DMP, Consolidation? What would be best?

Lisa1978

What exactly is a DMP? I have been pestered by a company called PayPlan, who apparntely give out free advice. If they do, how come they are constantly bombaring me with emails, calls, letters?
Who would i be best to talk to regarding my 2 credit cards and 2 unsecured personal loans which total £14k? I'm in desperate need of some help as it's getting on top of me somedays.... other days i'm upbeat about it all!!!
Would i be better talking to CAB, national debtline or any other suggestions?
Is a consolidated loan better or is this adding interest and further debt to problems?
Thanks

WASHER

A debt management plan is where you or Payplan or the CCCS come to an payment arrangement with your creditors based on your monthly income and outgoings.

I haven't heard of Payplan bombaring people with calls, are you sure it is Payplan and not something similar.

Try and speak to the CCCS (a debt charity) today.

Do not consolidate, it rarely works and could end up costing you more in interest.

WASHER.x.

Tixy

These are the recommended people to talk to Lisa - http://forums.moneysavingexpert.com/showthread.html?t=2077631

A DMP is a debt management plan. Its and informal agreement with your creditors. If you cannot meet you monthly minimum payments you may be suitable for a DMP. Basically you work with a DMP provider to work out a budget and how much you can afford to pay your creditors. You then pay this amount monthly to the provider who distributes it to your creditors (some take a fee at this point, the recommended ones above and Payplan do not).

The provider will also ask your creditors to stop charges and interest, and often some will and some won't (they do not have to). Being on a DMP will mean you have defaulted on your original terms with your creditors so they will usually issue defaults and that will have a serious impact on your credit file for years to come.

As part of the DMP you agree not to take on anymore credit for the duration of the DMP. DMPs can last anything from 2 years to 20years+ depending on the level of debt and the amount you can afford to repay.

Consolidation loans are rarely a good idea and they rarely solve the main issues as to how you got into debt in the first place, plus if you are stuggling financially they are usually for high APRs, actually making thingsd worse.

VicB

Hi Lisa,

I've just entered a DMP with CCCS and can honestly say a HUGE weight has been lifted. By no means think it is an easy step, you have to wait for your creditors to agree (still waiting for a majority of mine to agree) as the don't legally have to. But once it is sorted, you'll know exactly where you are with your money and where it's going.

You should also be prepared that it will pretty much ruin your credit rating for a good 5/6 year - I know this sounds harsh but unfortunately its true.

The best advice I can give is go onto the CCCS website and complete the 'Debt Remedy' that'll give you a good indication of your options.

Sorry it's not more positive but once you've put a plan into place you'll feel so much better...good luck!

Tixy

Lisa

I've just noticed that you posted a SOA on another thread. If you can currently meet your minimum payments then you will not be eligible for a DMP, instead you would be best advised to work on overpaying as much as you can to start to bring the debts down.

Lisa1978

Thanks everyone for your advice. Yes Tixy, i haven't missed any payments yet, but what i am doing is lifting cash out of my credit card to pay for simple things like groceries at the minute cos i've paid out so much at start of month. As i sit here i've £20 in my account until 25th February and a minimum credit card payment to make on 13th Feb, so that isn't good! On the plus side, we've taken on a delivery job on Mon and Tues night and making about £60-£100/wk extra for this so hopefully next wk i can pay the card (if loan some cash from sister!).

Do you think having bad credit for a few years is worth entering into this DMP? I guess i shouldn't need credit in the future bar if purchasing a different house. Would it affect getting another mortgage in future?

Thanks everyone xx

BeautyandtheBeast_3

Lisa1978 wrote: »

Thanks everyone for your advice. Yes Tixy, i haven't missed any payments yet, but what i am doing is lifting cash out of my credit card to pay for simple things like groceries at the minute cos i've paid out so much at start of month. As i sit here i've £20 in my account until 25th February and a minimum credit card payment to make on 13th Feb, so that isn't good! On the plus side, we've taken on a delivery job on Mon and Tues night and making about £60-£100/wk extra for this so hopefully next wk i can pay the card (if loan some cash from sister!).

Do you think having bad credit for a few years is worth entering into this DMP? I guess i shouldn't need credit in the future bar if purchasing a different house. Would it affect getting another mortgage in future?

Thanks everyone xx

Hi there!
This is so like me at the moment - i know exactly how you feel - i get a guaranteed payrise in september which will sort me out but i also feel !!!!ed off at having to use the CC the make the ends meet. I just want to win the euromillions - if i do i will clear your debts!! xx

Lisa1978

haha, sounds great to me, that would be nice . I'm all for these DMP until i hear they affect your credit rating. I'm already paying out £470 a month on loans/cards and haven't missed a payment but would just like the interest frozen without having to loose my good credit status!!! gggrrr. I'm defo taking part in the euromillions this wkend! What i always wonder is how i got into debt in the first place... it's crazy. Good luck to you as well. You seem to have brought some of your debts down, good on you! xx