Can payday loans be included in a DMP?

Ldot1981

Hi,

I am another victim of the dreaded payday loan cycle. On the knowledge that I would be receiving some money from an insurance claim I have borrowed money from several payday loan companies. I have repaid the interest on several occasions but am continually left struggling with the finance charges and am now fully aware that I cannot keep borrowing from one source to pay another

I know these companies (Wonga.com and Quick Quid) make you sign a declaration that you will repay the full amount no matter what but CAN THESE DEBTS BE INCLUDED into a dmp? What is the best way to go about this? I know I would need to change my bank account as they have my card details and account details, is there anything else I would need to take into account?

I don't expect them to take this decision easily but I just cannot afford to pay at the rates they want.

Laura

Tixy

Hi and welcome

Yes you can include them in a DMP. As you know the first step is preventing them accessing your money themselves, so a new bank account with an unconnected bank.

Do you have other debts as well you want to include in a DMP? Best way to set up a DMP is to contact one of the charities for advise either on them setting up a DMP for you, or if you don't meet their criteria for a managed DMP they'll help you set up your own, provide you with advice, template letters etc.

If you enter a DMP or just set up repayment plans with them (after protecting your funds first) then they would issue a default on your credit file the same as other creditors do.

Ldot1981

Thanks for the reply. I know I need a new bank account but would it have to be with a completely different bank? I don't owe my bank money so could I just not ask them to close my current account and re-open a new one? Not sure if this is possible just wondering?

Yes I do have other debts old ones which I would also include. I have completed a debt remedy survey with CCCs and they have suggested a DMP which I would be happy to undertake as long as I could include the Payday loans as these are the debts which are constantly eating away at my money after paying my bills.

thank u

Tixy

No needs to be a new unconnected bank. Otherwise your bank may just pay out to the payday loan company request and then offset funds from new account to pay off the unauthorised overdraft on the old/closed account.

In terms of the DMP with CCCS, whilst evryone has different experiences quite a few people have said their payday loan debts were amongst the first to write to agree to a DMP.

monkeyfacesmummy

Hi Ldot,

I am also currently in the dreaded payday loan cycle. I have no excuses - I was just incredibly stupid, and instead of admitting there was a problem earlier on, kept borrowing and borrowing... Sigh.

While I can't advise you about DMPs, I will say that I borrowed a fair amout of money from Wonga (no experience of Quick Quid but have used others), and like you got to the stage where I just couldn't afford their repayments or even the interest only option. I was incredibly apprehensive about contacting them, but when I did they were very accomodating and we've agreed a repayment plan over the next 7 months, whereby they've frozen any interest and charges too. I just wanted to give you some hope that while they are a terrible way of borrowing money, and it's awful getting to the point where you can't afford even the interest repayments, there is light at the end of the tunnel, and they can be helpful. Afterall they want their money back! I have had a less positive experience with Payday Express, where I explained my situation to them, and they sent me a very nice email stating that really unless I die or a spouse has died or is critically ill, then they won't agree to a repayment plan!

Good luck.

Ldot1981

Thank you for you replies you really are giving me some great advice and its so relieving to know there is light at the end of the tunnel in all this!!

Monkeyfacesmummy can you confirm whether you contacted Wonga direct yourself or through a DMP like the ones being offered by CCCs? I am just wondering whether I should contact them myself or just leave it for CCCs to arrange bearing in mind I have other unsecured debts the CCCs would need to put on to a DMP anyway.

Ldot81

monkeyfacesmummy

Hi Ldot,

I contacted them directly. I had a list of all my other debts to hand too just in case they queried those (some want to know how many other lenders there are and how much you owe).

When I first contacted them, they basically told me that I would need to contact them on the date the repayment was due (i.e. after they had tried to take the money and the direct debit had failed). I wasn't convinced, but my bank had cancelled the debit card anyway so there wasn't much else I could do at the time. Sure enough on the pay day they tried to take the money, the DD failed, and then they sent me an email requesting repayment. At that stage I phoned them again and explained financial difficulties etc, and they put me through to the collections department where they worked with me to set up the repayment plan.

I don't know very much about DMPs so hopefully someone else will be along soon to advise you better as to whether to set up arrangements directly, or do it through the DMP.

Tixy

If you are entering a DMP anyway (or considering one) then all your debts will need to go into your DMP and be treated equally. So best to let the charity contact them.

If someone only owes on payday loans and can realistically clear them in less than a year then it can work to get in touch direct with the pdl companies (though as mentioned above some are more accepting than others, so it can be hard work and you just need to keep paying the amount you can afford regardless of them saying its not enough etc).

[Deleted User]

Ldot1981 wrote: »

Thanks for the reply. I know I need a new bank account but would it have to be with a completely different bank? I don't owe my bank money so could I just not ask them to close my current account and re-open a new one? Not sure if this is possible just wondering?

Hi Ldot

From experience when I tried this I found the 2 bank accounts were just linked together... the bank at the time could see the PDL's situation :eek: and were honest in telling me they would have to allow the funds out of the new account that is why it is
always best to open account at different bank, it just isn't worth the risk hun

[Deleted User]

@ monkeyfacesmummy, if you still experiencing horrid problems with Payday Express accepting a plan - write formally complaining and seek help from their trade association - CFA - Consumer Finance Association

On a real personal level, if or when they have agreed, make sure you get the final figure repayable in writing, I ended up paying two lots of interest so their one to watch closely

If your having problems paying (they won't give bank details) then you can pay cash in at a Money Shop.

Hope this helps x

monkeyfacesmummy

Thank you Deleted User, that's really helpful. I have a list of money related tasks to do tomorrow, so I'll write out to them as you have suggested. I have had various emails from them stating different amounts owed, so I will make sure they don't try to con more out of me after what you've said :-) x