Debt Management Plan

stuckinthepast

I have gone to the CSSS and put in info and at the end it is recommedning a DMP, what are peoples experiences with these, it says they are free but are there any catches.

Also what are their success rates with getting the interest frozen?

davidjwest

All the (anecdotal) evidence I've heard/read is that they (and all DMPs) have very good success rates at getting interest frozen.

No catches as such but the downsides:

1. Your credit rating will be adversely affected, probably severely.

2. The creditors *may* try to take you to court depending on circumstances, to recover the debts.

3. Some DMC (no CCCS) will charge for their services.

4. Creditors will try to increase payments over time and may not freeze interest indefinitely.

A lot depends on your circumstances and the creditors involved.

stuckinthepast

Any idea how long the credit rating is affected for, it will take me close to 5 years to repay the debt anyway

How often do the creditors (all card companies) take people to court?

MrsTinks

6 years in england from when you default the accounts... That is how long defaults will stay on your accounts...
Are there downsides... well yes. But it depends on your situation really
Have you defaulted already? If not then moving debts round may be possible and prevent you going for a DMP - jiggling your money round and cutting back could also help. Do you own your own home? that can influence things...

Jinx

Hi Stuck

When you stop paying the minimum payment you then get defaulted (credit record now trashed). The default will stay on your credit record 5 years in Scotland, 6 in England and will drop off your file when this time expires even if you are still repaying the debt.

In my experience the creditors and debt collection agencies wont take you to court if you are up front with them and pay them as you have stated you will. For example Ive been doing my own DMP since 04 (see my sig) and had the interest frozen. At each change of circumstances I write to them all and provide an update saying payment going up or down and I pay them religiously each month by recurring online payment.

Hope this helps

jenevieve

Frustratingly, no one can give you any definite facts as such, only from their own experiences. However, these experiences are worth their weight in gold in terms of advice and support.

From my experience, I have been up and running with my DMP for 14 months. I can't say that learning the tough way of how to budget has been easy (probably wouldn't have wound up in this position to start with if it was!). And I agree with Jinx about the trashed credit record when you stop being able to pay the minimun amount.
BUT, having a DMP has given me back control and has reduced my anxiety over my finances no end. The people at CCCS are so supportive and non-judgemental (as are the lovely folk on here) makes a massive difference.
It is common practice for communication from your creditors to increase initially while everything is being set up but I found that after 3 or 4 months, all my creditors were on board and all had either frozen or reduced interest and all had stopped charges.

Good luck with whatever you decide to do.

J x

Deep_In_Debt

Just to second the above. I've been on a dmp with CCCS since Jan 08 and my creditors have kept interest frozen although 1 has started adding interest recently but only a little bit and I'm still making headway into the debt. I've not had a call from a creditor since October 2008 so it's all good on that front - it was a bit hairy for a few months but you have to ride the storm for a while and once they see regular payments coming through, they tend to calm down a bit.

It is hard budgetting at first but you get used to it.

Good luck.

stuckinthepast

Many thanks for your input people, I think the CSSS is the way to go then as the interest rates are high on what I owe the only chance I have to get debt repaid is by getting them frozen or reduced.