Complicated DMP question

trouble1981

My husband is looking at beginning a DMP. He currently banks with HSBC.

With HSBC he also has a Loan (approx £25000 outstanding), a credit card with a balance of £600. Jointly we have a mortgage and secured overdraft (both up to date with payments).

The DMP guidance say he will pay off the dmp in 6years and 0 months. However when you split the payments (as a precentage of the balances) the HSBC loan will be getting paid £200 per month more than they are currently getting paid.

The loan has 72 payments remaining (6 years 0 months!) and he has a clause with it that he will be refunded 25% of the interest paid once it completes.

So, our thoughts are to keep the HSBC loan out of the agreement and pay the £200 surplus straight onto the HSBC credit card for 3 months (and close it) and after 3 months, split the surplus between the remaining creditors.

However, a spanner in the system as always. He also has a loan with beneficial finance which he is unable to pay and this needs to be included in the DMP. But they are part of HSBC - will they take the money?

Like i said, a really complicated problem! What would you do? Anyone had something similar?
Please help us make sense of this!!!!

tyllwyd

I can't get my head around that - I thought the point of a DMP was that you asked all the creditors to accept a reduced amount, and split the money by percentage so that you weren't preferring one over another. If you are paying one the full amount and, in fact, more than the agreed amount, that doesn't seem fair to the others. Is someone arranging the DMP for you -what do they say?

Perhaps if you posted a list of amounts owed & interest rates etc somebody might be able to make more sense of it for you.

trouble1981

At least its just not me who's confused!

Done some tweaking and its actually £120 extra he woudl pay.

Really can't get my head round the amount he is paying, it just doesn't make sense!
Don't know his interest rates off the top of my head. Will start hunting for them in a bit

Surplus after essentials is £950pcm.

HSBC PLC LOANS
oustanding amount £24,603.00 (percentage of total debt 49%)
dmp suggested payment- £462.20 (£341.69 normal payment pre-dmp)
BENEFICIAL FINANCE
oustanding amount 7,032.00 (14%)
dmp suggested payment 132.10 (£293.01)
Halifax Loan
oustanding amount 1,804.00 (4%)
dmp suggested payment 33.89 (£164.00)
Halifax Card
oustanding amount 2,780.00 (5%)
dmp suggested payment 52.23 (£55.00)
VIRGIN / MBNA
oustanding amount 8,900.00 (18%)
dmp suggested payment 167.20 (£225.00)
B/CARD PLAT VISA
oustanding amount 4,780.00 (9%)
dmp suggested payment 89.80 (£120.00)
GOLD VISA - HSBC
oustanding amount 550.00 (1%)
dmp suggested payment 10.33 (£14.12)
ATTIRE
oustanding amount 120.00 (0%)
dmp suggested payment 2.25 (£5.09)


Something that has just come up - do you do the balance as the settlement figure or as the current balance (the hsbc loan shows a balance of £24,603 as the interest is already paid, if paid early settlement would be £20500 ish).

We are probably going with payplan (i am already with them) but they are not available till monday and want some ideas/suggestions in our heads first as I am not fully expecting them to understand it fully!

louietudor

who is the dmp through - if you try cccs they calculate the payments pro rata to what you currently pay and not the amount owed

Jacks_xxx

Hiya honey, :hello:

Couple of questions before I dive in:

Who will the DMP be with?

and

Will interest be reduced or frozen on all or any of the debts to enable them to be paid off on a DMP in 6 years and 0 months?

Ok and three: Is this right? He'll be paying more a month on a DMP than he is now?????

I make it that he's paying £876 a month now but on the DMP he'd be paying £950 per month exactly.

What's his reason for wanting to enter a DMP honeybun? As for most people it's to get interest frozen and reduce their monthly payments.

Have you both looked at The Snowball Calculator to see if it would be quicker and cheaper to Snowball? (It was for us.)

Love Jacks xxx