£68k debt... Time to bring it down... DMP?

fatbelly

The uncertainty of what creditors might do is often cited by those trying to push someone towards insolvency. Usually IVAs rather than bankruptcy.

But we know pretty well what creditors will do when the debtor is repaying over a long timescale. They default, probably use a collector for a bit, then get tired of it and sell the account to someone who pays 6-16% for the debt. You are then dealing with someone who is prepared to make some sort of deal.

Court action is usually taken when the debtor is paying nothing and the debt is heading to the six-year mark and/or there is a way of enforcing the judgement against property they own.

RAS

fatbelly's got more experience than me, but my observation from years on these forums are the same.

Creditors may not get round to doing anything to prevent a debt becoming statute barred but there's a steady stream of folk rattled when a debt collector starts threatening legal action 6-8 months before the deadline.

Typically it's one of the new breed who buy huge tranches of poor quality debt for a pittance and use bulk threatograms to gain most from least effort.

If you are already paying regularly, you're unlikely to be in that tranche.

sourcrates

I think fatbelly has given you some really good advice, and makes a strong case for the informal approach.

Tigzzz

Ok guys thanks, I can see my path going forward more clearly now.

I just have three questions.

1. I could clear the NatWest or Monzo overdraft by taking out cash on a credit card, for the purpose of not having to wait longer for it to default as I've read they can take longer. Is there any benefit in doing this, or would a letter asking them to backdate the default to 3-6 months after missed payments as per guidance work, or could they just refuse anyway? Not clearing it would help a lot with building my initial EF.
2. If I leave the NatWest od maxed out, they will be the creditor for 50% of my whole debt, nearly ~£35k. They are also who my salary has been paid into my whole life. Would they use the fact the total debt with them specifically is such a high amount, and knowledge of my income/outgoings throughout my life, penalise me in the sense they would be less likely to sell it on and instead pursue me for as long as possible and paying them as much as possible? Or am I overthinking.
3. I booked flights and hotels on my Halifax CC many months ago for the wife's trip back home in December. I also added her as an additional cardholder (nothing joint) as it has no foreign fees (seems silly now to try save a few £ when interest will be ridiculous) and told her to use it if she needs to book any hotels, internal flights or rent a car. I don't want her trip to be affected in any way by me cancelling the Halifax DD next month. Not sure if I should wait until she's back, or just cancel it and tell her to use one of her fee paying cc if needed.

Thanks.

fatbelly

Just walk away from Nat West. The time for debt juggling is over. Yes you are overthinking

Cancelling the direct debit won't cancel the card. How close is the balance to the maximum?

Tigzzz

Ok I'll leave the od maxed and start the EF.

£6k/£10k so still a bit left.

Tigzzz

Posting for future reference if it helps anyone as I've spent hours and hours reading everyone's DMP experiences on here and it's helped me.

New accounts opened with Nationwide which will become my main. New SIM and email for all accounts in debt. Re jigged debt to clear the Monzo o/d as not worth losing them forever for the sake of £2k. All direct debits for debt cancelled. Daily spending will continue on cc until end of month so I can build an initial EF, but from Nov 1 everything will be debit only!

Then the fun and games will begin waiting for defaults and the expected avalanche of attempted comms from the lenders. Good luck to them, as I'm the one in control now.

I won't be doing regular unimportant updates, but will post if something important happens/need advice and keep it all in this thread.

Thanks all.

SpireCaptain

https://forums.moneysavingexpert.com/discussion/comment/82170961#Comment_82170961

Fantastic proactivity. Good luck. Will be cheering along from the side. 👍