Should I consider a Debt plan with Churchwood?

dangerousdodo

Hi all,

I have recently joined the site having a serious debt problem of £33500. I have done an SOA and with losts of really helpfull advice from many of you guys have actively started to cut down on the nasties and making the lifestyle changes and have managed to make some big savings, but its still a work in progress.

I have started to look at addressing the debts and looked at snowballing, also been in touch with a company to see if I could get a loan to aid with the biggest debt which is Virgin at £20k at 26%. They rejected me for a loan but put me in with a debt consolidation company called Churchwood.

I was very sceptical, having read articles on debt consolidation organisations , however I decided out of curiosity to run through my figures with the adviser.

They have told me that they would be able to organise a total repayment on my debts of £35508 over 6years at with an initial monthly payment of £628 which includes fees followed by £494/month based on a fixed fee of 16.99% of the debt. They say that debt is unsecured, its not an IVA and I could repay more to repay it earlier if I wished and wouldnt be penalised and the interest would remain at £2k.

My current repayments are on minimum repayment at £850/ month so it would considerably reduced this, and I would aim to keep the repayment at this rate to clear the debt earlier so it could be cleared in 3.5 years.

The snowball seemed a good approach , but when I checked what the interest repayments would at £850/month would cost about £30k in interest and would take over 6 years. I would consider with the savings paying more , but the interest would still be considerable.

I have also been onto some websites to read reviews and they range from scarily bad to very good. I did pick up that some of the people with bad reviews were in a worse position than me in that they were already defaulting on payments after taking up the agreements.

Should I consider this or am I being naive??

Thankyou
DD

mummy2mygirls

Hi i am sure others who know more about dmps will come along soon but just wanted to say from what i have read - dont go with people who are going to charge you, charities like payplan and cccs will do the same job and not charge you for doing so...
Good luck with becoming df

Deep_In_Debt

no, No, No! Don't go with Churchwood. As above poster has said, CCCS, Payplan or CAB are the people to speak to. Churchwood will charge you a fee each month and the above won't so ALL of your money will be going to clear your debts thus clearing your debts more quickly and not lining their pockets.

Also, creditors tend to have more respect for organisations such as CCCS, CAB and Payplan as they know that they will be receiving every penny.

dangerousdodo

Thanks for this. I have just looked at the site for Payplan and will make contact . I wasn't sure if I would qualify as the debts could be repaid if I snowball but will still take some time and the interest will be huge.