informal agreements

ajt15

What are they and are they worth it been offered one with chirchwood financial?

dougyd

I believe it to be the same as a DMP (debt management plan).

This is where you or a debt charity approach your creditors and make an offer of lower payments.
Ideally the end result will be all interest and charges frozen on the account and a reduced payment so you can clear the debt quickly and within your means.

There is no legal requirement for your creditor to agree to this and they can negate on the agreement at any time, however it is viewed as the best way to pay your creditors if you are struggling and is the best debt management option for your credit file.

I'd advise not to use Churchwood, what would happen usually is you forward a lump sump to Churchwood who will pay your creditors pro-rata based on what's been agreed and is affordable to you, but they take a percentage for their fee... this could be better utilised by paying it directly to your creditor's.

Speak to a national debt charity like the CCCS and if they think you're suitable for this process will handle everything for free.

Also, while you're here, why don't you post up a statement of affairs and the debt free wannabees will see if we can help you strip some cost out

fermi

I agree. Go to CCCS or Payplan rather than Churchwood.

No point paying a fee to a company, or letting them take a cut of the money.

What you want is ALL the money you pay to go towards paying off your debts. They will clear quicker that way.

Besides, Churchwood have an APPALLING reputation.

malac

fermi wrote: »

I agree. Go to CCCS or Payplan rather than Churchwood.

No point paying a fee to a company, or letting them take a cut of the money.

What you want is ALL the money you pay to go towards paying off your debts. They will clear quicker that way.

Besides, Churchwood have an APPALLING reputation.

Totally agree with the above.

ajt15

thanks guys will try payplan, how come they dont charge?

what happens if creditors dont agree to the dmp? does it harm your relationship with them?

Tixy

Payplan are a commercial company but make there fees on other products not debt management plans - there are also other places to go to that either are charities or get there funding elsewhere. http://forums.moneysavingexpert.com/showthread.html?t=2077631

If you do a DMP (with churchwood, payplan or whoever) it will cause defaults to be placed on your credit files and will therefore impact on your credit rating for 6years.

Most creditors will agree to the DMP if the believe you are paying all you can afford. And often they will freeze interest & charges (although this cannot be guaranteed). Often your debts will be sold on to debt collectors after 6to 12 months but usually you just continue with the same level of payments.

It is possible that your creditor or a debt collector will try to obtain a CCJ against you, if this happens come here for advice on responding to court papers.

ajt15

churchwood told me they would take over all contact and i wouldnt hear from my creditors and after 6 months my credit score would start to improve. I always pay my creditors and im never late with payments it just leaves me with very little after my outgoings.

Im not a bad payer they said but i am overstretched due to a change in circumstances. Any other advice?

MrsTinks

Churchwood are telling porkies... sorry. Your credit score will not improve in 6 months - unless they mean that more than likely all the defaults will have been placed in 6 months so as your score will be as low as it can go it will then probably maybe start improving... It's fancy wording which is kinda sorta right... but misleading

Do a SOA (statement of affairs) on here and let's see if you actually need a DMP or if you just need to budget better (better for your credit worthyness in the long run)

ajt15

where do i do the statement of affairs?

MrsTinks

http://www.makesenseofcards.com/soacalc.html

ajt15

MrsTine wrote: »

Churchwood are telling porkies... sorry. Your credit score will not improve in 6 months - unless they mean that more than likely all the defaults will have been placed in 6 months so as your score will be as low as it can go it will then probably maybe start improving... It's fancy wording which is kinda sorta right... but misleading

Do a SOA (statement of affairs) on here and let's see if you actually need a DMP or if you just need to budget better (better for your credit worthyness in the long run)

thanks are the defaults always made 100% and are they likely to turn into ccj's