DMP - advice needed

Exhibit07

Thank you for your advice everyone.

Just to get this straight in my head I just need to stop paying and not set up a DMP straight away?
Will there be a possibility of court action if I do that?
is there also a possibility of bailiffs?

ArtyJ931

from someone over 6 months in I would say no - there is no chance. I’m still waiting for things to default and some lenders have only sent a couple of letters.

RAS

Forget bailiffs. They are vanishingly rare for consumer debt and only way down the line if you persistently ignore court rulings.

And no one can take legal action until the debts are defaulted. It costs, so lots of effort is made first to get payment by persuasion at nil cost.

Rob5342

Legal action can't be taken until the debt defaults. Once defaulted then the original creditor is able to take legal action if they wish but in most cases they will just sell the debt to a dca. DCAs employ a range of tactics, usually starting with a friendly we can help you and then gradually increasing the threat level if you don't engage. At some point they could take legal action, if you are unlucky this could be early on but most of the time it will only be when you have totally ignored them and every other tactic has failed. They buy debts in bulk for a small fraction of their value knowing they are owed by people that can't afford to repay them quickly, so their business model is based on getting small payments over a number of years rather than taking legal action on everything. If they do go for a CCJ then the court will just set payments at a level you can afford so it's no problem to you really, and also the companies involved know this so they don't want to waste their time talking legal action on a load of debts to just get the same repayments. Bailiffs can only be sent after a CCJ had been granted and when you haven't made the specified payments, so they are a very last resort if you have completely ignored everything else. A lot of people aren't aware of this and dcas take advantage of this by making vague statements like "further recovery action" to try and make people think a bailiff will turn in a few days if they don't contact them immediately. DCAs can send people to your house to discuss your debt if they wish, it doesn't happen very often but they aren't bailiffs and don't have any powers and you can just tell them to leave or not even answer the door. Officially that's to help you get in contact with them but the real reason is to scare and intimidate people into paying.

People often worry about DMPs but most of the time they go very smoothly and people just pay what they can afford without anything else happening.

sourcrates

You`ll be quite "under whelmed" just how little these companies care about whether you pay your debts or not.

Collection activity is all computer controlled, letters/calls/texts/emails, all sent automatically, and all worded quite ambiguously in order to obtain a reaction form you, the reaction they are hoping for would see you on the phone to them post haste, well do not do that, propaganda at its finest.

Managing your debts is as simple as 1/2/3.

(1) stop paying, lets the lender know you are in financial difficulties for one thing, and allows you to save a bit of an emergency fund as well.

(2) Wait until most accounts have defaulted, those that don`t complain about, quoting FCA guidance that a debt should be defaulted after between 3 and 6 missed contractual repayments.

(3) Whoever writes to you asking for payment, set up a payment plan with them.

That`s it, that is debt management in a nutshell.

Exhibit07

thank you very much everyone I feel so much better now.
I have already started to cancel my Direct Debits to start the process.

I am keeping my Barclays account as I have no debt with Barclays.

Purchased a folder and notebook to keep track of letters and defaults.

Completed a SOA and written this down ready for my DMP.

Is there anything else I am missing?

Grumpelstiltskin

Does your account with Barclays have an overdraft facility?

If so there is always the danger you will slip into it, that's why we advise a basic account without an overdraft facility.

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/82170837#Comment_82170837

You could start living on your budget now so make sure it's sustainable, and put the money you have alocated for dmp payments into an emergency fund.

You could also look at making affordability complaints about your debts, these can can take a long time to be resolved so the sooner you start the better.

Exhibit07

I will start saving the money StepChange recommended for debt payments to create an emergency fund that’s a good idea.

it does have an OD facility but I will ask for it to be removed as don’t want anymore debt ever ever again.

Exhibit07

great idea about affordability complaints I have already done updraft so will do Monzo, Zopa and Norvuna now and use the debt camel template