leaving debt management

k241693

I Joined Gemstone fiancial management last july and have realised that this was a mistake as i ended up talking to creditors and working out replayment plans with them. However i pay them £45 a month for what seems to be to do very little.

Is there anything to stop me leaving them and paying my creditors direct or am i bound into a contract till my debt is paid off. When i joined they said i could not pay of my debt in full till i had been with them a year. Is this true and does it mean i'm stuck paying this amount.

lmclean100

Hi

Don't think there is anything to stop you leaving them, but I'm sure that someone more knowledgeable than me on this will be on soon. Never use a company where you have to pay a fee, that £45 could be going towards your debts. Why not call CCCS or PayPlan and discuss it with them.

I'm with CCCS and they have been great and they are free.

Good luck

Deep_In_Debt

As above poster has said - try CCCS which is a not for profit charity so they will do a fee free dmp which means all your money will go to clearing your debts each month.
Payplan will also offer a fee free dmp. There is no need to pay for this service when CCCS and PP will do the same job for free.

If you fancy doing it on your own, check out National Debtline website for advice and template letters you can use to send to your creditors.

Check your agreement with your current dmp provider to see what their terms are. I should imagine that you should be able to leave them when you wish as dmps are not legally binding.

Good luck.

Tixy

As deep in debt says you need to check the T&C. Usually you have to give 4weeks written notice to leave.

Just checked Gemstone's T&C and they just ask for written notice to cancel the agreement.
Now they do seem to be saying they may charge you a fee for cancelling in the first 12months. Have a look at the T&Cs and what fees you have paid so far to work out what this fee would be. My guess is it will still work out cheaper to cancel and pay a fee rather than pay the £45 for the remaining months to July. But check it out to be sure.

On a DMP you should be able to pay as much as you can regularly afford and also if you have additional lump sums this can also be paid to your creditors.

If you do leave them I would suggest writing to all your creditors for up to date balances (well those that don't send statements), and check which have frozen interest and whether any are still charging it.

Then you can decide to do your own DMP or use one of the free providers.

k241693

Thanks for the help. Will have a look at the terms and try and cancel. I reckon will go alone as i can carry on with payments already setup with them as standing orders and then use the £45 to pay off more debt on individual ones.

Tixy

You do need to be careful with that approach. On a DMP (even a self-administered one) you should be treating all creditors equally. So you are supposed to split your total payment equally across your debts pro-rata based on the balances. If you favour one (or 2) creditors above others you risk the chance that your DMP will be rejected or that they won't agree to freeze interest etc.
National debtline has a guide to help you work out how to split your repayments between creditors.

Plus your creditors will know you were paying a fee before so when you takeover they will expect either a slight increase in their payment for what you have saved in fees or a new statement of affairs to show they are still getting their fair share.