confusion over DMP with Payplan

laurenjs88

Hi there,

We're in the process of setting up a DMP with Payplan I've recieved a letter through from them this morning to sign, But it says we shouldnt have a joint bank account or a normal bank a account or one linked to our creditors...

We have a normal in credit account each & a joint account with A&L - OH owes money to Santander who now own A&L, It says we should open a basic bank account which is of absolutley no use to me what-so-ever.

Also they said any credit cards etc in credit we have need to be cut up and not used whilst were on the DMP, I have a Vanquis I use as a credit builder every month

I'm not happy about faffing around with bank accounts again (we've only just set them up) or getting rid of my CC over £7.5k of debt and am wondering whether we would need to do these things if we set-up the plan ourselves?

I don't really understand why we need to shut the A&L accounts because of the link to Santender. They cant take money out of my account as the debt is in OH's name or out of our joint account I assume as it has my name on? But why would they take money anyway if they are being paid?

Madison

Santander is A&L - the name will change on your statements etc by September. Stick with them if you want to but Lloyds TSB used to take money from my account leaving me barely enough to live on just before I entered into a DMP so I needed no convincing that changing to a basic bank account was a good idea.

laurenjs88

Thanks Madison,

Ive not really got an issue with getting rid of my Vanquis, But im just confused as too how Santander could justify taking money from our accounts when we've got a DMP in place as they will have a SOA?

I could understand them doing it before the DMP is int place but not whilst it is ongoing?

Tixy

Hi
Are you doing a joint DMP or s OH doing an individual DMP?

laurenjs88 wrote: »

I don't really understand why we need to shut the A&L accounts because of the link to Santender. They cant take money out of my account as the debt is in OH's name or out of our joint account I assume as it has my name on? But why would they take money anyway if they are being paid?

Because they will not be getting paid at the full rate, they can offset any money from any account in the DMP persons name. And they will.

As part of any DMP you agree not to take on any more credit, so you cannot use a card as a credit building tool.

Doing a DMP is informal and basically you are requesting that your creditors will agree to not charge interest and will allow you to pay less than you agreed to pay. They are not going to do this unless they see that all creditors are treated the same and they see that you are not running up any more credit, even credit that you pay off each month.

Tixy

laurenjs88 wrote: »

Thanks Madison,

Ive not really got an issue with getting rid of my Vanquis, But im just confused as too how Santander could justify taking money from our accounts when we've got a DMP in place as they will have a SOA?

I could understand them doing it before the DMP is int place but not whilst it is ongoing?

They may accept the token payments but in reality they want you to pay more (creditors always want you to pay more) so if they see your wages going in they will swipe a big chunk of that money via off setting.

laurenjs88

Its a joint DMP, but the debt is in OH's name. So does this mena they can take money from my A&L account too?

JES_F1

When I started my DMP with the CCCS two years ago, I decided to keep my Nationwide bank account (as I'd already cleared my overdraft) despite having a Nationwide credit card that became part of my DMP. I'd banked with them for 20+ years and naively thought that my loyalty would mean something.

Despite owing a relatively small amount of money to Nationwide (less than £2,000), they became my most difficult creditor - and last summer froze my bank account. I had to clear the arrears within 14 days or they'd take out as much as they possibly could to pay off the outstanding balance leaving me a nominal amount to live on for the month.

Due to selling stuff online, I just about had enough to clear the arrears (on CCCS' advice) in an Abbey account - and unfreeze my Nationwide account. I've not used the Nationwide account since!

I know it's a pain but you do need to open an account with someone that's not associated with any of your creditors. With Santander taking over lots of banks and building societies, I know this is difficult. (I now bank with Abbey/Santander but very recently discovered that Santander took over Cahoot, which I have a loan with ...)

And get rid of your Vanquis card - not only has it got a ridiculously high interest rate, but being on a DMP means you're signing up to no more credit (and can actually harm the success of your DMP). As you're going on a DMP, your credit rating will be shot to pieces anyway.

Good luck and best wishes.

laurenjs88

Thanks, well were now wondering whether it would be worth him doing a seperate DMP as my debt is only £394 of the 7.5k and I could probably clear that in about 3 months myself.

It would make more sense if he did it himself and i can keep my account & CC then atleast one of us is re-buliding credit.

Tixy

Could be an option - but to rebuild your rating whilst his sinks you would need to not have any joint financial products (current account with overdraft, mortgage etc) or close any you did have. And then financially disassociate from him with all 3 credit ref agencies (just a form to fill in).

laurenjs88

ok well we have no joint credit, our joint account has no overdraft and weve only been together a year so i dont think we are associated on anything together yet. Will we be able to use the joint account with no OD?

Tixy

If its the A&L one then he needs to come off so they don't use that money to offset his debts. To give you an idea of what some banks will do, there was a case of one bank who offset money from a childs account, just because legally the parent was named as a trustee of the account. So seriously they will go to all sorts of lengths.

Sounds like you should not be classed as financially associated then. Next time you get a copy of your credit report it would be worth just checking so you know for certain before you do any further credit applications etc.