AP, then defaulting

Rob5342

Defaulting on £20k is superior as it means you have a good chance of clearing it all for less than £20k, rather than having a good chance that you'll have to pay at least £10k to clear the £10k. It also means that all interest is frozen and you have a clear date when your credit report will be clear, so you can simply pay whatever you can afford however things turn out. There is also the possibility of the cca not being found if you ask for it in which case you can ignore the debt, although there are plans to water down or remove that protection. Paying money off your mortgage would be much better than paying off unsecured debt.

It's up to you but keeping it simple and defaulting everything will give you the best chance of success.

Altior

I can hedge for the time being, at least until my UC issue is ironed out, and the SMI ball is properly rolling. And then revisit the debt scenario.

Altior

One of my cc accounts just hiked my standard interest rate by 4%!

The letter seemed to indicate that this was a bespoke decision, based on my profile. It talks about going up again if the base rate is increased.

It got me thinking, is this something that can happen generally once stopping payments and aiming for defaults and a DMP? This was not on my crib sheet of possibilities to account for to be honest!

Fortunately this particular account balance is under a grand and I was planning to clear it, anyway whatever approach I take.

ManyWays

You can reject this sort of increase by telling the lender to close the account, then you can carry on paying it off monthly at the old rate.

sourcrates

Debt management requires you to think outside of the box, what a lender charges you by way of interest is of no real consequence, on default the balance gets frozen, and the debt will usually be sold off pretty sharpish.

That balance will almost certainly be reduced by offers to settle, dependant on the company that buys it, some let you pay the reduced amount monthly, some via a lump sum.

Whatever the circumstances, hopefully you won`t have to repay the full face value in a DMP.

Altior

Small development in my personal scenario.

I made the schoolboy error of expecting things being run by the government to work as advertised. It appears that SMI processing has effectively ground to a halt. A member of a different forum has stated that they applied in November, and are still waiting for their application to be processed. Other people are saying that they can't now even get the initial forms sent out, which matches my experience. UC said that they would arrange for the SMI team to contact me and I've heard nothing since 3rd August.

There's three months' waiting to be eligible for SMI, so originally I expected that would be plenty of time to process the application before my mortgage charter interest only payments ran out.

I feel like I now have to account for paying the full mortgage payments, which when added to my priority spending, pretty much takes up all of my income (when UC finally fix my LCRWA element!).

Given the above, I may well now need to take the approach that everyone feels I should take, and defaulting on the £20K! December is the cut off point really for that particular decision, I can make minimum payments until then.

At least one positive development, TCB/CSD finally sorted their issues out and paid the cashback I was due on £1K holdings, which has taken the immediate pressure off of my cashflow, as with the cashback that has freed up £1.3K of liquidity.

Altior

I noted previously that one of my credit card accounts stated that I would retain promo rates, even with missed payments. I have decided that I am going to skip the next contractual payment on that account, and that will actually be the beginning of my dmp 'journey'. Definitely not confident that I won't lose the promo rates in actuality, but I may as well go ahead and test the theory, not much to lose whilst all of my other cc accounts are 0%. I've cancelled all of the DDs a few months ago and currently just paying the minimum payments as they are being requested.