Payplan or own DMP - advice please.

Hobsch

Hi

I am with Payplan and have 9 creditors. 2 are very small amounts and will be paid off in one go and I have also recently started an evening job and will be earning a bit extra each month.

My question to you wonderful and helpful people is should I stick with Payplan or go alone. The creditors have accepted the repayment amount and I have been making payments but on a few occassions something major has come up and I paid Payplan less or nothing at all for that month. On these occassions I explained why, but I ended up dealing with the creditors myself and explaining why and they were happy with that.

So I wonder if I should deal directly with them but will they want more money out of me or from experience is it better sticking with Payplan. Any advice will be gratefully received and taken on board.

Thanks.

Zulu_Dawn

The obvious question is why do you want to change?

That you have had to get involved a couple of times is not really a reason as if you were doing it yourself this would still apply. I'm therefore a little confused.

If it is working OK, I wouldn't mess around. Also if I was a creditor, I would be a bit suspicious.

Can you let us know a bit more?

Regards,

ZD


I have a fairly new self-administered DMP though I consulted with CCCS before I started and have dropped in the CCCS name on lots of occasions which has been helpful. I am from a financial background and didn't want to entrust my debts to anyone other than me.

giddykipper

Sorry to jump thread but I'm very interested in setting up a DMP myself - like the OP I was wondering if this would be better than going through a company.

How easy is it to do (both ways) and is one more advantageous than the other?

Zulu Dawn, how did you go about it?

Thanks Jo

Zulu_Dawn

Hi Jo

I contacted CCCS and arranged an interview with them. As part of that process I put together an SOA.

At the interview we agreed that a DMP was best. They went over my SOA and made a few adjustments.

In fact your SOA is completely vital and I think there should be a course on how best to write one. The key points to it are as follows;

Do not include variable income. If you get any, put it in a savings account in case of emergencies.

Make overestimates on everything that is "an essential" (water, Gas, electric, etc.).

Try to keep discretionary or luxury spend to a minimum (it will all get thrown out so if you are a smoker, call it school dinners or some such thing).

Above all don't cripple yourself. The key to a successsful DMP is to be able to stick to it. You also ened to build in some slack in case you need to negotiate a little.

Once you have an SOA with which they are happy, get them to send it to you.

Then take a deep breath and contact all your unsecured creditors. Send each one your SOA, a statement of your unsecured credit and a letter saying that you can only afford "£x" (your cash available per month/amount you owe in total) and asking them to freeze interest and charges. CCCS will help you with this. My letter was based on the CCCS one and I quoted my CCCS reference to make the creditors feel secure that I knew what I was doing

Some will just agree to your amount and set up a SO, others will want to squeeze more out of you. Don't pay more than you can afford. Keep fighting for interest to be frozen. I have 15 creditors and all have now frozen interest.

Then set up the standing orders, stick to them and keep up the communication with your creditors at all times.

I have found them all to be fine but then I am lucky in that I am able to offer reasonable amounts. Traditionally MBNA are the worst, so contact them first. However be aware they probably won't accept your first offer so keep a bit aside for them.

I also have a little left each month which I am putting aside for emergencies. My hope is that at some stage in the future I will build up enough to offer some of them a "full and final settlement" offer (an amount of say 50% of the final balance in exchange for them writing off the debt in full).

It is all quite painful and there will be highs and lows. Clearly I have wrecked my credit history through this step and don't know quite what the impact of that will be in the future. Ultimately though I am now paying around £1,200 per month towards my debt whereas six months ago I was trying to pay £3,000 of which £1,000 was just interest!

Good luck with it all. It really is worth it


ZD