DMP questions - completely confused

bestmummy

I would like to know your opinions on DMP?
Are they good and worth it?

im kind of confused, spoke to someone today and was told i could pay £125 a month when i asked how long would i pay that for the answer was 4 years. I've been looking online and DMP require you to pay the full amount of your debts. When calculating the amount I would pay monthly x 4 years does not pays off my debts just about half of it. So I'm wondering is it possible to write off some debt on DMP?All I was told is that they are going to negociate with all my creditors.

its up to my creditors if they want to accept or not and whether they will freeze interest etc, how am I supposed to know how long I'm going to pay this DMP? And if they carry on charging interest I can only assume I will end up with more debt that I did before... or will i know all this before i actually say i want a dmp?

Really confused about all this and dont know what to do, need your opinions please, thanks

Tixy

Hi

Who have you been speaking to today? was it a commercial company that charges fees? or one of the charities that are recommended here on MSE? if it wasn't one of the charities then contact one of them for advise instead. IMPORTANT - Where to seek professional impartial advice about your debts.

The fact that the figures don't seem to stack up is unusual - usually on a DMP your predicted end date (or term) at the start is based on an assumption of paying back all the capital but that creditors will freeze interest. In reality they doesn't always happen and so your DMP can be revised to longer once in.

In general if your creditors can see you are paying all you can afford and thatyou cannot meet repayments then they will often freeze interest or lower it. Some may freeze in straight away, some might after a few monthsm, or only once you are 6months into a DMP, sometimes one or 2 could be very difficult and not freeze interest. What usually happens in these cases, if they cannot be persudaed is that at the start the debt will grow, but it will often be passed to debt collectors who will at that point often freeze interest.

bestmummy

Thanks for your reply.

They charge 15%, but there is no agreement between me and them yet, i'm just trying to figure out whats best for me at the moment.

Jenjen

Don't go with a DMP provider who charges a fee. They do not have your best interests at heart and are only in it to make money. Go to CCCS or Payplan. They will set up your DMP for free.

I've just started a DMP with CCCS. They are a charity. They have negotiated with all my creditors. Most of them have now stopped interest and the ones that haven't have reduced it down to a very low amount. We have had very little communication from the creditors ourselves. CCCS have dealt with it all for us and every penny we pay them will go to our creditors.

I think there is a chance you can write off some of the debt at a later date by offering your creditors full and final settlements. But this is in no way guaranteed and relies on you being able to get together a lump sum of money.

Hope that helps

Mort

bestmummy wrote: »

Thanks for your reply.

They charge 15%, but there is no agreement between me and them yet, i'm just trying to figure out whats best for me at the moment.

We went for a DMP with Payplan absolutely the best financial decision made in years. Look at the link posted by Tixy.
Then have a think. Being on a DMP can be hard at the start, possibly no savings and no credit options, learning how to budget properly. But consider that 15% charge, for every £100 you give to the DMC they pocket £15.00. Would it not be better to have that £15.00 clearing your debt that little bit quicker?

Payplan are able to approach creditors towards the end of the DMP to seek full and final settlements, I assume CCCS can as well. Don't assume the fee paying companies are the only ones who will do this.

Standingtall

Just want to back up what the other posters have said - do not go with a private company but go with Payplan or CCCS. If you want convinving more look at the thread on here about DCM money Solutions (I think that is in the title) and look what has happened to the poor people involved in that company. I am not of course suggesting that all Debt Management companies are badly run but the clue is in the word Company - they are profit making entities therefore it is in their favour that you are in debt.

mikewjones_from_wales

completely agree with you standing tall. Look at Payplan or CCCS first before considering entering into any DMP.

Regarding DCM Money Solutions yes i would encourage people to look at that thread to see what happens when you make the wrong decision about whom you trust to get you out of debt.

I am one of those people and out of pocket because the company took our money instead of paying our creditors. I would concede that DCM is an extreme case, but do your homework and you wont end out in the same boat as the 1040 that are coming to terms with the DCM fallout.

sickasachip13

Hi,
I just wanted to echo the other posters really - do not go with a fee-charging company, there is a good chance they will mislead you into a situation that is not good and there is Payplan and CCCS (a charity) that provide DMP services for free - exactly the same service as the company would, but with no charges.
We've been on a DMP for 16 months, we had 19 creditors, 17 stopped all % and two charge only a tiny amount of %. We've paid two of the creditors off now. We're with CCCS and I did a short blog for them about our situation - if you want to read it then google the info in my sig and you should find it.
Best of luck
SAAC

peteuk

Have to agree with the above...


Been on a DPM for 6 years with CCCS, at the time it was the best solution for us. I know 6 years sounds alot, but our payments have been changed to suit our situation i.e when wife was unemployed.

We now have no interest being applied to all our debts, although this has had an impact on our credit score (which was naf in the first place) we could not have continued the way we were.

Take some free advice from CCCS, but when dealing with others apply the general rule of thumb if it sounds too good to be true it usually isnt.