Did I make a mistake in choosing a DMP?

dancingfairy

In answer to your questions:
1) in terms of having too much spare cash to go bankrupt - that doesn't sound entirely clear. It is likely that what they meant was either you would end up paying a lot of money back into your bankruptcy due to the size or your income or they believed you could actually afford your debts.
2) If they actually believed you could pay your debts then why did they accept you onto a dmp?
3) it sounds from your post that you are actually paying more each month (or very close to) the minimum you would have been paying anyway? This is always a diifcult situation as obviously the closer you are to making the minimum payments the less I think the creditors are inclined to stop interest and charges.
4) It sounds very much like you were a borderline case for a dmp from what you've said - perhaps it wasn't explained very well or perhaps you rushed into it? However what's done is done. In terms of where to go now. Your options include trying to make settlements - this may be difficult if you are paying quite a high amount each month as the companies are just likely to want to continue with the plan but may be tempted to take money upfront rather than wait it out. You can of course still consider bankruptcy - this will though likely mean 3 years of payments into the bankrupty and mean finding the fees and that all your efforts so far will in effect be wasted and of course you will always have to declare the bankruptcy if asked. An IVA - you would be tied in for 5 years? to making the set payments - again it all depends on the amounts you owe and how much you can afford to pay each month but this could extend your difficulties for another 4/5 years. Again I think it is viewed more harshly than a dmp. With an IVA I was under the impression that you don't pay any fees? the amount you pay each month is assessed as your 'spare' income and the set up fees are deducted from your payments so it is up to the creditors to reduce the set up fees by negotiation with the person setting the IVA up?
Given where you are now from what you say it seems that you may be best trying for full and final settlements and repeatedly pushing for all interest and charges to be stopped from Halifax and trying to get to the end of the dmp as soon as possible.
Best of Luck
df

emm79

Hi just a query. Ive just started the process of a debt management plan..now my question is...after the 6years will I be debt free???
I owe 12,500 and am paying £150 per month
Any feedback would be really appreciated
Thank you
Emma xx

dancingfairy

Hi Emma - there is no guarantee I'm afarid. Generally creditors eventually accept your dmp but not all do. It will all depend on how quickly your creditors stop interest and charges and of course whether you situation changes during the dmp - ie whether you get a payrise or whether you sadly loose your job etc. A dmp is flexible and informal and continues until such time as all the debts are settled -either by paying until they are all finished or by agreeing a settlement figure with your creditors towards the end of your dmp and making sure they write the remainder off but you need to negotiate that with your creditors.
Best of Luck
df

emm79

dancingfairy wrote: »

Hi Emma - there is no guarantee I'm afarid. Generally creditors eventually accept your dmp but not all do. It will all depend on how quickly your creditors stop interest and charges and of course whether you situation changes during the dmp - ie whether you get a payrise or whether you sadly loose your job etc. A dmp is flexible and informal and continues until such time as all the debts are settled -either by paying until they are all finished or by agreeing a settlement figure with your creditors towards the end of your dmp and making sure they write the remainder off but you need to negotiate that with your creditors.
Best of Luck
df

Thank you for your fast reply,
my loan finishes in 2 years however my cred cards are 4,500++ and they are just to much. So thought this might be an option for me as I am a student and struggling financially , I'm thinking I havnt done the right thing!! Oh well hopefully , we'll see Thanks again
Emma x

paulmapp8306

As stated really. My DMP started out at £525 pm, but is currently (10 years later) £100. This is due to the wife giving up work to lok after 2 children that came along after the DMP was started.

Quick calculation though - even all creditors stopped interest immediately, you would take 6 years and 10 months to pay off the debts. Thats unlikely to happen.. Whats more likely is some will freeze them for 6 months - them possibly extend/permanently stop them after this, others will most likely reduce interest to a nominal level (2 or 3% normally) but keep charging. After 2-3 years they will probably sell the debts on and THEN you interest may be stopped.

Also as stated you can offer full and final payments to clear debts down the line - so provided you can raise the capital (from family, or inheritance, or any other lump some commingto you) you can reduce the timescale that way.

From personal experience, Id say IF you circumstances dont change, and you arnt in a position to make a F&F offer, then allow 8 years to pay off those debts.

Giggles_Fairy

Brissie_Bird wrote: »

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.
QUOTE]

An IVA stays on your credit file for six years from START date not from when the debt is paid.

shinyhead

A good rule of thumb with info on credit files is the 6 year rule: everything bad such as CCJs, bankruptcies,IVAs and defaults disappear 6 years after the start date, and everything good,such as properly operated accounts, disappears 6 years after they've been settled.

Oneday77

If you get a balance of all your creditors. Then take all those figures and plug them into the snowball calc onm the top of the forum.
You maybe able to self manage your debts now and snowball them down. Potentially clearing off the smallest large interest rate debt first to then allow the other debts back into paying true minimums and removing the AP.
Only a thought.

Brissie_Bird

dancingfairy wrote: »

2) If they actually believed you could pay your debts then why did they accept you onto a dmp?

At the time of going into the DMP, I could not afford the payments on my cards, which totalled over £1,000/month on minimum payments alone.

dancingfairy wrote: »

3) it sounds from your post that you are actually paying more each month (or very close to) the minimum you would have been paying anyway? This is always a diifcult situation as obviously the closer you are to making the minimum payments the less I think the creditors are inclined to stop interest and charges.

On some of them, yes, but not all. I am not making any headway on the Halifax debts, as the interest they are charging means my net monthly payment isn't making a dent.

dancingfairy wrote: »

4) It sounds very much like you were a borderline case for a dmp from what you've said - perhaps it wasn't explained very well or perhaps you rushed into it?

Actually, despite having £644/month to pay the debts, this was not enough to cover minimum payments on them all (see figures above). CCCS were adamant my best option was a DMP and bankruptcy not an option. I actually wanted bankruptcy but apparently I did not fit the criteria.

dancingfairy wrote: »

Your options include trying to make settlements - this may be difficult if you are paying quite a high amount each month as the companies are just likely to want to continue with the plan but may be tempted to take money upfront rather than wait it out.

I have no money to settle the accounts, only the monthy amount I am currently paying.

dancingfairy wrote: »

Given where you are now from what you say it seems that you may be best trying for full and final settlements and repeatedly pushing for all interest and charges to be stopped from Halifax and trying to get to the end of the dmp as soon as possible.

At least now I know that the 6 year period is from the date of the default, and not the date of settlement. That is a bit of good news.

As I don't have any lump sums coming to me in the future, unless my sister wins the lottery (she is a former bankrupt). I think I a stuck where I am.

Thanks for listening folks.

paulmapp8306

However, if the debts are APs, then (because technically your not defaulted, your paying) the debt clears your account 6 years AFTER there settled - not the starting point. I still have 2 as APs 11 years after the default.