Should i take out a low start debt management scheme?

izzilo

My wife and I earn £32000 (gross) a year between us and have just calculated that we owe exactly the same, made up of credit cards, overdrafts and personal loans. We are struggling to pay all of our bills and have been in touch with cccs and they advise a low start debt management scheme. They have estimated that our debts will take 19yrs to pay off as we only have £148 a month left for our debts after all of our monthly outgoings have been paid. We're both not looking forward to offering our creditors a piddly amount every month and them getting awkward with us. Do cccs deal with the creditors for us, or is it all down to us? Please help!!!!

thefoolonthehill

CCCs will advise your creditors on your behalf.

The creditors will then probably chase you and harrass you for 6 months. They will then probably sell the debt on to a DCA.

19 years is a long time but if you cant afford your repayments at the moment how long will it take to pay off meeting minimum payments?

You could also cut back on things and make extra payments. this would obviously then reduce the time taken to repay all your debt.

Alternatively could you look into going bankrupt?

Tixy

Hi Izzilo

CCCS will write the letters and contact the creditors on your behalf. Some will still keep ringing you / writing to you for the first couple of months - all you need to do is tell them its being dealt with by CCCS who have all your info and quote your CCCS number to them. Some may be a bit difficult at first but it usually settles down after a couple of months.

As said some will automatically sell the debt on after 6months, others will hold onto it longer (particularly if they think your situation is likely to improve soon).

Once a debt is with a DCA they may be prepared to take a reduced full & final settlement for your debt, so in reality it may take you less than 19years.

And if you can increase your income or reduced your outgoings by the time of your 6monthly DMP review your may be able to pay a higher monthly payment.

scouselad1974

Hi

I am in a similar position to yourself, I owe a bit less than you do but I have started out on a low start DMP with CCCS and It is the most sensible thing that I have done in a long time.

CCCS will contact your creditors for you but you still need to do a bit of the leg work yourself to ensure that you get the best deal that you can.

Some of your creditors may not accept the offers made via CCCS and will also refuse to freeze interest etc unless you are very lucky, when this happens CCCS tell you to do nothing and that the debt will eventually be passed on to a DCA, now the problem with this approach is that while this is in the process of happening, charges and interest will continue to be added, meaning more debt. I wasn't prepared to let this happen, so I contacted all of the companies who refused my offer from the CCCS and asked them to reconsider their decision, after many letters most of them did reconsider apart from the odd one or two, who have now reduced the interest to a very low rate, I haven't given up on them yet though, I've just sent them a further letter

I also managed to get a lot of interest refunded on one of my credit cards and on a personal loan I was lucky enough to get all of my PPI refunded, simply by asking :j meaning my overall debt reduced by nearly £700 in one day for the cost of a couple of letters and the odd email.

So it is definatley worth harrasing your creditors to get what you want, I mean they do it to us.

CCCS are great to have behind you as a back up and they make it so easy to pay all of your creditors in one go.