12 months form the end of a DMP - what now?

dabrownbear

Hello everybody. Bear with me – first time poster with a long(ish) story.

Back in September 2006 my reckless borrowing got out of hand (£38k owed) and I turned to Spectrum Financial Protection for help. Most of you will understand why – the barrage of creditors ringing morning, noon and night etc. Anyway, I paid my fees etc, etc and began my DMP in January 2007. I’ve pretty much let it bubble away in the background and tried to live a normal life ever since.

However, I’ve had my LMB and am thinking of leaving Spectrum – mostly because of their shoddy service and because I can utilise the £30 a month fee towards my debts.

I’ve got 12 months of my DMP to run and my current situation is as follows – oh by the way I got NONE of this information from Spectrum I had to either ring my creditors direct and/or use checkmyfile. Oh and one more thing I haven’t tucked away any savings to help for some form of final settlement.


Creditor 1: HSBC (sold to Cabot)
Start: £17,771 Current: £4,746 On File until: July ‘13

I’m paying £214 per month at present which is around 22 months to pay off. I’ve been quoted a settlement figure of £4,300.

Creditor 2: MBNA
Start: £6,134.23 Current: £2,680 On File Until: Account Closure

£85 per month. No settlement figured quoted.

Creditor 3: Santander (sold to Westcot)
Start: £5,600 Current: £3,197 On File Until: Nov ‘12


Creditor 4: HSBC Credit Card (sold to Payment Services Bureau)
Start: £3,641 Current: £1718.91 On File Until: Nov ‘12

Well, now I’m near the finish line and thought I’d ask you good folk for some advice on how to progress. Should I leave Spectrum and deal with my creditors myself – paying around 10 percent more each month to each creditor. Or should I stay with Spectrum in the hope that they will be able to negotiate me better final settlements than I would myself….or is there another way?

I’m now married, earn approx £40k per year and want to put my bad credit history in the rear view mirror as quickly as possible in order to put myself in the frame for a mortgage – and another 25 years of debt!

I mean do I even stand a chance of getting a mortgage anytime soon? Am I wasting my time?

Help!!

sickasachip13

Hi there,

I'd strongly advise you leave Spectrum - why on earth would you want to stay as it seems you're paying them and they're not very good! Payplan and CCCS both provide for free the DMP service - CCCS are a charity and I heartily recommend them. It could be that you could set up a DMP with them and continue your DMP with the additional £30pm going to debt.

http://www.cccs.co.uk/

They have an online debt remedy that you can complete anonymously and it will give you your options.

Best of luck

SAAC

PS, you can negotiate your own F&Fs - template letters on National Debtline website

Tixy

Hi and welcome

I'd leave spectrum and go it alone for the last year or so. Most Fee charging DMP companies will also charge a fee for negotiating reduced full & final settlements (or will take a cut at least). If you do ever get to a stage of offering creditors full & final settlements start your offers very low (or if they make you an offer give them a counter offer much lower).

In terms of a mortgage - looks like most of your records will drop off by the time your DMP is ended - did MBNA never issue a default? if not then that accountwill actually be on your file until 6years after the account is closed. Does it show as arrangement to pay?

Once your DMP is finished you'll need to start building up a good credit history, some people manage to get a credit card from their own bank, others end up having to go for a subprime card for a few months first. But if you do that at the same time as saving towards a deposit by the time you are ready for a mortgage your past issues and DMP shouldn't still cause you an issue.

dabrownbear

Guys, thanks for the advice so far.

I'm actually repairing my credit rating on the fly. I have an Argos Card, a Capital One and a Vanquis Card all of which have years and years of timely payments. I'm not stupid enough to have a high balance on them either as the interest is a killer.

My credit score, I think, is something like 778 from Experian & Call Credit and 863 from Equifax. I think I'm in 'Fair' almost 'Good' territory. So you can understand my desire to get the debt settled as quickly as possible.

As for MBNA they did issue a default way back in 2006. I remember they were prepared to settle for about £2.8K when I owed them £6.1K. When I spoke to them before Christmas they wouldn't negotiate....hard economic times I guess. Tixy - the account on checkmyfile now shows as 'DMP.' I'm a little bit worried that my 6 years will start from 2013 as far as MBNA are concerned

In terms of leaving Spectrum I wonder how I do it? Will there be any penalties etc, etc?

Finally, and interestingly I was in Nationwide this morning to change my address and they refused to upgrade my FlexAccount because of my 'adverse credit history' - I guess s*** really does stick! 5 spotless years of banking with them counts for nothing. I guess I'll see what they say in 12 months time!

Tixy

At a guess to leave spectrum you probably have to give a months written notice, though some are only 2weeks, so try to time it that they have paid over your last payment and before you make your next payment. You might find the T&Cs on their website.

In terms of MBNA - you say they issued a default - does that actually show on your credit reports (not checkmyfile but experian or equifax). If there was ever a default on your credit file then it should stay and the account should cease to show entirely on your files 6years later.