DMP Vs. Balloon

stanley25

Hi,

Today I have entered in to a dmp with debtline (not national), i am already reading that i may live to regret this decision?
Anyway, my car HP agreement ends this month with the option to own the car outright by paying the balloon (ford options). I desperately need a car for work, and equally do not want to go back to ford to enter in to another three or five year contract with them on another car (that was what got me in to a mess in the first place!).
So, debtline have done there best to assure me that as i have paid more than a third (or is it two thirds?) of the hp agreement i shouldnt have a problem in keeping the car and paying them off monthly once they have negotiated with ford finance on by behalf. For the record i have never missed a hp payment on the car in three years, and as of the beginning of this month i believe(?) i have infact paid 100% of the hp agreement? as i only have the balloon left outstanding?
That is the question, does the rule of a third/two thirds still apply when we are talking about the balloon?? I am just so incredibly nervous that this will not be resolved and the car will be taken from me. Anyones advice would be so so welcome. Many thanks. Stanley.

NorthernLas

Sorry, the only thing I can suggest about your question on the balloon payment is to ask on the motoring forum as they may have experience of whether you can re-negotiate and pay in installments rather than the balloon.

If you have just signed up to debtline, I would use the cool off period in the T&C and cancel pronto.

There are organisations like CCCS and National Debtline (as well as others) who will help you sort out a debt plan for free. Or you can even do it for yourself.

If you need a car for work, could you buy a cheaper one, or a cheap lease-hire (this would give you the new car feel but without the balloon payment).

This forum can offer you suggestions if you want to post a statement of affairs (see the sticky at the top of the forum)

stanley25

Hello thankyou for your reply.

I will go over to the motoring forum to ask. Thanks.

What is it about debt line that is so bad? Is it just that they are charging for a service that you can get elsewhere for free? Or are they also incapable of doing what they claim they can do?
I only returned my signed form to them last night and my original call was on wednesday so i am well within the 7 days. I have already paid them £225 though!

It isnt that i want a new car. I really dont, this year i have spent alot of money repairing the car which has been the catalyst for some of my debt - but the benefit is now that those parts are new and the car is effectively going to be good for a while without needing great big money spent on it. I dont want anymore agreements with anyone if i can help it.
Ordinarily i would just have got a loan to pay the outstanding 2,300 but i cannot get a loan from the normal channels, which i presume to be because one of my current accounts ran overdraw + into the reserve fund and i have had one or two bills bounce. The balloon payment is due on the 28th so i am running out of time :-(

NorthernLas

I have no personal experience of the debtline. So what follows is a general discussion on fee paying DMP.

You pay a fee for someone to manage your debt. So you will be in debt longer.

They are unlikely to give you impartial advice as their job is to encourage you to sign up (they get bonuses on sales). You might be able to resolve your situation by cutting back, or your may need to consider much more drastic action.

They may tell you things over the phone like they can definitely get interest on debts stopped, your credit rating will not be damaged which are untrue.

The other side of debt is looking at what you spend. If you hand the problem on to someone else, you can continue to ignore what got you into this situation.

The choice is yours, but work out how much you will spend on them.

MrC1977

i also believe that creditors look more favourable at the free DMP organisers as all you available money goes to them.

stanley25

I have cancelled my account with debt line this morning without too much hassle. They were going to try and ask me what i was going to do instead, and i told them there was no benefit in my discussing it with them and they didnt ask again.
Apparently the money already paid should be back in my account in three to ten days. We sha’ll see!
The car I have is extremely economical, and I have spent a lot of money on it this year on parts which will now be good for the rest of the cars life. Compare this with giving it back and buying a banger for £200 which will no doubt need things replacing every other week, and eat fuel like there is no tomorrow and I think what I am aiming for is a sensible option?

A big outgoing every month was the car hp, which I no longer have (apart from the balloon), so in terms of cutbacks if I am only paying off 2300 of 2/3 years instead of 9000 over 3 years, then my monthly outgoing on the car is now that much lower that I can save, clear my overdraft etc. That was my plan.
Just getting that 2300 spread is a bit more difficult than I expected. Ford have offered to refinance the balloon for me, however I am concerned that the outcome of that application might be the same as other loans applications. I guess I can only try?