Baby steps to get out of debt, help

[shaggie44]

Afternoon Guys,

I have finally decided that it is time to stop the cat and mouse game with creditors, and face the music.

Background: I have debts from 2-4 years ago when I was a student and became unemployed that are still hanging over me. Through a mixture reluctance/inability to deal with the debts and moving house, I lost contact with the companies that i owe debt to.
My debts range from bank overdrafts to credit cards in total they are £10kish.

Action: I decided to request my credit file today, and noticed most of the debts had been sold on to companies like Lowell and MKDP LLP.
My intentions are to pay off what I owe through Step Changes DMP.

Questions are:

1. Is going through Step Change's DMP the best option? I also do not know the account numbers for some of the accounts how do I get round this?
2. Is it worth sending a prove it letter to all the companies on my credit report, even though they have not contacted me because I moved house and did not change details?
3. There are 2 debts in particular that are puzzling me, both are owed by Lowell and show up on the credit file, but these debt are being claimed by Scotcall and BPO collections.

May any of you gurus please help point me in the right direction.

[Kati]

Re: Baby steps to get out of debt, help

Hi shaggie to LB!

I'm sure you will get lots of help and advice from my fellow Beagles :beagle:

Kati x

[shaggie44]

Re: Baby steps to get out of debt, help

Hi, Is there anyone out there who can share their 2 cents on my post? Any help is appreciated.

[Guest]

Re: Baby steps to get out of debt, help

HI we would really need more information regarding the debts, personal circumstances etc.

10k is not a huge amount, in the scheme of things. But of course it depends on how many creditors it is split between , who they are, how old the debts are etc.

If you decide to go with a DMP you will need some disposable income, you don't say iif you are working or not at the moment.

If you can give us more details of the status of the individual debts and your current financial situation we will be better able to advise.

[shaggie44]

Re: Baby steps to get out of debt, help

Hi Andy

I am currently employed on £15k per annum. (My partner is about to finish paying her debts and is on maternity pay, therefore I left to shoulder most of the household costs. Based on my current situation i can just about spare £50 disposable income

These debts do not include student loan.
Debts are split between 4 companies:
Lowell (3 accounts) £5k
MKDP LLP (Credit card- original debt is marked closed, but they seem to have bought it) £2k
Capital One £1k
Lloyds Bank (authorised overdraft still open) £2k

[Guest]

Re: Baby steps to get out of debt, help

Do you know when these debts were last acknowledge( either when the agreements ended or you made your last payment on them)

[Guest]

Re: Baby steps to get out of debt, help

It is possible to start a DMP witha s little as £50 per month for 10k i think. Although you will have to support this with a income and expenditure, statement.
They do this over the phone, all you need is the latest demands form the various creditors, and the account number of your bank, they will do the rest for you, they will have all the contact numbers on their data-base.

However it is as well just to check first that none of these debts are not either barred by statute and unenforceable or approaching this(six years old.
Once you have declared the debt to the DMP provider you will be obliged to include them in your plan and this means that the SB date will be reset.

[shaggie44]

Re: Baby steps to get out of debt, help

Lowell (3 accounts) £5k

• Credit card No inform on credit files (Default June 2012)
• Phone No inform on credit files (Default May 2012)
• Very No inform on credit files (Default Feb 2012)

MKDP LLP (Credit card- original debt is marked closed, but they seem to have bought it) £2k Last Payment No inform on credit files (Default May 2012)
Capital One £1k Last Payment Jan 2011 (Default May 2011)
Lloyds Bank (authorised overdraft still open) £2k Active overdraft facility.

[Guest]

Re: Baby steps to get out of debt, help

I take it the overdraft is still incurring interest ?
Can i ask how much it is costing you am month to service it or is it just increasing monthly.

[Guest]

Re: Baby steps to get out of debt, help

Interesting that the Lowell debts do not seem to be on your credit file, can you remember roughly when your last payments were made on these accounts, irrespective of the default dates quoted.

[shaggie44]

Re: Baby steps to get out of debt, help

The overdraft costs roughly £40 monthly, OD has a limit of £2.5k

[shaggie44]

Re: Baby steps to get out of debt, help

With regards to the Lowell debts, these do appear on credit files. What does not appear is the history payments or last payments just default statuses. Sorry for the confusion.

[Guest]

Re: Baby steps to get out of debt, help

Its OK just trying to get a clear picture.
So if you went on a DMP and the froze the interest this would make you 40 per month better off, did you include this in your calculation regarding your available disposable income ?

It would be an idea to try and remember when you had the three accounts currently with Lowell, they do have a history of buying debts which are nearing SB.

[shaggie44]

Re: Baby steps to get out of debt, help

I very much doubt that they would be near SB, as all of these accounts were opened around jan 2010. Although one of the Lowell acc was Oct 2008, credit file says Reported until Feb 2018.

I live in England if it helps.

[Guest]

Re: Baby steps to get out of debt, help

I think you may have done this already, but if not , you need to do a spreadsheet with all you income and outgoings on it, include all your incidental essential expenses, travel costs hair cuts etc., then see what you disposable income is.

You can then phone your provider, I generally recommend payplan, but i understand that step change are equally as good if not better.
They will try and talk you into a IVA, personally I would not touch one with a barge pole, they tie you into an arrangement and there is no guarantee that the debt will be expunged after the term no matter what they say.
With a DMP once set up you can review your repayments up or down as your available income alters. so I would stick with a DMP. Usually they will give you a reference number on your first cal and arrange for a case worker to ring you back for your financial details, when you get the number you can ring your bankDCA and tell them that you are suspending payment and that they will be receiving an arrangement plan from the DMP supplier, they should give you 30 days breathing space before they bother you further.