Debt management plans

wood1e

Hi

Not sure if this is the right place for this question, but I couldn't find the right forum to ask!! So if admin could re-post in th right place if this is not the right forum

I am looking into a DMP, as it might be a way of me clearing my final 2 years of a loan and a few credit card debts. I am finding the management of all this a nightmare.

I went looking for a debt consolidation loan online, and when I got a phone call from one of the borkers he mentioned DPM, although they call it a Financial PLan.

He stated that all the interest charged would be stopped. I could pay one figure per month and pay in extra.

I am self employed and so can pay extra some months.

I could keep one credit card for my work expenses...would be a disaster if I couldn't keep one, as I need to pay subbies.

Although I use paypal for them sometimes, so I could make sure I get some money in the bank and pay directly from my bank.

but obviously at the moment I am paying a small hill of debt repayments so that is not a big possiblilty, bit of a viscious circle there.

Anyway, back to the third party FMP people, and all this would cost me is 17.5% of the money I pay on a monthly basis. They would not take 17.5% of extra money I pay into the plan.

They wanted me to sign up...I said I needed to think about it.

So I phoned CCCS but I cannot have a phone meeting for another two weeks, as they are really busy.

The call centre operative I spoke to, said I cannot keep one credit card out of the FMP and no one can gaurantee the interest would be stopped on the debts.

So some clarification there that need to be sorted, can anyone provide that information?

I could wait another 2 weeks, but now I have seen a potential exit strategy to get my life on an even keel I would like to be able to sort something out in the next week or so.

dojoman

You might be better posting this the debt free wannabe board:)

http://forums.moneysavingexpert.com/forumdisplay.php?f=76

Tixy

Hi

Probably best generally to post on the Debt free wannabe board.

In a DMP you need to include all your creditors so that you can demonstrate you are treating all your creditors fairly. Thats they key thing in a DMP and its by treating them all the same that you stand the best chance of getting them agree to freeze interest. Although as CCCS have told you this is never guaranteed, despite what many of the dodgier commercial DMP companys will tell you.

There are oher free places you could speak to as well as CCCS - see this link IMPORTANT - Where to seek professional impartial advice about your debts.

Is there no other way you can arrange to pay your subbies?

wood1e

Many thanks for that, I will repost.

I could pay the subbies with cash through paypal connected to my bank account, but with my cashflow being in the toilet that becomes an issue.

Obviously once debt repayment sorted I could then build up a small cash surplus to use to pay upfront or immediately on completion of work by the subbies.

But as I said bit is a cyclical issue at the moment.

Part of the reason I am in a little mess as I have clients how pay straight away, some that are not paying at the moment as projects are incomplete...one over a year now and they still won't sign off. That would release £3000 straight away...which reminds me better chase them...

dancingfairy

Well I do not know what the other company (not CCCS) are trying to sell you but no-one can guarantee that interest and charges won't be stopped. It is an informal agreement - it can be cancelled or changed by either party at any time. Generally most companies agree to freeze interest and charges eventually. If you want certainty and guarantees then you would be looking at an IVA/Bankruptcy which are forms of insolvency.
bY waiting another 2 weeks you will save yourself 17.5% of any money you pay into the other scheme. - that money could be going to your creditors and not lining the pockets of a debt company.
Some companies also take the first few months payments for themselves as fees as well -they often neglect to tell you that bit though. CCCS and the other free/impartial charities are not perfect by any means but I would rather deal with a well-known trusted impartial source than risk a company potentially ripping me off and doing me over big time.
I personally cant' see why you can't keep a credit card out of the plan - if it is only used for work purposes then surely that's fine? you may have a problem in the card company wanting to cancel it if they find out you are on a dmp and have other debts with them on a different card/loan.
Regarding differing payments I personally would advise against this - if I was a creditor and saw that some months you paid extra I be wanting that extra every month and not accepting anything less. If you set the standard early on - this is what I can pay - no more no less then they will see you can't be bullied/manipulated etc - any spare should be saved to pay for emergencies or saved to either increase your payment after 6 months to a year if the overtime is consistent or saved in order to make settlements to your creditors.
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Hannah_10

Seventeen and a half percent :eek:

You've got LESS chance of interest and charges being stopped than if you managed yourself or if you went through CCCS or Payplan.

Why can't you use a debit card? I do. The Co-Operative Cashminder accont will give anyone (and I do mean anyone, even bankrupts) a debit card. Nat West have previously advertised the same. Halifax do debit cards on thier Easycash account (the basic one, with no credit checks). I can list on the fingers of 1 hand the places that wont take my debit card, actually unmanned Asda petrol stations are the only one I can think of off the top of my head. Oh and Long Tall Sally didn't used to, but they have changed thier policy now because I gave them stick.

With 1 loan and "a few" credit card debts why is managing this a nightmare? Chances are they are feeding you a pile of horse manure is probably why.

Instead of overpaying on a DMP I would keep it back just in case of a poor month and then when I have a bit of it put back I'd make offers of a reduced settlement (like offering 75% to see the whole thing settled).

Mrs_Arcanum

Definitely avoid any Debt Management company with charges. CCCS or Pay Plan are the only ones worth considering. You could look at http://www.nationaldebtline.co.uk/ who should advise the best free solution for your particular situation FREE of charge.

Deep_In_Debt

And you'll be debt free a lot sooner by going with a non-fee charging company as all your money will be going to clear your debts rather than lining their pockets. Creditors know this too and are more likely to freeze interest if they know they are getting all your money. That said, they are under no obligation to do so, but most do.

Don't let the fee charging company tell you that CCCS or Payplan don't do what they do - that's rubbish! They basically are interested in your money and not in your interests.

Worth waiting 2 weeks for an appointment imo.

Good luck.

Ineedaname

Obviously you need to pay your subbies in order to keep them working for you, which keeps you in business. Maybe you could offer token payments to all your creditors for the moment (including stopping using any of the credit cards except where necessary to pay the subbies) and when you have had a good month leave that surplus in your bank account as a buffer for paying your subbies in the future?

At that time you could then enter into a DMP. But I wouldn't pay anyone to service the plan for you, I did mine via the CAB and it didn't cost me a penny.

Good luck

wood1e

Ineedaname wrote: »

Obviously you need to pay your subbies in order to keep them working for you, which keeps you in business. Maybe you could offer token payments to all your creditors for the moment (including stopping using any of the credit cards except where necessary to pay the subbies) and when you have had a good month leave that surplus in your bank account as a buffer for paying your subbies in the future?

At that time you could then enter into a DMP. But I wouldn't pay anyone to service the plan for you, I did mine via the CAB and it didn't cost me a penny.

Good luck

The subbies only get paid when work is complete, at the moment there is none so everyone is paid.

The more I think about it, the more I think I could get by without the single credit card.

The subbies I use get paid by installment, so when I bill a client I will try and get slightly higher 'deposit payments' from them. Then the cashflow will improve.

Which is half my probelm anyway, as by the time I get paid by some clients, the debts have increased as I have had use the credit to live!!

@Deep In Debt - This is very true, having never heard of this package as a means of getting me straight I suddenly got excited and thought 'lets go for it'!! I shall phone another charity recommended on here, and re-contact CCCS

@Mrs Arcanum - Many thanks I will take the advice

@Hannah_10 - Many thanks re the advice, although regarding the Debit Card suggestion, thats what I tried to explain, 'cashflow' no cash in bank to pay subbies, therefore use credit card, subbies get paid on time (boo) and me I get paid sometime in the future, but at least I am able ot work.

As I mention as well, it is a bit of a viscious circle. But having thought it through some more, I could probably start stashing a little bit away now, to cover whilst I sort out the DMP, then once that in place as long the monthly payment is not too high cashflow should free up and I can then use cash rather than credit to pay subbies.

@dancingfairy - Many thanks turning more to towards getting rid of cards completely, although that will leave me exposed!! Such is life!!

Strange how paying debt early is frowned upon!!! So will go for a minimum amount and let them wait for their money!! Although I would prefer to clear asap. If I have extra cash coming in!! Never mind.

Bloody_Hell_2

as someone that in 2008 had a debt of just over £24,000 and is now down to the last £2000, I can only sing the praises of CCCS - they not only know what they are talking about they offer real support and advice and things are not set in stone with them - they realise that life changes and so sometimes so do your payments

Even being with CCCS not all of my creditors agreed to stopping intrest so any debt company that tells you otherwise is spinning you a yarn - even some of the creditors that agree not to charge intrest can and do alter that - often it will be a 6 month agreement and unless you get onto them straight away they'll just start charging you again

CCCS have been a very real life line for me - at the start of this process I couldn't see a away out and I would reccomend them to anyone - they will advise you of what the best thing is for YOU