DMP with company VS doing it yourself?! Please help!

chelle85

hi everyone,
im totally new to this so forgive me if i rant abit!

i have been with a debt management company since november 2011 (DFH Limited) and have entered into a debt management plan where i pay £250 per month with a £35 going to DFH as a fee.

Times are still quite hard at the moment so i sought help from CCCS who have advised that i should cancel my DMP and offer a smaller payment myself to my creditors by writing to them. they assured me that this is the best course of action as £250 a month isnt sustainable. i have spoken to DFH before but they asked me to increase my payments and didnt fill me with confidence when i said i couldnt.

im so confused what to do! im terrified of bailefs or court proceedings

any advice would be so so greatly appreciated! x

BlushingRose

OK, firstly, well done for trying to get this sorted.

Next thing, stop giving £35 a month to a fee paying company when CCCS (for example) will do the same thing without charging you a fee.

We are currently paying £242 a month to all our creditors with CCCS, although they would like us to be able to pay more a month.

There are people on the boards who are doing a 'self managed' DMP and I'm sure they'll be along soon to offer advice

cc4rhu

I agree with the above. Stop wasting £35 per month. Stop the payment to them and write to all of your creditors yourself offering a token payment of whatever you can afford, clearly explaining that you are working with CCCS, Payplan or whatever and will forward an accurate I and E statement to them asap. I'm not especially knowledgable about Baileffs (ask CCCS) but I'm pretty sure that they can only be used for some debts such as Council Tax arrears and not credit cards, loans overdrafts etc. Court proceedings is a possiblity if your lender wishes to issue a CCJ (you don't have to attend) but in my experience the more you keep them informed and prove to them that you're doing your best the less likely this is

chelle85

Thank you, I had a feeling this was the way to go but just anxious about what may appear as a 'default' on a dmp which I was told is very very bad :-S

cc4rhu

The lenders would have issued defaults anyway, just a matter of time. Some issue after 1 payment missed. One of mine issued a default 4 years after I started my DMP which annoyed me as I won't have a clear file until 10 years after starting the DMP.

chelle85

Oh that's terrible that they did that!

I know I will already have defaults but I'm worried about defaulting on a dmp agreement - is that different? If I cancel the dmp but offer a lower payment direct to my creditors (as advised by CCCS) will this look even worse? I'm not bothered about having a bad credit score as I have absolutely no intentions of getting credit in the future but just concerned about what legal action my creditors could take!

Sorry for waffling, as u can probably tell, this has been whirling round my head all night!!

freshstart11

Im on a self managed DMP - its hard I will not deny that but if you have then strength to do it then great - i have all the defaults already and think it MAY take 6 years to clear (MAX) so once thats all stopped my debt should be off my record as well xx

if you want ANY advice etc please PM me xx

chelle85

Wow! You seem to know your stuff! I have no idea when I'll be debt free if I go it alone. I have about £14,000 debt and have been paying £250 a month but this isn't sustainable. Dfh reckoned I'd be debt free in 5 years but I later found out that didn't include interest charged by creditors. Also dfh advised me to just stop paying my creditors and until that point, I hadn't defaulted (although was very close a number of times). I just want something manageable in place. I know it won't happen overnight but it would be such a relief not to struggle and worry about money all the time.

Thank u so much to everyone for your time in replying xx

freshstart11

I would stop DFH for the simple fact that £35 of that could go to the debt not them. Paypal or CCCS are better

Have you a SOA you could post? Also if you use the snowball calculator you can get a good idea on everything


http://www.makesenseofcards.com/soacalc.html

http://www.whatsthecost.com/snowball.aspx

xx

bargainbetty

If you do an SOA, it will show you what your real expenditure is. Use that and the help from the CCCS to identify what funds you have left over for debt repayments.

Once you know what it is, be it £250 or less, work out how much each of your creditors is due by percentages. (If you owe £10k total, and HSBC hold £1k of it, you give them 10% of your repayment figure). CCCS will help you with this too.

Write to all your creditors yourself, explaining that you are moving to a self-managed DMP, so that the money you have been paying in fees will go towards your debt instead! You'll be saving £35 per month towards it anyway.

If you send each of the creditors a letter with your new income/expenditure sheet (you don't have to give them all the details, an edited version will do), details of your new monthly payment and ask formally to freeze all interest and reduced payment charges if they haven't already. It won't hurt to ask. They might ask for more, but if you include the breakdown of debts, they will know that no judge will back their claim, as you are giving everything you can, so stick to your guns. Do everything in writing - and keep records of it.

Obtain all their bank details and set up your own standing orders to the creditors - do not, under any circumstances, let them do direct debits. Take this over as soon as possible. Even if you have to call them before sending the letters to get the bank details! Once you have these set up, you can cancel DFH, and tell them where to sling their hooks. If they try to pressure you into staying or paying more, feel free to tell them to sod off. You do not need them. They want your money. You do NOT need them.

You aren't defaulting - DMPs are subject to revision as circumstances change. Keep making payments, keep them informed when things change and check your figures once a year to make sure you are paying everyone fairly.

Good luck.

chelle85

Thank you all so much, it's such a relief to get advice from real people rather than a company taking advantage of a stressful time and doing things to benefit them. Thanks everyone xx