To DMP Or Not to DMP

MeeBroke

Donedoingdebt wrote: »

Afraid so! Last payment on 16/02/2009. But this is still some 18 months earlier than planned due to being able to work excessive amounts of overtime.
Still have some credit card debt, but that will be the end of my "bad" debt. I'll update my sig. after Feb's payment.

So how can you have both credit card debt and bad debt? My understanding is that all debt has to be included in a DMP, and that you are not allowed to seek new credit during the DMP?

cozasmom

Very interseting post - as I was going to post the same questions - I have credit catd debt approx 16000K and until recently have managed to pay of minimum on nil percent balance transfers - but my husband has been ill for last four months and cannot see him being better for next six months, Now struggling on my wages - plus had to take a cut in wage due to current climate, to pay minium repayment. Have good credit rating and nver missed payments etc , but struggling at present. Would like to contact credit cards and ask for their help - but frightened in case they suddenyl stop and increase rates etc.. dont particularly trust them, Has any body had dealings in talking to them asking for help for say six months rather han go onto a DMP, as hopefully things should get better in next six months ..

Sorry if this is rambling ...

lxpeanut

cozasmom wrote: »

Has any body had dealings in talking to them asking for help for say six months rather han go onto a DMP, as hopefully things should get better in next six months .

Hopefully if you talk to them and ask for a temporary freeze they will be OK. My credit card were happy to freeze the interest and charges for 12 months. Give them a ring they can only say no and if they do write to them and ask the same thing you may get a different answer.

cozasmom

Did you stop all payments for 12 months or did you still have to pay ? plus did this effect your credit rating ?

Thanks for taking the time to answer - appreciate this

lxpeanut

I reduced the payments from about £200 a month to £15 as thats what I could afford. It didn't affect my credit rating at that point. After 12 months they wanted me to start paying the full amount again but its useful if you just need a break.

cozasmom

sorry also menat to ask - how does it work with DMP - have read you puy the amount you can owe - but how longer after does it take for credit rating to come back. I am a bit concerened with this as we have a small business and need to try and keep as much credibility as we can..

thanks

MeeBroke

cozasmom wrote: »

sorry also menat to ask - how does it work with DMP - have read you puy the amount you can owe - but how longer after does it take for credit rating to come back. I am a bit concerened with this as we have a small business and need to try and keep as much credibility as we can..

thanks

I've asked a lot of people this question, from IFAs, CCCS to a mate who is a bank manager. The answer that I have had is that your credit rating will be destroyed (no one will touch you with new credit including your own mortgage lender should you need to remortgage during the DMP) for a minimum of 6 years from the commencement of the plan. In my case, CCCS are recommending a 9.5 year DMP and my bank manager friend say that even though it's not meant to effect your credit rating beyond 6 years, it's almost certain to until the end of the DMP.

MeeBroke

lxpeanut wrote: »

I reduced the payments from about £200 a month to £15 as thats what I could afford. It didn't affect my credit rating at that point. After 12 months they wanted me to start paying the full amount again but its useful if you just need a break.

This would truly save us if possible. So, what happened to the interest during these months?

lxpeanut

They froze it completly. After the 12 months they started adding interest at a lower rate. I was with Halifax and they said their policy was to allow the account to be frozen for 12 months. It will vary from creditor to creditor but they will have a policy on it.

lxpeanut

MeeBroke wrote: »

The answer that I have had is that your credit rating will be destroyed for a minimum of 6 years from the commencement of the plan.

I suspect it will be 6 years from when defaults are issued. I've been on mine for 2 years and I've only recently had defaults issued on 2 debts. They stay on your record for 6 years so that will be a total of 8 years from the start of my DMP in 2014 when they are gone from my record. As my DMP will last until 2016 at the current rate then this will be before the end but I don't know how banks will react in those 2 years.