son in debt

wendy10

Please can anyone help. My son who is 27 has got himself into debt to the sum of 15k. He is working and earns roughly £1100 a month.
He has been having advice from the Debt Advisory line and they have told him an IVA is not the right option for him and they have advised him to go onto a Debt Management Plan. He has filled in all the forms etc and he has told me they are going to be taking in the first month a processing fee of £70. After that they will take £27 per month off the £127 he is paying them by D/Debit.
They have also told him that it will take approx 149 months to pay off his debts and he will have paid them £5.555 for their services. Is this normal?
The Debt Advisory Line brochure states that they won the Debt Management Provider of the Year award of the 2008/2009 so my son thinks that they are the right people to help sort out his debt problems. I am very concerned at the amount of money he is paying them for their services. I would also like to know if anyone thinks he would be better with an IVA.
As his mum I am really worried, is this the best option for him? He does not own a house but rents privately and he owns his car outright. His debt is bank loans and credit cards.

If anyone can offer any advice I would be very grateful.
Many thanks.

La_escocesa

Hi Wendy,

Someone with more knowledge will be along soon, but from what I've read on these forums there are debt charities that don't charge for these services.

Payplan is a free one. There are a few others out there.

Please tell him not to pay for the same service!!

pixiechick_2

Hi Wendy
I'm not terribly knowledgeable but I know enough to say that you should advise your son to leave well alone! There are debt charities out there who will advise him and help to set up any DMP without charging anything for the service. Why pay £5,500 to a company when it could go to paying off his debts, and so paying them off much quicker?

Moneysavingginge

CCCS is a free charity alot of people seem to use. http://www.cccs.co.uk/

pixiechick_2

PS. get him to read fermi's sticky "Where to go to seek professional impartial advice about your debts" https://forums.moneysavingexpert.com/discussion/2077631

NorthernLas

There is no reason why your son should pay for this advice - there are debt charities that will help him for free. Anyone charging does not have your son's best interests at heart. The reason they have TV ads is that they make money from their customers. That is why they appear friendly because their bonus depends on getting your son's business :eek:

Please use the link and read who to go to to get impartial advice https://forums.moneysavingexpert.com/discussion/2077631

He can use CCCS debt remedy on-line and get advice immediately https://debtremedy.cccs.co.uk/

OK he may need to wait for an appointment, but this must be better than £70 + £5k+ management charges (so he is happy to pay £20k to get himself out of the debt???).

Tixy

Hi Wendy

https://forums.moneysavingexpert.com/discussion/2077631
These are the groups to approach not the debt advisory line.

He doesn't sounds like a candidate for an IVA from what you have said and if they are forecasting he will be debt free in 12 years with their fees it would be a lot sooner without all that to pay back.

If he has handed the signed paperwork to them please make sure he cancels it straight away and talks to one of the charities.

They might also consider whether any other solutions might work for him.

BigCraigJohn

Right your son sounds like an almost copy of myself 6 months ago except I was nearer £21k in debt.
He is now at a point where he needs to do something, unfortunately there is a good chance he will be defaulted on the debts regardless of which route he goes.

I would strongly recommend he writes and asks for copies of the agreements, if they either cant produce or the agreement is unenforceable then they can not take him to court so in theory he can stop paying the unenforceable ones and concentrate on paying the enforceable ones. He will be defaulted and chased by debt collectors but worth it if he can regain control.

Read here
https://forums.moneysavingexpert.com/discussion/2532927

Also worth looking at whether there are charges and mis sold ppis to reclaim which I imagine there will be. Ppis can be reclaimed on any account he can prove so if you dont have details send a subject access request to every lender he's ever had with a tenner and they will produce whatever they have.

In my case I was considering bancruptcy 6 months ago due to being £21k in debt to 5 creditors all in arrears all over limit. Half of that was unenforceable then there were about £5k in charges and ppi i'm in the process of reclaiming.

Not to say he will end up the same but ive got my life back and I spend money on things I need(ie eating) rather than funding the fat cat banks xmas party. Would be very shocked if there were not some unenforceable agreements or lots of charges to reclaim.

Looked at IVA's and its not worth it unless you have something to protect ie property. Bancruptcy for some is an option but definately a final one.

If he wants a debt management plan do not pay anyone. Go with the above.

He needs to be in a position where he want to get this sorted aswell though, not just you.

NGlady

Is your son (or maybe even you if your willing to involve yourself!!) very self-controlled? If he is, does he really need a debt management plan, can't he just pay his creditors himself? Or have I completely missed the point and debt plans stop interest?

Is a family loan at all possible?