DMP & Mutual Support Thread - Part 8

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  • BlushingRose
    BlushingRose Posts: 1,621 Forumite
    This may seem like a stupid question but...is it essential to send a token payment by cheque/postal order or indeed at all? I have been sending payments, albeit reduced, to my creditors for the last couple of months only to receive angry phone calls in return :(
    I feel really bad for one of my creditors who has been really good about stopping interest and accepting reduced payments - I feel certain they will receive much less on the DMP and wonder if they will continue to be as understanding?


    It's not essential, but I;d say that it shows that you're willing to still pay off what you can.
    With each token payment, enclose a letter to each creditor explaining that you're in financial distress and that you're only able to send token payments at the moment. Also tell them that you're in the process of setting up a DMP with whoever it is, and that you;d appreciate communication by letter only from now on.
    If anyone rings you, ask them to only contact you via letter, and hang up.
    Our LBM: Dec 2011. DMP started: Jan 2012. Debt at LBM: £41,568

    Oct 2012 = Current debt: £40,548.93
    Oct 2013 = Current debt: £39.054.70


    DMP Support number 424 - Long haul number 308
  • ianmak
    ianmak Posts: 1,125
    First Post First Anniversary Combo Breaker Debt-free and Proud!
    Forumite
    This may seem like a stupid question but...is it essential to send a token payment by cheque/postal order or indeed at all? I have been sending payments, albeit reduced, to my creditors for the last couple of months only to receive angry phone calls in return :(
    I feel really bad for one of my creditors who has been really good about stopping interest and accepting reduced payments - I feel certain they will receive much less on the DMP and wonder if they will continue to be as understanding?

    There are a number of reasons for token payments.

    1) To show willing, that you're not shirking your debts.

    2) To build up a slush/emergency fund before you start a DMP, and to prepare for the slog ahead.

    3) To make the DMP look better - if you're paying token payments to creditors of £10, and the DMP says to pay them £5, the creditors won't be happy. Tokens of £1-£2 will make a DMP payment of £5 look better than what they were already getting, if that makes sense!
    DMP mutual support thread No: 243
  • Indeed it was...thanks so much :) :T

    Yay! I helped! :D
  • Tigsmom wrote: »
    I sort of 'borrowed' yours as a template for mine :o (hope you don't mind!) It said everything I was trying to say in mine but around a page shorter! So thanks for saving me in paper and ink. :D

    My OH is now rolling around :rotfl: like this at the thought that I managed to be more concise than anyone. I'm not known for my brevity when writing letters normally. :)
  • Tigsmom
    Tigsmom Posts: 290
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    My OH is now rolling around :rotfl: like this at the thought that I managed to be more concise than anyone. I'm not known for my brevity when writing letters normally. :)

    Oh mine ranted on about how we got here, how good our past history was, what we plan to do to put it right....

    Then I thought 'are they really bothered?'. I've decided to keep the explanations for any subsequent letters that might be needed to persuade them further.

    I thought your letter covered everything and was written beautifully.:T
  • Hi TTFTM

    Yes if you check noddle you will see they do these soft searches. It's not like 'proper' credit as the risk is less. You stop paying one month they withdraw service the next.

    Hope you get sorted

    HHx

    Sorry HH, I think I rambled on too much and didn't really get to the point .... nowt new there! :o

    What we were worried about was them saying you have to pay it all in one go or you can't have car insurance.

    Do you mean that we don't need to worry about the credit check and they are likely to allow us to pay monthly despite our situation?
    LBM 10/1/12 ~ DFW Start 6/2/12: £82,344 ~ Now Zero
    :staradmin:starmod::staradmin Debt free 17th April 2015 :staradmin:starmod::staradmin
    Eternal thanks to the DMP & Mutual Support (no.439) and Payment a Day Threads
    Mortgage free 3rd July 2014 - Grateful thanks to the 2013/14 MFW threads
    "Debt is normal. Be weird!" Dave Ramsey
    Proud to have dealt with our debt :)
  • Tigsmom
    Tigsmom Posts: 290
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    What we were worried about was them saying you have to pay it all in one go or you can't have car insurance.

    I spoke to DH about this because I don't drive so car insurance is his thing. He said that the insurance companies are giving everyone high quotes at the moment (something to do with getting money back they've spent on floods) in the hope that we won't notice. This may have nothing to do with your credit rating. Have you tried shopping around to see if they're also high? I know credit searches affect your credit rating but if it's shot anyway does it matter?
  • bertman
    bertman Posts: 275 Forumite
    I got my latest statement from Halifax last night, this is one of the larger CC debts we have. So far I have heard nothing from them, I sent over a letter saying I was going onto a DMP and CCCS have also written to them. The statement had bold text on the front saying to pay the arrears now and that they could / would take any funds from another account that we hold with them, we have taken all the cash out of any accounts we had with them though so that isn't a worry. I rang them to explain that we were on a DMP and got through to a very helpful lady, she said that they had all the details and were arranging the payments through CCCS and not to worry about any system generated letters or statements.
    I find it very strange that all this is going on behind the scenes and I am not contacted on anything, I guess its probably the best way. I haven't had any calls from any company since the CCCS got involved. We really feel a lot better in ourselves, we can actually sleep at night now.....
    Debts as of June 2012 - £68,986.35
    Now £27,470.20 :T
    57% of debts cleared:beer:
  • Tigsmom wrote: »
    I spoke to DH about this because I don't drive so car insurance is his thing. He said that the insurance companies are giving everyone high quotes at the moment (something to do with getting money back they've spent on floods) in the hope that we won't notice. This may have nothing to do with your credit rating. Have you tried shopping around to see if they're also high? I know credit searches affect your credit rating but if it's shot anyway does it matter?

    I think perhaps the type of search they do is an 'enquiry' search to check you live where you say you do. Financial people checking your credit rating can't actually see these 'enquiry' searches.

    It wouldn't surprise me if they're inflating premiums to claw some money back.

    TtftM - if you ARE planning on shopping round, check Martin's guide on here and remember to check all the comparison sites he suggests, plus Aviva and Direct Line who aren't on comparisons, and then go through one of the cashback sites (quidco or topcashback) and see if the best you see on the comparisons are also offering cashback. This is a great opportunity to get your premium down and get some cash too. And also ask yourself if you really need all those extra bits. The only thing I would always add would be protected No Claims.

    Last time I switched my insurance, my premium (after cashback) worked out at £97 for the year! :T
  • 2spicy
    2spicy Posts: 338
    First Anniversary Combo Breaker Debt-free and Proud!
    Forumite
    edited 17 July 2012 at 3:16PM
    Re: Token payments, I would send anything between £1 and £5 (we sent everyone £1 with a covering letter and they were all fine)

    everyone said £1 to us ... We decided to pay everyone £25 each .. we did that for 2 months whilst the DMP was being setup.. this meant we actually had a "surplus" of around £4000.

    The £££ was then used to settle the Bank OD, to pay for car repairs / house repairs and a small break with Baby Spicy before we started the DMP in earnest
    LBM - Oct - 08 DMP Started - Feb -09
    Total Debt - £77,688 .00
    DMP Support Member - 259

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