Losing my Debt Management company and Managing my own debts

High&Dry

Hi All,

I just wanted some advice handling my current debts.

To cut a long story short back in 2006 I was made redundant and got behind in my credit card payments, I have two credit cards and I was unable to keep up the payments and so eventually had to default.

Now it always been my intention to pay them off as I don't like debt hanging over my shoulders (who does).

In order to tackle this issue I signed up to a debt management company called Sterling Green. Now I did this for 2 reasons. 1: I am lazy and didn't want the hassle of managing the debt myself and 2: I was a bit scared of how to handle my debtors so I thought a debt management company would take away the stress.

However 4 years later I had a sudden realisation that all the time I have been paying a management fee to my debt company to deal with my issues is money that could have been spent paying off my debts.

I recently visted Experian and got my credit score and decided to grab the bull by the horns and take care of my own debt management. As I have been with my debt company for 4 years I guess I assume I can just give them a written months notice and end my agreement with them and just approach my debtors directly. Is this the case?

Can someone offer some advice on how to tackle approaching my debtors to finally resolve and pay off my debts? I am aware my debtors are not best pleased that I used a debt management company in the first place as the money paid to the DMC could have been used to pay off my debts.

Thanks in advance and I would be extremely grateful for any help and advice offered.

Tixy

Hi michael

I'm sure it will be 1months written notice for sterling, it is for most of the DMP co's. If you feel up to tackling your debts yourself now then I would write to each creditor, explain that you will no longer be using Sterling and ask them to send you a current balance and a breakdown of all transactions (at least this way you'll know who is still charging you interest etc). Ask for standing order details as well so you can set up standing orders, once you have calculated how much to pay each creditor.

If you can still afford the same monthly payment then you'll just need to recalc the pro-rata split to take out Sterling's fee and then write to each creditor and set up the standing order. They may ask to see a new income & expenditure account, but hopefully you can provide that.

There are quite a lot of template letters and factsheets on the national debtline website (including how to calculate how much to pay each creditor etc).

If this all feels too daunting then you could also consider switching from sterling to one of the charities for them to run your DMP for you (for free), or just to get some initial advice from and then run the DMP yourself.

High&Dry

HI Tixy,

Thank you so much for your prompt response and advice. I shall type up a letter ready to send in the New Year once the postal services resumes.

I seem to remember contacting one of the free charitable debt managements companies and they said my debt was too low for them to help me but they were kind enough to send out information to me to help manage my debt. I shall re-look into this option.

I shall take your advice and go to the national debtline website and download some templates as you suggested.

Once again thank you so much for your help and guidance, I really appreicate it.

I wish you enjoy the break over the holidays.