Did I make a mistake in choosing a DMP?

Brissie_Bird

I started my DMP with CCCS back in May 2007 with unsecured debts of £57,307, and at the time I was told it would take just over six (6) years to pay off the debt paying £644/month.

With the price of everything going up significantly in recent years, I had to reduce payments to £600/month in the last 18 months or so. Since starting the DMP I have paid £32,809 altogether.

Having looked at my CCCS account online and the time left to pay off the remaining £28,935.48, it has been extended to October 2015 - a total of eight (8) years. :shocked: I have noticed all my DMP payments are shown as severely late (i.e. I have made no arrangements to pay the money back (8 I think!) on my credit report, and it takes six years for these to be removed, this means I won't be able to get credit again until 2021 which will only allow me a window of 13 years in which to pay off a mortgage. I can't see any lender allowing a mortgage over 13 years; even if they did, I doubt a flat/home exists that could be paid for in that time on my salary.

As a result, I feel I have lost any chance of ever owning my own home.

Did I make a mistake?

Should I have gone for an IVA, though I could not afford the fees at the time? An IVA would have run for 4 years, but foolishly I figured an extra two years and I could pay off my debt complete, and honourably.

Thoughts/suggestions?

kerrirobberts

If I remember correctly it's 6yrs from thevdate of default not from the date of settled. You've done amazingly well so far. Looking at my own credit report my DMP showed on it as being an arrangement, so maybe someone's messed up somewhere.
Sure someone will be along soon with more knowledge of these things than myself. But nice again congrats on the massive reduction in debt that's amazing :-)

michanddave

Hi,
Reading your post I take it you do not own a house at the moment, chances are that you would not have been able to get an IVA, But I wonder if in your circumstances bankruptcy might have been the better option. I think that you had the same Idea as me that you made the dept and you wanted to deal with the companies the right way.

You still have a lot of dept even paying of what you have, have you thought about righting to the credit rating agents and asking for a correction on your rating. you still have the options of trying an IVA or even bankruptcy.

There is a really good article on IVA`s on this site I cant post the link but use the search button on the top right to find it, it should be the 1st link

The initial DMP from the CCCS does not take into account any interest that the companies may still add on, I have 8 creditors and 2 are still adding interest as I am paying the minimum amounts to them, I spoke to the CCCS about this and they stated that the creditors have no legal obligation to stop interest. In my view the 6 companies that have stopped the interest will be the ones I deal with in the future.

Write to the halifax requesting a reduction in the interest, explain the situation and if they refuse to help make a complaint, the worst that happens is that it gets rejected.

hope this helps a little.

RAS

Brissie_Bird wrote: »

I started my DMP with CCCS back in May 2007 with unsecured debts of £57,307, and at the time I was told it would take just over six (6) years to pay off the debt paying £644/month.

With the price of everything going up significantly in recent years, I had to reduce payments to £600/month in the last 18 months or so. Since starting the DMP I have paid £32,809 altogether.

Having looked at my CCCS account online and the time left to pay off the remaining £28,935.48, it has been extended to October 2015 - a total of eight (8) years. :shocked: I have noticed all my DMP payments are shown as severely late (i.e. I have made no arrangements to pay the money back (8 I think!) on my credit report, and it takes six years for these to be removed, this means I won't be able to get credit again until 2021 which will only allow me a window of 13 years in which to pay off a mortgage. I can't see any lender allowing a mortgage over 13 years; even if they did, I doubt a flat/home exists that could be paid for in that time on my salary.

As a result, I feel I have lost any chance of ever owning my own home.

Did I make a mistake?

Should I have gone for an IVA, though I could not afford the fees at the time? An IVA would have run for 4 years, but foolishly I figured an extra two years and I could pay off my debt complete, and honourably.

Thoughts/suggestions?

it sounds as iff the creditors have continued to record late paym,ents rather than issuing defaults/

Do you have defaults on these debts? What dates?

Also post up your SOA on here and folk might be able to suggest ways of finding extra money to pay debts.

peterod1

Not too sure if your dates add up here.

Assuming the debt did not increase from the original amount and the payments remain constant then £57,307 / £644 = 89 months or 7 years and 5 months to pay off the original debt not 6 years.

Taking into account the lower payments for the last 18 months (18* £44) this would add another month.

This is before your creditors add any further interest or charges.

Are you sure you were told only 6 Years?

That aside well done for bringing the debt down. I imagine it would be harder to get a mortgage after an IVA anyway, but I honestly don't know.

Brissie_Bird

michanddave wrote: »

Reading your post I take it you do not own a house at the moment

I don't.

michanddave wrote: »

I wonder if in your circumstances bankruptcy might have been the better option.

I was told I could not file for bankruptcy because I had too much "spare cash" every month (and this was before my overtime was taken into account).

michanddave wrote: »

You still have a lot of dept even paying of what you have, have you thought about righting to the credit rating agents and asking for a correction on your rating.

From what I can gather, they advise writing to the creditors to get ratings corrected.

michanddave wrote: »

you still have the options of trying an IVA or even bankruptcy.

Bankruptcy is still out of the equation (see above) and an IVA would be another four years - the same time as my DMP - and I would have to pay fees and end up paying less than the full amount of my debt. So, I'm not sure I would be any better off.

michanddave wrote: »

Write to the halifax requesting a reduction in the interest, explain the situation and if they refuse to help make a complaint, the worst that happens is that it gets rejected.

I have written to the Halifax several times as have the CCCS, but they won't budge. They tell me I am already on their reduced interest rate. :mad:

RAS wrote: »

it sounds as iff the creditors have continued to record late paym,ents rather than issuing defaults/

Yes, they have.

RAS wrote: »

Do you have defaults on these debts? What dates?

I don't know. I went straight from paying the minimum amount each month (robbing peter to pay paul) to the DMP. Some show defaults on the credit reports, others (such as MBNA) don't.

How do I find out if I did indeed default?

peterod1 wrote: »

Assuming the debt did not increase from the original amount and the payments remain constant then £57,307 / £644 = 89 months or 7 years and 5 months to pay off the original debt not 6 years.

At the time, it took into account the semi-regular overtime that was on offer (back when I started the DMP).

peterod1 wrote: »

Taking into account the lower payments for the last 18 months (18* £44) this would add another month.

This is before your creditors add any further interest or charges.

Except they are charging extra interest 19.9% on two of my largest debts.

peterod1 wrote: »

Are you sure you were told only 6 Years?

6 years and a few months given the semi-regular overtime I was receiving at the start of the debt, but which is no longer available to me.

*******

I hope that answers everyone's questions. I am still unsure as to whether or not I made the right decision. Either way, it seems I am scr£w£d in terms of being able to own my own home.

immoral_angeluk

If you're not happy in your DMP then you need to talk to CCCS, who may be able to advise you on alternative options, such as an IVA.

Brissie_Bird

immoral_angeluk wrote: »

If you're not happy in your DMP then you need to talk to CCCS, who may be able to advise you on alternative options, such as an IVA.

Thanks: I speak to CCCS twice a year (once at debt review, and once at salary review). Given how much I have paid off and how much "spare cash" I have each month, the CCCS have advised that - at this point - my major creditors are unlikely to agree to an IVA. And, to be frank, at this point in the game it will be quicker to pay off the debt completely rather than ask my creditors to accept a percentage under an IVA.

Either way, my credit report will show an IVA or late (no arrangement) payments for six years after I have paid the debt - if my understanding of credit reports is correct.

I will look at the letters to creditors asking for amendment to credit reports again and see if I can't get them to change it to late payments (arrangements made). If I am correct, at this point, I am making more than the minimum payments required if the accounts were active (and not subject to a DMP), so perhaps I have a chance of having my report altered?

I'm not sure if this is the right forum, but rather than open up another thread: As it happens, neither Halifax credit card is showing on any of my three credit reports, and I was wondering if that is anything I should be concerned about? Yes, it's a good thing in terms of my credit rating, but even so ...??????

Brissie_Bird

I have seen on another post someone mentioned getting high interest credit cards (the ones used to build a credit rating) while still on a DMP in order to improve their personal credit rating.

My understanding of a DMP was that you were precluded from applying for more credit until the DMP was cleared.

Is this not the case?

Should I be applying and using credit cards carefully (i.e. moving money from my current account to a credit card to do my regular shopping, etc.) to build credit?

Would this make a difference if the bad debts remain on my history for six years after they are cleared?

topcat9

Hi Brissie Bird,

You are right to think that when you enter a DMP, you are asked not to take on any more credit. The reason given by Payplan is that it may be considered fraudulent to take out further debt whilst knowing that you already cannot pay the debts you have. If your creditors find out then they would be entitled to cancel the DMP agreement (I've no idea whether this has ever happened in practice).

In your first post, you referred to 8 on your credit report. Do you mean that the monthly statuses are showing as 8? If so, this doesn't mean 8 months of late payments, it means the accounts are in default. The six years they remain on your report would then start from the default date.

paulmapp8306

FWIW some of my DMP debts are shwing as AP, some as missed payments and one as default.

After 6 years from initial default they dissapear - however, if you sttle them within this time they do still sow on your account (dont det that - but thats how mine have worked).

Therefor I have one showing AP (that wast registered until 5 years after I started mu DMP) one as default (which was re-registered after the initial 6 years ) and one withmissed pauments (6 months usually). I also have one that was settled 15 months ago showing all the history for the last 6 years.

I also have 9 that have dissapeared completely.

i am still on a DMP, with £18k left to pay but a due date of Jul 13 (As I know I have a limp sum comming in at that point that will clear my debts) and have got a "credit rebuilding" credit card 9 mnoths ago (two actually - one for me and another for the wife - out CCCS is a joint account). This we use to put one tank of peterol (my card) and one weekly shop (on my wifes) every month and then clear them completely on payday (monthly). This is an attempt to build up my credit score prior to being debt free.

It must be working as we have been looking at housing (Im forces now but will need somewhere when I come out on 2013) and with a 25% deposit (thanks to mum) have been given a mortgage in principle (after a credit check). We dont intend to use it yet - the application was at the agents advice to see where we stood.