DMP and irregular salary

milliejon

Hi - I'm sorry I haven't contributed much lately, but I have been reading every couple of days or so. (I feel I have to say that to justify asking a question.)

Anyway, my question has probably been asked before, but I can't find anything in the search (my inability to pick the right words to search I suspect).

I have had a DMP with my creditors for about 2 years now which I've arranged myself, and I write to them every 6 months or so to keep them updated. If my circumstances change I write to let them know what I'm able to afford to pay them. I've been very lucky in that everything has been running along smoothly.

My boss knows my situation, and has arranged for me to have extra responsibilities and therefore a temporary allowance (which is reviewed regularly). This is really kind of him, but it gives me an extra headache. What do I do with my creditors? Do I write to let them know of the extra money (which could be paid in October, but taken away in November), and therefore pro-rata the extra money. Do I just pro-rata the money, and make extra payments whilst I'm receiving the allowance? Or do I save the allowance, and when I have enough, pay off one of my lowest debts?

The added complication is that I'm due to write to them in January, as my family tax credit will be reducing as my little boy will be one.

The likelihood is that the extra payment is around £75 per month (before tax).

I'd be grateful for any advice.

spud30

I'm in a similar situation. I get extra hours at work, but they are irregular, so I'm saving the extra until I have enough to clear a debt completely.

It saves messing creditors around.

milliejon

That was my first thought - but couldn't they argue that you're favouring one debt over another? Also, what happens if they ask for evidence of your pay and the bonus is on there?

spud30

I'm with CCCS, and asked Wonder_Girl's advice a while ago.

She said if I receive any extra money, to save it towards paying one debt in full. If you are able to pay one creditor off in full, it will benefit the rest, because they will automatically get more each month once one debt is gone.

Obviously, if the extra money will be received every month, you need to increase your regular payment accordingly.

Hope this helps.

rags2riches_2

spud30 wrote:

I'm in a similar situation. I get extra hours at work, but they are irregular, so I'm saving the extra until I have enough to clear a debt completely.

It saves messing creditors around.

Hey spud, how would you go about that?

I'm just entering into a DMP and will earn extra cash this Xmas. I like the idea of saving it, but then how do you go about giving that to the creditors?

milliejon

Thanks Spud - that's really helpful (and useful to know that's how the DMP companies would deal with it.

Rags - I suppose it's easier for me because I pay mine directly, so I'm not much use to you, but hopefully somebody will be around soon to answer for you.

spud30

rags2riches wrote:

Hey spud, how would you go about that?

I'm just entering into a DMP and will earn extra cash this Xmas. I like the idea of saving it, but then how do you go about giving that to the creditors?

Not too sure hun, not there yet.

I suppose it would be an idea to ring the creditor and ask if they would consider a full and final offer.

System

I pay £720 per month on debts of over 45K. My take home pay is approx 2K. But almost £500 of this is not considered to be part of my basic pay and should anything happen to me for medical reasons, if I elect to choose to leave early and if I get posted to another area it can fluctuate. I told Payplan and they decided to not to include the amount. Now I too am approaching a point with one of my creditors were they want to review my circumstances that I believe Payplan will deal with (?). Payplan have never asked me for a paystatement. But if my pay fluculates and I jepordise my repayments it can affect the DMP.

milliejon

In nearly two years, I've only been asked by one creditor (out of 8) to prove my income (although I got away with it by sending my bank statment which showed my wages going in).

I want to save the allowances and pay off a creditor when I have enough. On the other hand, I could save it until it stops being paid, and then pro-rata what I have.

That's just thrown another question up for myself. Do the creditors have a right to see my income, and any savings I may have at any time?

Zulu_Dawn

Interesting post.

I wonder what those of us on self administered DMP's are really required to admit. I have prepared an SOA which I use and which has been approved by CCCS and the majority of my creditors. I have to be honest and say it is a little out of date now and some of the items have changed to my benefit. I am proposing to put the excess into a savings account, gain a little interest and then use it to offer a Full and Final settlement in the future.

I accept this is a little dishonest. However no more so than increasing interest rateswithout notice to 29% to lend money that costs 4.75% to borrow - or by adding on £35 charges to send a computer generated letter.

Similarly if my Mum gave me £5k do I have to tell them or can I replace my gas guzzling unrelaible car with a newer and more economical one? Does anyone where I stand legally on this?

ZD

milliejon

I'm not sure about the legal side of things. However, I personally feel that large amounts of money would be better pro-rata'd. I wouldn't feel right buying a new car if I had the debts I have.

The amounts of money I'm talking of are very small in comparison to my total debt. I have 11 debts, and 4 of them are only 3.35% of the total debt - the largest is £230. That way, I would be happy to tell the companies that my mum paid the bill off at the bank if I was able to pay the smaller bills off.