DMP Mutual Support Thread - Part 7

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  • BB7 wrote: »
    Can some one please tell me if DMP is the best option for me should i use a charity organisation or payment agency. I have been told that the C-Organisations work for the creditors. I have debts to HSBC for loan overdraft and credit card total of 14000 and another 6500 to capital one total depts 20500. I lost my job January 2009 and was receiving JSA until April 2010. I have not been able to find another job and have decided to go self employed. I am earning around 1100 a month with 240 left to pay debt's. I have sent a letter to all my creditor and a budget household sheet explaning my circumstances on the advice of citizen advice because dmp can't help me till i have been trading for 3 month's. I am terrified of what will happen next none of my family now about this i own my own home i am scared the creditors will take my home. Please can someone tell me if they can do this. I AM SORRY IF I HAVE PUT THIS ON SOMEONE ELSE'S THREAD IT'S MY FIRST TIME AM NOT SURE HOW TO USE THIS FORUM....


    I woud say this- don't get confused about a DMP- at the end of the day these are informal arrangements and can be used until you can pay more back, or to settle all your debts. However if you cannot afford to pay off your debts within a reasonable time frame then you might need advice on some of the other options eg an IVA or bankruptcy.

    What has become very clear to me is that ALL the advisers have a vested interest somewhere. The charities in my cynical view are collecting debts for creditors as they are partly funded by them yes, with the exception of CAP (Christians Against Poverty who I would say offer the most unbiased of views but are snowed under with work).
    AN IVA should not be entered into lightly, but what you need is someone who will give you the right advice for you.

    I would be tempted to say go to a charity and get a DMP in place, and use it to tide you over until you can see what you are likely to be earning long term. My reservations are that you owe alot of money to a bank and these are pretty bad creditors with little sympathy for debtors, They are most likely to issue a CCJ and most likely to ask for a charging order- so despite the fact they cannot run their own businesses they are still pretty pants to deal with.

    They might accept payments from a DMP for a while but in the longer term I suspect they will want more than you are offering and will start to rant.

    I am sorry this might sound very depressing but had someone been this honest with me initially, it would have helped my decision making process somewhat more. It's good to get some help as they deal with all the creditor correspondence etc but as Britain seems to be enduring a number of people who are all in the same boat, it seems to me creditors are also getting more and not less demanding sadly. But there will be a way through this- I am biased and would say again that CAP who are funded entirely by donations, are professional and offer solid advice, but you need to find an organisation you are happy with.

    all the best!
    now debt free and determined to maintain good spending habits and build savings
  • katkins2
    katkins2 Posts: 65 Forumite
    Awww, thanks all for your support. This board is such a tonic when you're feeling down :beer:

    I'm going to knuckle back down next month and keep a spending diary again to try to stop me dipping into the 'emergencies' fund. I know I've done it before so can do it again.....just need to refocus.

    Only 2 weeks til payday, really need to stop wishing my life away lol....now where did I put those cup-a-soups????

    Thanks again, u r all stars:D
    LBM 22/7/2009
    DMP start 01/9/2009 :eek:£35686.00 :eek:
    DFD September 2017
    25/3/2010 - New DFD August 2018 :eek:
    20/7/2015 - New DFD January 2017 :cool:
    DEBT FREE August 2016!!!!:beer::j
  • Triggles
    Triggles Posts: 2,281 Forumite
    It's just so sad I have to laugh. MBNA decided to stop interest and charges on ONE of our TWO accounts "due to our circumstances"... the one with the smaller balance. Apparently our circumstances are different for the larger balance as they won't do it for that one. And then a week later, they defaulted the one they had stopped the interest and charges on. Ironic? Annoying? :mad: Rather frustrated that they sent us a decent letter saying they were stopping the interest and charges, making us think "oh thank goodness finally something's going well!" and then a week later they default it. So it didn't do anything for us at all. As I said, it was so ridiculous, it just made me laugh. (DH probably thinks I'm crazy as I thought it was a bit funny!) I think it's because it's along the lines of "I've just seen everything now..."

    On the other hand, DH & I sat down and had a good long talk about the DMP. We've agreed that we've been a bit slack and could be working harder to clear the debts, so we're doing a challenge between us to clear 3 debts by Christmas. We've got a fairly decent budget for groceries (as we have an infant on formula and 2 still in nappies, albeit the older is only in nappies at night), so we're going to be as frugal as possible and save what we can out of our grocery budget each month, and then offer F&F just before Christmas on our 3 lowest debts and hope for the best. We're also going to scrimp and save in any ways we can think of and do some ebaying as well. We figured that the chance of clearing 3 debts by Christmas is a big motivator for us, and that puts us in a possible position of having that huge morale boost to start out 2011 with 3 of our debts taken care of. The grocery money will be taken out in cash regularly throughout the month, and what is leftover at the end of the month gets put directly into the savings account. We're hoping that actually SEEING the cash being saved and put into savings physically will make it seem more real and keep us enthused about it (as will watching the savings grow).
    MSE mum of DS(7), and DS(4) (and 2 adult DCs as well!)
    DFW Long haul supporters No 210
    :snow_grin Christmas 2013 is coming soon!!! :xmastree:
  • katkins2 wrote: »
    Hi folks,

    Not been around for a while as my DMP has been plodding along ok. Just spent the last couple of hours catching up on the posts and found you've moved to this shiny new thread.:j

    Well, its almost a year since my LBM, can't quite believe it tbh. I was so focussed and motivated to begin with and all was going well up until the last couple of months, not too sure whats happened since then!!! I've been completely RUBBISH at budgeting these past 2 months and am already skint with payday 2 weeks and 1 day away!! I'm just so bored of it all. I know that's a terrible attitude to have and I really need to rein myself back in and fast!

    Does anyone else get like this? I know how to budget and was living well sticking to it, its just all suddenly gone out of the window. Think I may have to take myself back to day one and get the old spending diary out.

    I'm so annoyed at myself for letting things slip....please feel free to give me a shouting at.....I think I need it lol!

    And for any newbies reading this, please ignore my moaning, starting a DMP was THE BEST thing I could've done, even if I do need keeping in order now and then:rotfl:

    Hope everyone's having a good day:D

    We have all been here. Most of us probably got paid before the May Bank Hol, Which makes June 5 weeks long! It's very easy to think you have this thing 'cracked' and lo and behold something else turns up. Even if it's that thing you can't quite put your finger on... that's why I stay well clear of shopping centres and any place that may tempt me.

    Having said all that is any purchase comparable to that feeling of dread when you know you will be living on '2 eggs beaten up in a cup' (that's an NI thing!). Translation: you are in a world of poverty until the end of the month...

    Thanks for being honest. :T

    ttfx
    :j:hello::hello::jDMP mutual support thread member 348
  • Triggles
    Triggles Posts: 2,281 Forumite
    edited 13 June 2010 at 12:56AM
    Just a quick question for anyone that has some knowledge on defaults and such. We've received default notices from a couple creditors (although we are still making our reduced payments every month by standing order). These creditors are still charging us interest and late fees (and any other fees they can, such as "debt collection letter fee £12" from Additions every month!), and we are still getting statements from them asking for payment, along with demands for payment from in house and possibly independent DCAs. Are there laws about when they can and can't charge further interest and charges on an account? I thought once they defaulted it that they couldn't, but obviously that's wrong as a number of them still are.

    I also have to amend my letter to MBNA/Virgin as I have received in that last month letters from no less than 3 different agencies regarding the same account, all demanding payment. This is just a bit of overkill IMO.

    In looking back through my Santander/Abbey credit card, between 24 March and 07 April 2010, they sent me 15 pieces of correspondence, 7 of which were default notices for the same account (with slightly varying amounts), almost ALL of them were listed as being from the same person. I would have thought this would be considered harassment. I did send a letter to this person, but received no reply, just more form letters. They then switched the account to their in house collection agency, and without warning have now (apparently) sent it to 1st Credit (again without advising me of this). Another letter I had typed out, but now have to modify a bit before sending on Monday.
    MSE mum of DS(7), and DS(4) (and 2 adult DCs as well!)
    DFW Long haul supporters No 210
    :snow_grin Christmas 2013 is coming soon!!! :xmastree:
  • suze72
    suze72 Posts: 209 Forumite
    Triggles wrote: »
    Just a quick question for anyone that has some knowledge on defaults and such. We've received default notices from a couple creditors (although we are still making our reduced payments every month by standing order). These creditors are still charging us interest and late fees (and any other fees they can, such as "debt collection letter fee £12" from Additions every month!), and we are still getting statements from them asking for payment, along with demands for payment from in house and possibly independent DCAs. Are there laws about when they can and can't charge further interest and charges on an account? I thought once they defaulted it that they couldn't


    Hi Triggles

    Unfortunately your creditors can carry on charging you and applying interest after issuing a default.
    A default notice simply means that a record of your debt will be placed on your credit file, which is why it's obviously better to get them sooner rather than later. It also means that your creditor can take further action to recover the debt if they wish to.
    If it's any consolation, in my case, most of my debts were with HSBC who were absolute pigs, but not long after issuing default notices on my accounts, they passed the debts on to Metropolitan who immediately stopped all charges and accepted the DMP payments and I've had no trouble from them since.:T

    Hope that helps
    Sue x
    Debt free Olympic Contender # 134
    DMP Mutual Support Thread member # 250
    DMP March 2010 [STRIKE]£9786 [/STRIKE] now £990 :)
  • Triggles
    Triggles Posts: 2,281 Forumite
    Suze - thanks for that info. Quite a few of them have issued default notices, but held on to the account, adding an average of 2-3 charges plus interest each month. Our payments aren't even able to cover that! The only one that (we think) has gone to an outside DCA is the one that has gone to 1st credit, and we still haven't received verification of that, and the original creditor is still adding charges and such, so I'm sending them a letter Monday requesting specific information on where the account is and what's going on with it.
    MSE mum of DS(7), and DS(4) (and 2 adult DCs as well!)
    DFW Long haul supporters No 210
    :snow_grin Christmas 2013 is coming soon!!! :xmastree:
  • cocker100
    cocker100 Posts: 518 Forumite
    edited 13 June 2010 at 5:50PM
    suze72 wrote: »
    Hi Triggles

    Unfortunately your creditors can carry on charging you and applying interest after issuing a default.
    A default notice simply means that a record of your debt will be placed on your credit file, which is why it's obviously better to get them sooner rather than later. It also means that your creditor can take further action to recover the debt if they wish to.

    Not strictly correct!

    There has been lots of debate regarding what a creditor can or cannot do once a default notice has been issued against an account.

    A default notice is issued to the debtor if they break any of the terms and conditons of a credit agreement. By not paying your mimimum monthly payment, you are in breach of the agreement and the creditor therefore has the right to terminate the contract between you. To do this they must first issue you with a valid default notice under section 87 of the Consumer Credit Act 1974.
    If the debtor fails to rectify his/her breach (ie. they fail to bring the account up to date) within the time allowed on the default notice (minimum 14 days), the creditor can then terminate the agreement and demand full repayment of the entire account debt.

    If they (the creditor) do then go on the terminate the agreement, then IMO they are not permitted to add any extra interest or charges to the outstanding balance without taking action in the court. This is because the creditor relies on the terms and conditions of the credit agreement in order to be allowed to charge interest and charges etc. Once this agreement ends (because they have terminated the account) there is no contract left in existence to allow them to keep adding extra interest and charges, therefore any they do add are unlawful.

    However some creditors fail to adhere to the rules and continue to add interest in the hope that the debtor does not know his/her rights.

    So yes, a default in itself may allow a creditor to continue adding interest, however if this is followed by confirmed termination of the account, then they are no longer allowed to do this. This is my interpretation of the law following extensive reading up of cases on the Consumer Action Group website.

    Also it is vital to remember that many creditors issue invalid default notices and go on to terminate agreements on the back of them. If this happens, then they are on a very sticky wicket indeed, as they would then be only allowed to claim the arrears on the account at the time of default. (Which is ususally 2-3 months of missed payments). This is because by doing this, they are unlawfully recinding the agreement and are subsequently in breach of the original contract. Again, many creditors will argue that they are playing by the rules and that the full amount is still repayable, however should a debt ever get to court, an invalid default notice is a complete defence to any claim made against you. There is case law that backs this up!:D:T

    Here's an excellent link for information on this subject:

    http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/196312

    Cocker:)
  • cocker100
    cocker100 Posts: 518 Forumite
    ........or Google invalid default notice cag
  • Hi Cocker

    Your thread was very interesting and informative to read. Basically I received a letter from Halifax dated 27th May 2010 stating that a Default Notice had recently been issued as I had failed to pay the requested amount by the date shown in the notice. This Default Notice was never received !
    The letter dated 27th May also states that my account is now closed and will be passed to a DCA within 7 days. As of today 13th June it is still with the original creditor who continue to telephone me daily and have added £72 in charges to my account only a few days ago.
    According to your information this is not correct and therefore I have a bit more ammo to pass over to The FOS. Am I correct in thinking this ? I would be very grateful if you could give me an idea of what to put in the letter to the FOS.

    Thanks in advance
    DMP mutual support thread member:327
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