have any templates of how to do an affordability claim? I don’t think any of the debts are old enough for the cca thing, but thanks.

sourcrates

https://forums.moneysavingexpert.com/discussion/comment/82095392#Comment_82095392

See here, applies to credit cards and loans equally:

Affordability refunds from loans · Debt Camel

Smudgeismydog

That is so very kind (and generous) of your sister, I’m sure you are appreciative.

I helped my sister get out of her debt, and I know how grateful she has been. Please take time to understand how you found yourself to be in this position, and make lifestyle changes to stop it happening again.
Look at your bank balance regularly, review all outgoings, plan and save for large expenses and if you feel your spending getting out of hand, be honest enough to rein yourself in

best of luck