Help needed - about to start DMP but being chased

overthehead · 22 January 2020 at 12:31AM

Hi, all, I initially posted most of the below in the mutual support forum but have been chased again today and it's causing me a fair amount of distress.

I have £32k of debt, 4 credit cards, 2 store cards, plus an overdraft and 2 loans - one with my former bank (I switched to a new account before I kicked off the process) and one with the local credit union - the latter being by far the most expensive with the worst rate. Having decided that a DMP was the best bet after using all of the online tools and getting my SOA / I&E sorted, I have settled with SC but won't be setting up until the end of May / start of June as I have a number of bills to pay, things to get fixed and family members to repay etc. I also need to rebuild an EF. I stopped all payments in December and have been sending regular, polite letters to keep all of my creditors in the loop. Most have responded and I've been surprised at how supportive and cooperative most have been - I suffer from anxiety from time to time and the thought of speaking to anyone on the phone about this was causing me real trouble. A couple have even threatened to default me already, which is good news I gather? I wrote to all asking to take my number off their system and only deal with me in writing and this hasn't been an issue with any of my creditors, thus far, or so I thought.......

I received a couple of unsolicited calls from the Credit Union a fortnight ago and have now been receiving emails from them every couple of days telling me that they don't accept DMP's, want to work with me to restart payments ASAP and will escalate things if I don't communicate with them. More worryingly, I had a missed call from them on my mobile at work yesterday, despite me telling them clearly to stop calling me in my latest letter. It's causing me a lot of distress, and I really don't know what to respond with - they keep telling me that they want to understand why I've stopped making payments but I can't just tell them I've stopped paying to build up an EF, so I really don't know what to say. I already feel guilty enough about this one as it is a credit union, however, in hindsight it is the most unaffordable debt I have and is the debt I regret the most. Some advice would be very much appreciated

Also, I've not yet physically spoken to anyone at SC yet, but have been keeping my Debt Remedy account updated every couple of weeks or so to keep the reference fresh. A couple of my creditors have asked for the ref number - is it okay that this is just based on the Debt Remedy ref or is it advisable for me to speak to someone? I wasn't intending on doing this until I start the application process later in the year.

Thanks and sorry for the rambling post but things are really playing on my mind now, my first real wobble I suppose

-taff · 22 January 2020 at 12:19PM

Did you include the credit union in the round of letters you sent out to tell people you were stopping paying? If you didn't [although from your wording I'm gussing you did..?], and you're not going to be paying anything to anyone for six months I can understand their frustration at not having a reason why you have stopped paying. They can still pursue you for the debt using other means unless you agree a payment plan with them, so it's in your best interests to write to them again, tell them about your payment difficulties and work with them to find a mutually agreeable solution. No need to answer the phone to them, No need to respond to emails. However, be aware, that a DMP is not a guarantee that they won't still pursue you legally for the debt which is why you really should talk to them as soon as you can.

This was not a secured loan was it?

overthehead · 22 January 2020 at 12:46PM

-taff wrote: »

Did you include the credit union in the round of letters you sent out to tell people you were stopping paying? If you didn't [although from your wording I'm gussing you did..?], and you're not going to be paying anything to anyone for six months I can understand their frustration at not having a reason why you have stopped paying. They can still pursue you for the debt using other means unless you agree a payment plan with them, so it's in your best interests to write to them again, tell them about your payment difficulties and work with them to find a mutually agreeable solution. No need to answer the phone to them, No need to respond to emails. However, be aware, that a DMP is not a guarantee that they won't still pursue you legally for the debt which is why you really should talk to them as soon as you can.

This was not a secured loan was it?

Thanks so much for your reply taff. I did include them in my original round of letters, as well as all that have followed. It's an unsecured loan.

I'm happy to contact them in writing but I'm a bit unsure about what a solution with them would do to the rest of the DMP? Their payment alone took up over a quarter of my monthly income and paying even close to this amount would cause me issues and potentially put me in a rubbish position at the start of my DMP. I've stripped my costs back as much as I humanly can already (which has been a difficult first step but which I've thankfully maintained, even through the Christmas period).

The loan repayment also required a monthly contribution into a savings account (shares) with the union, so there's over £1k in there that they can use to offset. Would they accept a token payment until the DMP starts? They've made clear that they prefer not to deal with DMPs owing to the 'reduced payment' so I'm concerned that they're going to be resistant to any reduced payment. Thanks again, and sorry for my anxious ramblings!

sourcrates · 22 January 2020 at 1:22PM

Creditors can be vocal from time to time, don’t let it bother you, if they don’t accept debt management, then all they will do is sell the debt on.
The letters are just part of a standard range, with standard wording, they send out to all non payers, just let it take its natural course.

Don’t worry about what creditors may or may not do, very few take legal action, most just off load bad debt to debt purchasing companies, who will accept virtually any deal.

overthehead · 22 January 2020 at 1:35PM

sourcrates wrote: »

Creditors can be vocal from time to time, don’t let it bother you, if they don’t accept debt management, then all they will do is sell the debt on.
The letters are just part of a standard range, with standard wording, they send out to all non payers, just let it take its natural course.

Don’t worry about what creditors may or may not do, very few take legal action, most just off load bad debt to debt purchasing companies, who will accept virtually any deal.

Thanks so much for this Sourcrates, it's put my mind at ease a bit. I'm getting the standard letters from everyone else and am doing just that - receiving, filing and continuing as planned. The issue with the emails I've been receiving from the Credit Union is that they are a lot more personal and based around wanting to 'work with me' - they feel very different and I'm concerned about just ignoring these ones. Would you recommend offering a token payment until the DMP commences, or to respond by explaining I am having difficulties and reaffirming that my DMP will commence at the end of May?

sourcrates · 22 January 2020 at 3:50PM

If they don’t accept DMP’s, I suspect they won’t accept token payments either.
You need to be clear with them, that you cannot afford the contractural payment, and that, like it or not, you will be entering debt management shortly.

Write to them, inform them of the above, and ask what there intentions will be under these circumstances, may as well be upfront about it, then your not second guessing are you.

overthehead · 23 January 2020 at 9:26AM

sourcrates wrote: »

If they don’t accept DMP’s, I suspect they won’t accept token payments either.
You need to be clear with them, that you cannot afford the contractural payment, and that, like it or not, you will be entering debt management shortly.

Write to them, inform them of the above, and ask what there intentions will be under these circumstances, may as well be upfront about it, then your not second guessing are you.

Thanks again Sourcrates, this helped a great deal last night. I actually received another passive-menacing email from them yesterday with a deadline, so much as I'd rather have a clean paper-trail of letters, I sent an email back to inform that my situation had changed, that I couldn't afford the contractual payments and that debt management is happening shortly. Thanks also for the tip about asking for their intentions - I've done so, and will wait with baited breath to hear from them today.

I've also told them that I'm happy for the savings I had built up with them, as part of the loan arrangement (and locked in until the loan was cleared), to be offset against some of the debt. No idea if this was the right thing to do but at least I'm showing that I'm willing to be reasonable!

Thanks again for all your help everyone - I'll keep you updated

Help needed - about to start DMP but being chased

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free