DMP and Credit

LauraM65

Hi

I am thinking about a DMP for my debts but was wondering as I dont really know a lot about this whether after I was debt free would I be able to get credit at a later date.

Do you think I could just write to my creditors and ask them to freeze interest and offer them a payment that I think I can afford them each month or do I have to be signed up to a DMP in order for me to do this.

Any advise welcome as I need to sort myself out.

Thanks

DarkConvict

o you think I could just write to my creditors and ask them to freeze interest and offer them a payment that I think I can afford them each month

That is basically a self managed DMP.
DMPs are informal, so having someone running it for you, or doing it yourself doesn't matter. It usually looks best if it is done by a known debt charity - http://forums.moneysavingexpert.com/showthread.html?t=2077631

As to DMP and future credit. Most DMP providers will ask you do not obtain further credit during your dmp (whilst you have debts) for obvious reasons. The affect of a DMP is as follows. If you make below minimum payments then they will apply late payment markers, and potentially defaults and apply for CCJs. Anything on your report only last 6 years from the date it was placed. So if the defaults are added straight away or already added then you will be clear to get credit 6 years after they fall off. Obviously they could obtain CCJs at a later date if the debt is not paid.
Eg
Start DMP, get a default stright away. Credit rating affected for 6 years, (although satisfied 'paid' defaults have less affect after 3 years).
Start DMP, get default, 3 years later, get a CCJ. Credit rating is affected for 9 years, as it would be 6 years from the date of the CCJ been made.

Either way, defaults and CCJs will reduce your credit score. Note each creditor scores you differently. With a bad rating you might be accepted by Vanquis and Aqua (30%+ credit cards), only once the CCJs and defaults fall off would you get credit at the better rates like 0-15%.

Nargleblast

Hello Laura and welcome. You can do your own DMP, but I think it is better to get one of the debt counselling charities to run it for you at least to begin with, because it is a lot to take on board when you are new to all this, and they can not only administer it for you but also be there as a means of advice and support along the way. You can always review the situation at some point down the line, say a year from now, and then, if you felt confident, you could cancel the arrangement and go solo. Trouble with that is your creditors might get windy and slap on a year's worth of charges and interest, and start hassling you again, knowing you had no debt charity to back you up. Tough call, really, but I do believe only the really super-confident can handle the work and hassle of a self-managed DMP.

LauraM65

Thanks for the advice I will certainly take it on board what you are saying.

Deep_In_Debt

Hi
It's entirely up to you whether you go it alone or go with a dmp with a debt charity. I personally chose to get CCCS to do the leg work for me. You could start a dmp and then go it alone once the main work has been done if you feel confident enough. I chose to go with CCCS as they were recommended by a couple of my creditors who told me they would accept my dmp if I went with CCCS and true to their words they froze interest immediately, accepted repayments and have still kept interest frozen over 2 years on.

Your credit rating will be shot for the duration of the dmp and for 6 years after your last payment.

Do you really want credit again if you are struggling with it at the moment? Apart from my mortgage, I don't!