DMP - Interest and CCCS payment date

Time_to_face_the_music

We are in a DMP with CCCS. We started a couple of months ago with a massive debt of over £81,000 but we can manage a large monthly payment so our DFD is approximately 4 years.

We have really got into the right mindset and are determined to pay off our debt ASAP and are currently aggravated at 3 creditors who are still piling on interest charges, 2 out of the 3 have actually increased the interest. This means that over £5300 of payments has added up to only £2400 paid off our debt :mad:

We are now trying to look at other ways to pay off the debt more quickly especially to these 3 and are prepared to throw extra money as these. We know this is outside CCCS guidelines/advice on fairness to all creditors but fairness is not our top priority at the moment :rotfl:

Another thing that is playing at the back of our minds is the CCCS payment date. OH gets paid on the 21st of each month, I get paid on the last Friday of the month, CCCS payment goes out on the 1st but then this isn't paid until the 25th. If we could make a payment on the 21st, we would immediately be ahead one month in our payments but wqe assume this would mean managing our own DMP and dropping CCCS

Any opinions or advice would be extremely welcome. We have already learned tons of stuff from this forum and are very grateful for people sharing their experience and knowledge :T

Gimpsdad

Why don't you propose a 100p in the £ IVA? You have legal guarantees of interest freeze and creditors would be mad not to accept it. Yes, you would pay IP fees on top of the debt, but with a reputable provider these would far and away be a hell of a lot cheaper than ongoing interest and charges.

Time_to_face_the_music

Gimpsdad wrote: »

Why don't you propose a 100p in the £ IVA? You have legal guarantees of interest freeze and creditors would be mad not to accept it. Yes, you would pay IP fees on top of the debt, but with a reputable provider these would far and away be a hell of a lot cheaper than ongoing interest and charges.

Excuse me if I am incorrect but doesn't an IVA last for 5 years? Why would we do that when we can pay off our debt in 4 years on a DMP? Or am I missing something?

Gimpsdad

Yes, you are missing something.

An IVA does usually last 5 years, but it isn't always so. It can last as little as 1 day. Amazingly, those whose livelihood depends upon creditor payments to them will generally advise you against doing what is best for you if it conflicts with the best interests of said creditors and their own income stream. Numerous others seem to have been seduced by the same blurb, but the law is the law and cannot be argued with, opinions are irrelevant when faced with fact.

You have 2 hopes of paying off your debt in 4 years on a DMP, Bob Hope and No Hope. You are (probably) paying around £1760 per month on your DMP. Assuming interest freeze (ha!) then that is around 4 years. However, 55% of your payment is going in interest and it is going up (your words not mine). Still think 4 years is right? No, over 8 and nearer 9 at your current rate. CCCS get paid around 10% as a commission for collecting your debt out, but you don't pay it yourself, therefore it is free. Work out their commission at this rate and then compare it with the cost of a legally binding and truly impartial solution.

You can propose an IVA to pay all your debt back in full, and as soon as it is done you are free. That may be 3 years, 4 years, or whatever, but the IP fees of someone on your side will be a hell of a lot less than CCCS would have claimed in commision over the life of your debt, and you will also save a minimum of £800 per month in legally frozen interest charges.

Time_to_face_the_music

Gimpsdad wrote: »

Yes, you are missing something.

An IVA does usually last 5 years, but it isn't always so. It can last as little as 1 day. Amazingly, those whose livelihood depends upon creditor payments to them will generally advise you against doing what is best for you if it conflicts with the best interests of said creditors and their own income stream. Numerous others seem to have been seduced by the same blurb, but the law is the law and cannot be argued with, opinions are irrelevant when faced with fact.

You have 2 hopes of paying off your debt in 4 years on a DMP, Bob Hope and No Hope. You are (probably) paying around £1760 per month on your DMP. Assuming interest freeze (ha!) then that is around 4 years. However, 55% of your payment is going in interest and it is going up (your words not mine). Still think 4 years is right? No, over 8 and nearer 9 at your current rate. CCCS get paid around 10% as a commission for collecting your debt out, but you don't pay it yourself, therefore it is free. Work out their commission at this rate and then compare it with the cost of a legally binding and truly impartial solution.

You can propose an IVA to pay all your debt back in full, and as soon as it is done you are free. That may be 3 years, 4 years, or whatever, but the IP fees of someone on your side will be a hell of a lot less than CCCS would have claimed in commision over the life of your debt, and you will also save a minimum of £800 per month in legally frozen interest charges.

I have spent most of today looking at the figures and I don't think it's as bad as you have painted it. Interest charges were in place for all creditors for the first month, plus we were hit with late charges, unpaid charges and over our limit charges. All but 3 creditors have now stopped interest or lowered it to a very small rate. Last month the total interest charges were £280, including £24 of over limit charges which will not occur again. At that rate, this means that each month we will have £1500 going towards our debts which would give a DFD of 52 months.

On the accounts still charging interest, the interest will go down as the balances drop and as I have said, we intend to hit these debts in addition to the DMP payments, so we don't think 4 years is unrealistic and your estimate of £800 interest per month and a DFD of 8 to 9 years doesn't make mathematical sense to us.

My original question was really more about payment dates and seeing if we could take advantage of the month's payment hold by CCCS and hence get one month ahead with our payments, but I think we could only do this by self adminstering our DMP and am not convinced we are ready to do that yet. Maybe this time next year when everything has settled down and the creditors are used to getting the monthly payments.

Thanks very much for your advice. You seem like someone who tells it straight so I hope you don't mind me asking what is your gripe with CCCS?

Gimpsdad

Fair question.

My gripe with CCCS is that they act in creditors interests firstly and debtors secondly, but as they are free to users it doesn't matter to the regulatory authorities as it is not seen to cost anything, and therefore cannot be criticised or examined. This seduces the media, and non professionals in the debt industry also, into believing that CCCS is beyond reproach.

The simple fact is that they aren't. By their own blurb, they believe that only 3% of clients with serious debt problems would benefit from IVA. They have 1 IP to look at IVA's for over 10,000 enquiries per month. Almost all of those enquiries will come directly or indirectly from creditor recommendations. Given that they have to pay wages, heat, light, rent etc like everyone else, then the claim that they are impartial when they recommend the vast majority of thier clients to embark upon DMP's which maximise the return for their paymasters and also their own commission income is risible. There are hundreds of threads, if not thousands, on MSE where people are on DMP's for exceptional lengths of time. Any reputable commercial company with both solutions in house that operated a ratio of 3 to 97 of IVA's to DMP's would be shut down by the OFT. A more realistic ratio is 35 to 65, so you are over 11 times more likely to obtain a legally binding solution with a firm that is not paid by creditors than by one which is.

If you are fortunate enough to obtain an IVA with CCCS then you will pay the same fees that you would elsewhere, they are a business as much as anyone else. Go to CCCS for an IVA if you are self employed and you won't get one, you will be referred to a commercial organisation. Why? Make your own mind up on that one. They defy OFT guidelines on DMP payments, because they claim special dispensation from the OFT to do so. They claim interest on held funds which again is against OFT guidelines. Whilst I am sure that CCCS would not mislead anyone on this, I have yet to see any sort of confirmation from the OFT that backs up their right to do things that all other organisations would face serious examinations for should they operate to the sane standards.

Despite the differences between the way they operate, and the way that everyone else is expected to operate, my main gripe is that tens if not hundreds of thousands of people are on DMP's with CCCS that benefit only creditors and CCCS and not the debtor. For the avoidance of doubt, the only ways that can guarantee an end to debt within a set period for debtors are Admin Orders (a bit obselete now, but still legal) DRO's, IVA's, Protected Trust Deeds and bankruptcy.

There aren't many people posting on here who are on any of these solutions, you are all on DMP's, that's my gripe. Don't get me wrong, there is a place for DMP's, the other solutions listed above will not suit everyone and if a DMP is right, then I would say that CCCS is a good place to get one. There is no way on this planet though that you can argue that DMP's should make up the vast majority of a debt agencies books if said debt agency is giving appropriate advice in every case.

Time_to_face_the_music

Gimpsdad wrote: »

Fair question.

My gripe with CCCS is that they act in creditors interests firstly and debtors secondly, but as they are free to users it doesn't matter to the regulatory authorities as it is not seen to cost anything, and therefore cannot be criticised or examined. This seduces the media, and non professionals in the debt industry also, into believing that CCCS is beyond reproach.

The simple fact is that they aren't. By their own blurb, they believe that only 3% of clients with serious debt problems would benefit from IVA. They have 1 IP to look at IVA's for over 10,000 enquiries per month. Almost all of those enquiries will come directly or indirectly from creditor recommendations. Given that they have to pay wages, heat, light, rent etc like everyone else, then the claim that they are impartial when they recommend the vast majority of thier clients to embark upon DMP's which maximise the return for their paymasters and also their own commission income is risible. There are hundreds of threads, if not thousands, on MSE where people are on DMP's for exceptional lengths of time. Any reputable commercial company with both solutions in house that operated a ratio of 3 to 97 of IVA's to DMP's would be shut down by the OFT. A more realistic ratio is 35 to 65, so you are over 11 times more likely to obtain a legally binding solution with a firm that is not paid by creditors than by one which is.

If you are fortunate enough to obtain an IVA with CCCS then you will pay the same fees that you would elsewhere, they are a business as much as anyone else. Go to CCCS for an IVA if you are self employed and you won't get one, you will be referred to a commercial organisation. Why? Make your own mind up on that one. They defy OFT guidelines on DMP payments, because they claim special dispensation from the OFT to do so. They claim interest on held funds which again is against OFT guidelines. Whilst I am sure that CCCS would not mislead anyone on this, I have yet to see any sort of confirmation from the OFT that backs up their right to do things that all other organisations would face serious examinations for should they operate to the sane standards.

Despite the differences between the way they operate, and the way that everyone else is expected to operate, my main gripe is that tens if not hundreds of thousands of people are on DMP's with CCCS that benefit only creditors and CCCS and not the debtor. For the avoidance of doubt, the only ways that can guarantee an end to debt within a set period for debtors are Admin Orders (a bit obselete now, but still legal) DRO's, IVA's, Protected Trust Deeds and bankruptcy.

There aren't many people posting on here who are on any of these solutions, you are all on DMP's, that's my gripe. Don't get me wrong, there is a place for DMP's, the other solutions listed above will not suit everyone and if a DMP is right, then I would say that CCCS is a good place to get one. There is no way on this planet though that you can argue that DMP's should make up the vast majority of a debt agencies books if said debt agency is giving appropriate advice in every case.

Thanks very much for your open response. We never thought an IVA was suitable for us because we were determined to pay off every penny of our debt and the way they are advertised seemed to be all about wiping off debt and not having to pay money back that you owe.

Due to our ages (54 and 52) we were also concerned about reports of having to stop making pension payments and the equity in our house, though that is currently tied up in a secured loan which will finish around the same time as our DMP. Stories also abound about IVA requirements being much tighter financially than for a DMP and while we don't want to live a luxurious lifestyle, we didn't want to be unable to buy birthday and Christmas gifts for our child/grandchild and also have the worry of a very high mileage car which needs to drive an additional 85 miles per day. We both have professional jobs and need to look smart and had been told that an IVA considers even clothes a luxury so forget about buying them. Of course this could all be wrong but all of these things made us think a DMP was our better option even before we even approached CCCS.

My original post was a gripe about the 25 day holding time of CCCS and I still think this could be shortened. That being a month ahead in our payments is really nagging at me at the moment. Maybe we will give a self administered DMP a go next year when we feel more confident. I have been looking at our DMP figures today and need to speak to CCCS anyway because the payments do not appear to be proportional to the debt and we want to know why.

Dare I go on to ask what you think of Payplan?

Gimpsdad

Yes you can.

Where a DMP is appropriate they are also a good bet as they charge no fees to the debtor. I am not aware that they hold your money for up to a month either. They are not a "charity" as CCCS are, and so would presumably have to fall into line with OFT guidelines along with the rest of the industry. I may be wrong on that, but I don't think so.

As one who has orgainsed thousands of IVA's or bankruptcies for those that had previously been on DMP's my own anecdotal evidence would say that around 90% of those in DMP's will achieve a lower repayment per month in IVA or BR than they would in a DMP, so I would slightly disagree with your point, but on balance you are probably on the right solution. It never does any harm to explore all solutions though. The only question now is who does it for you, Payplan, CCCS or do it yourself. You can make a case for any really, but if you are not comfortable with CCCS methods then you have a decision to make.

roni08

Quote - Time to face the music:-


"On the accounts still charging interest, the interest will go down as the balances drop"

Unfortunately this may not be the case. I am paying off my debts through a DMP and have been for 4 years, one of my creditors has now decided that my monthly payment is higher than the mimimum payment and are charging interest and also treating my monthly payment as a normal one, not a pro rata DMP payment. I shall be taking this matter further but be warned, some creditors do play hardball even if you are paying a good amount each month to clear your debts as quickly as possible.

They are more interested in lining their own pockets than trying to help you repay your debt to them.

Hopelessly_Hopeful

Gimpsdad wrote: »

Yes, you are missing something.

An IVA does usually last 5 years, but it isn't always so. It can last as little as 1 day. Amazingly, those whose livelihood depends upon creditor payments to them will generally advise you against doing what is best for you if it conflicts with the best interests of said creditors and their own income stream. Numerous others seem to have been seduced by the same blurb, but the law is the law and cannot be argued with, opinions are irrelevant when faced with fact.

You have 2 hopes of paying off your debt in 4 years on a DMP, Bob Hope and No Hope. You are (probably) paying around £1760 per month on your DMP. Assuming interest freeze (ha!) then that is around 4 years. However, 55% of your payment is going in interest and it is going up (your words not mine). Still think 4 years is right? No, over 8 and nearer 9 at your current rate. CCCS get paid around 10% as a commission for collecting your debt out, but you don't pay it yourself, therefore it is free. Work out their commission at this rate and then compare it with the cost of a legally binding and truly impartial solution.

You can propose an IVA to pay all your debt back in full, and as soon as it is done you are free. That may be 3 years, 4 years, or whatever, but the IP fees of someone on your side will be a hell of a lot less than CCCS would have claimed in commision over the life of your debt, and you will also save a minimum of £800 per month in legally frozen interest charges.

Great post. Thanks for sharing. Is it just me or does anyne else think it is outrageous that CCCS don't declare the comission?!

HHx

freshstart11

Its one reason why I felt it was better for me to undertake it all myself.

I felt it would instil in me the lessons I needed and get in to the habit of checking all my accounts every day but I know that I am only helping myself with this - no one else!