Debt management plan help please!

flossieflipflop

Hey all,

I'm a newbie to this site so if I repeat often asked questions etc then I apologise in advance.

Basically a few years ago I got into a complete mess with credit cards and an overdraft. I made payments on time to each but it was only ever the minimum amount and at the end of the payments and other bills/rent I would have no money left at all for food etc.

Anyway I approached a debt management company - churchwood financial - and in October 2007 (I think but could have been 2006)I started my plan paying £250 a month to pay off 3 creditors - lloyds tsb (overdraft, credit card and loan) Barclaycard (credit card) and Egg (credit card). I have paid on time every month since then but 3 years on am now starting to get fed up with paying them fees etc (I think they take 17.5% each month) and think I could pay it off a lot quicker if I went with a 'free' organisation or even approached creditors myself. My other issue with them is that they repeatedly pay Lloyds late and so every single payment is listed as late on my credit record despite me paying churchwood on time. I have chased this up a number of times but nothing has changed and the notices on my credit file remain.

Since then I am much more organised and haven't been in any other debt since (aside from a mortgage which has never been late or in arrears)

Under my original agreement with churchwood the plan would last 7 years to pay off what was about £15,000 of debt so I still have 4 years left if I stay with them.

Basically I want to be debt free as soon as I can so:

My questions are

- would you advise me approaching companies themselves? Would this decrease the payment time?

- How likely is it I can get the late payments off my credit record (as this is not my fault)

- Is there any other way I can try and clear this debt as quickly as possible (I really want to be debt free within 2 years)

Thanks for any advice you can give

bottleofred

Hi flossieflipflop,

You can definately pay the creditors yourself and should also consider having a look on nationaldebtline website and the consumer credit counselling service website as they provide free dmp advice/assistance etc. I'm not sure you could get the late payments off your credit file as you employed this company to make the payments for you, but someone with more knowledge than me may know better. Regarding trying to get debt free quicker, if you got a lump sum of money gathered up, you could contact the companies and ask for a full and final settlement offer. These vary greatly from around 20-50% (sometimes a bit more), but if you do this, say the money came from a relative and pay nothing until you have the offer in writing and includes the words "as full and final settlement". If you offer say 20% as a full and final settlement, they may counteroffer, but you can also counteroffer, so don't just accept what they want. And always get in writing the words"AS FULL AND FINAL SETTLEMENT"

Marisco

Hi flossie, yes I agree with bottleofred. I did my own DMP, it's hard work and time consuming to begin with, but once they are set up, no problem. We just get a letter about every 6 months "reviewing the a/c", I just phone them these days and say "nothings changed" and on we go;) But as yours are already in place, it should be easier. What you are paying them could be going on the debts themselves, and as bottle said, you can ask for a settlement figure any time and see what they come back with.

Hannah_10

they repeatedly pay Lloyds late and so every single payment is listed as late on my credit record despite me paying churchwood on time

This is terrible! I do hope you're not getting actual defaults because of this? If so then Honey I think you you should take Churchwood for every penny you have every given them in fees. Honestly this is shambolic!

You should absolutely not continue to use this company, they are getting you into more trouble and charging you for the priveledge. I want to suggest to you to:-
1. Dismiss them.
2. Write to your creditors yourself to say that owing to Churchwoods incompetance you are taking over the DMP at the same rates as of right now. (Sort out an increased offer at a later date, for now just take the repayments over.)
3. File an official complaint with the relevant bodies asking for your fees to be returned in full.

You are completely right that you can do this yourself, the debt management company at best can only do what you can for yourself, at worst (as you have sadly found out) they can get you into more trouble. To get you into trouble every month for three years on the trot is horrifying though!

flossieflipflop

Thanks for the replies.

Hannah - Churchwood have admitted they are paying Lloyds late and every time I ring they promise to sort it and ring me back but nothing has changed yet. I'm annoyed because both Egg and Barclaycard show up to date on time payments on the credit record. I am intending on chasing them again on it tomorrow and for them to ask LLoyds to remove the defaults on my credit record but I don't think Lloyds will do this but we shall see.

Also I have no idea on my remaining balances on my debts as they won't send these out. Aparantly I have to request these from each individual creditor (when I joined I was promised monthly statements but apparantly they changed their terms and conditions on this)

I should add apart from the late payment to Lloyds and no regular statements they have been pretty good at arranging everything for me.

Regarding doing my own dmp can I do this all by writing? Or would I have to phone them? (I'm too nervous to talk to them on the phone) And should I set my own dmp first or cancel my agreement with churchwood first?

I didn't know about the full and final settlement offers. Do many firms take these? I could possibly do this for Egg and Barclaycard as I think I should have about £1500 one each of these, maybe less. What do you think would be an offer they might accept? Or would they take their chances on the fact that with a dmp I will eventually pay the whole balance?

Sorry for all the questions and thanks again

Hannah_10

Everything should be done in writing, it's a lot simpler than it sounds.

You write a letter to each creditor saying "I have ceased my contract with Churchwood because they were regularly not paying all of my creditors on time. From now on I will be administering the same debt management plan myself, directly. Please respond in writing as soon as possible with a statement of the account as I am keen to foward your next payment." That's it, well you have to write the addreses and reference number at the top and everything, but yeah, that's all you would need to send in the body of the letter. Short and sweet.

As for Churchwood, they will probably tell you you can't cancel because of clause (whatever) in the terms and conditions, that's total rubbish because they're incompetant. The fact that they are actually getting you into further trouble (a default is a serious thing) is a very bad state of affairs indeed and you ought to be able to get all of your money back. The way to claim that money back is to complain to the regulator, but that's getting a bit ahead of ourselves for a moment. For now you write the letters to the creditors and write another to Churchwood to cancel.

Full and Finals are a fab idea, but again they are a tomorrow problem. When you make one they will probably accept it if you pitch it at the right level (there are people here who can help you work out what that level is). There are template letters you can send to do this, so it's as simple as fill in the blanks, print and send. Then when they write back you copy the letter onto the forum and someone cleverer than I will tell you if it's sound or if they're trying to have you over. All quite easy when you do it step by step. Lets not complicate things yet though, that can be done next month or the month after, when you're back in charge of your own life again.

The first thing to do right away is to take back control (write to creditors and Churchwood, stop your payments to Churchwood).
Second thing to do let us help you work out your complaint to try to get your money back.
Third thing is to increase your repayments if you want to and write full and finals if you want to.