Debt Management Plans

JBJ2004

I have a few questions about DMP.

1. There appears to be a plethora of them out there-what should I look for? The ones that dont charge?
2. Once I have reached an agreement and all the debt is cleared will my ability to obtain credit be affected after the accounts have been settled.
3. What does a DMP do that I cant do? Surely if I contacted my debtors they would accept lower payments and or freeze interest?

wayout84

The best ones are CCCS & payplan, CAP, National debtline (think there are a few more) but these are charities and everything is free, all their services etc

You could def try and speak to creditors yourself, but if you go through a charity, they often have more success at getting creditors to freeze interest etc (although this is never guarenteed...for example Halifax seem to be impossible to get them to freeze or co-operate:mad:). Also it's easier as the company will distribute your payment to creditors...so you only have to make 1 payment to them rather than having to pay however many creditors you have

Your credit rating will be affected for 6 years or so after, but then it's probably not good anyway if you see what I mean so this should be the least of your worries

Sagaris

Don't bank on interest being frozen if you go on a DMP - I know of someone who is on a DMP with CCCS, they were under the impression that interest was frozen as CCCS had asked, but it soon became evident that is wasn't! Despite repeated requests for it to be frozen over the course of a year (and several letters/ phone calls) it wasn't.

This was with Barclays, if it's any help! Good luck with your DMP!

dilligaf293

is the 6 years counted from the start of the dmp or when the final payment is made to clear the debt?

immoral_angeluk

dilligaf293 wrote: »

is the 6 years counted from the start of the dmp or when the final payment is made to clear the debt?

6 years after the date of any defaults the files drop off... as far as I'm aware I'm sure someone will correct me if not.

Tixy

Thats right IA - 6years from the date of the defaults. Defaults are often put on your file after around 3months on a DMP.

Unless anyone defaulted you much later (which they shouldn't) or took out a CCJ against you several years in (which they could), in which case it could be 6years from then before your file really improves.

JBJ - You can self-manage your own DMP - plenty of people do. But using a not-for-profit third party can take out some of the hassle as:-
1) they deal with the phone calls and the creditors don't phone & bully you as much
2) creditors seem to be more accepting of believing your statement of affairs if its prepared by a charity, if you do it yourself they may hassle you for payslips/benefit notices etc - you don't have to provide them, but they don't have to accept your DMP
3) creditors will have more comfort that all creditors are being treated equally
4) some people find it easier to make 1 monthly payment rather than having to make payments to each individual creditor.

Some people prefer more control though and do their own DMP - even if you take this route its useful to get advice from one of the free organisations - as they will provide you with useful information on what is considered allowable expenditure on your income & expenditure account (that the creditors will want to see) and most will also provide template letters for you to use.