In a current DMP but should I change tactics?

Debtdad3493

Hi all,

Have been trawling the forums for days trying to find the right answer or advice to my situation but can’t find anything specific amongst the brilliant info, so here goes….

I’ve been in a DMP for 2 years now with a total debt of £41k left to pay (originally £50k) - at the current rate it will take me another 9 years to clear but having gained promotion at work I will be able to essentially just under halve the 9 years to 5 left by increasing payments and possibly even coming to some settlement agreements further down the line.

I am worried I may have rushed into the DMP and not waited for the accounts to default first because out of my 10 creditors only 6 have defaulted and the rest haven’t (2 are credit unions).

So my 3 main question are:

1. Do I stop paying the DMP for a while so I can let everything default then I know it’s a maximum 6 years from the date the last default happens before things improve?

2. Or do I continue to pay and hope they eventually default?

3. Or do I self-manage and only pay the defaulted ones?

I have recently submitted affordability claims to all of my original creditors as well. Should I stop paying until they reply?

I’ve read some horror stories about people getting to the end of a DMP then at the last few months they get a default or AP marker almost an FU from the creditors, which is fair enough I suppose.

I want the end of the DMP to be the end of my problems or within a year of it ending so I don’t know what to do. StepChange aren’t really able to offer advice on this because they won’t specifically recommend stopping payments or allowing defaults so I am turning to here for real life help please.

I don’t want this to ruin me forever and I’m determined to pay it back and eventually work towards a mortgage etc.

(I looked at other solutions like a DRO or bankruptcy but I would be at high risk of losing my job and rental agreement).

I am not trying to shirk the issue and willing to pay back what I owe but I’m just trying to take the right actions now so it doesn’t ruin me for longer than it needs to (willing to go self managed if suitable and open to all options really)!

thank you

ManyWays

Can we see a list of the debts that have not defaulted: lender name, rough balance, minimum payments pre the DMP, payment they are getting from Stepchange now.

Also a separate list of the debts that have defaulted: lender name, rough balance remaining.

Have you looked at making affordability complaints about the debts in the DMP? Only 2 years in, there is still time to make these but you need to do this soon.

Debtdad3493

These are the ones that haven’t defaulted yet:

1ST CLASS CREDIT UNION LTD loan £51.26pm - £16.4k left

PLANE SAVER CREDIT UNION LTD loan £51.26pm - £6k left

LINK FINANCIAL OUTSOURCING (Fluid Credit Card) £21.97pm - £3.7k left

MONZO overdraft - £8pm - £890 left

Marbles Credit Card £12pm - £1075 left

DEFAULTED ONES:

LENDABLE UNSECURED LOANS £48.50pm - £6.1k left

LANTERN DEBT RECOVERY (118 money loan) £23.63pm - £2.2k left

CAPITAL ONE (EUROPE) LTD credit card - £9pm - £1.3k left

LOWELL FINANCIAL LTD (Vanquis Credit Card) £7.73pm - £1.2k left

MONZO Flex credit card - £24.50pm - £2.6k left

PRA GROUP (UK) LTD (barclaycard credit card) - £5pm - £575 left

Figures above are probably slightly out as taken from previous statements but rough idea is, Total debt is £42k left currently paying £300pm - with promotion I am going to increase this to £550pm in New year when the wage increases kicks in which would bring me down to between 6-7 years left.

I should add that this debt was initially built up by surviving on credit after job loss of £50k salary and unable to find employment for over a year then family emergency which required me to pay for something on credit due to insurance not paying out.

I have submitted affordability complaints to all these lenders 3 days ago.

thank you for your help!

ManyWays

Good move to submit affordability complaints. All the loans including the CU loans should be sent to the Ombudsman if they are rejected.

Did you make a single complaint about Marbles and Fluid? That to should go to the Ombudsman.

And I would say Monzo Flex, Vanquis and Cap One. The barclaycard and Monzo overdraft look too small to be worth it (others may disagree.)

You can complain and say a default date should have been added in the first six months of the DMP. But I wouldn't bother until you get the affordability decisions.

BUT I would not up your DMP payment in the New Year; it would be better to save up that extra £200 and use it to make settlement offers. They will end the DMP sooner.

Debtdad3493

thank you @ManyWays I appreciate the help!

What action should I take next…Should I keep paying only the defaulted ones and pay the others later or should I just carry on as normal?

Or 3rd option to stop paying everything completely until affordability complaint outcomes and all defaults come in?

thanks!

ManyWays

I would just carry on with the DMP while the affordability complaints wind slowly though, a lot may have to go to the ombudsman. Then at the end make a complaint about any on the non defaulted ones you did not win the complaint, saying you want a backdated default added.

I do not think there are any hard rules about this sort of thing. There are a lot of options and you do not know how some will work out.