Consequences of having a Debt Management Plan

ktez

Hello everyone

Apologies if this has been covered a trillion times....

What are the negative consequences of entering into a DMP? If the main thing is your credit rating goes to pot, how long after you have paid off your debts does this last for?

TIA for any advice!

camuk81

Try having a read of: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/PlanYourWayOutOfDebt/DG_183575

This will affect your credit rating from what I've seen. Have a look at the DMP support thread as well

https://forums.moneysavingexpert.com/discussion/3723081

ktez

Many thanks for the links. I'll go check them out now.

antonic

Think of it the way I did ...

Do I trash my credit record for 6 years to pay off a debt via a DMP (in my case 7 years) as I cant manage it anymore OR

Do I keep on struggling month by month to live and make the minimum payments ?

I chose Option A, Option B is really only for those who love having credit, in the last 6 1/2 years NOT having credit has been nice !.

If you do go down the DMP route choose CCCS or Payplan as they dont charge to run it for you.

okwell1999

This will affect your credit rating from what I've seen.

Better_Off_1983

They TRY and stop interest and charges, but it cannot be guaranteed- it depends on the creditor.

Its best not to go to one that charges... it defeats the whole object.

plum44_2

I have been with CCCS for 18 months when I ran out of credit and had to default anyway.

It means I now never use cards, I am not paying interest and I have paid off 17k of a 34k debt

For me a DMP was a lifesaver. Damaged credit for another 4 years is a small price to pay for the financial freedom this will bring. It has made life 100% better.

DS4215

For anyone who has, or needs to get, Security Clearance for their work (Police, etc) then if anyone takes out a CCJ against you it can cause problems. Whether you can negotiate with a creditor along the lines of "Do that and I lose my job and you won't get anything" will work I don't know, but if you already have a CCJ and apply you will probably be declined.

National_Debtline

Good point DS4215

For anyone who ever finds themselves in a position where a creditor is threatening a CCJ and they are looking to apply for/remain in such a job, there are things called Tomlin Orders which can be sought - these are legally binding court orders but won't register on one's credit file in the same way as a CCJ would. Anyone in this position should seek advice from the usual reliable sources ASAP.

Hatecreditors.com

I’ve been on a DMP for 2 ½ years and haven’t looked back. In the early stages, I worried sick about my credit file and what impact the DMP would have in the future. But then I realised the priority was paying off the debts and focusing on a debt free date regardless of the consequences.

If you can’t live today what’s the point in worrying about tomorrow.

ktez

Many thanks for all your advice folks.
I have just completed the online SOA tool via CCCS and asked that they send me the relevant forms. Do CCCS automatically accept you after advising you require a DMP or do they refuse some people once you return the paperwork?
Also, I was unsure about how the online tool worked as I did not want to put my (huge) overdraft in as I would prefer to hold onto that. It is with the Halifax where my wages go into.
Also, do I automatically need a new bank account? How will I get one if I have a poor credit rating?
Any help would be gratefully received