Debt Management Plan - Bad credit mortgage availability?

flintoftfinance

My husband and I are in a debt management plan and have been making payments into the plan for the last 6 years. We haven't missed any payments but have been marked down as having defaults. We are currently renting but as our landlord now wants to increase the rent am wondering if we could possibly get a mortgage. I have seen bad credit and adverse mortgages being advertised and wonder whether this type of mortgage would apply to our circumstances?

Is it worth trying a mortgage broker?

Grateful for any advice.

Thanks.

Leon_W

No it is not possible to get a mortgage.

To be frank. If you put yourself in the position of one of your creditors, how would you feel about someone that owed you money having enough saved for a deposit ? You will have to complete the DMP first I'm afraid.

flintoftfinance

Thanks for your reply. I guessed that would be the case but wanted to check as we are paying a lot of money in rent and it made sense to try and buy a house instead.

I take on board your points and do agree, but find it so frustrating when you hear that someone who declares themselves bankrupt can then obtain financial products again the future once they have had the bankruptcy discharged! I am doing my utmost to repay my entire debt without even going down the road of an IVA and am penalised more.

A hard lesson learnt.

Thanks again.

Leon_W

I suspect quite a few people are put into DMPs when really they shouldn't. Now, I'm not saying this is the case for you but I have seen people who have been in DMPs for years and years repaying £20k, £30k, £40k even. So they've been repaying this money for 6+ years and then probably have to wait a further 6 years until the accounts drop off the credit report as the defaulted account stays on there 6 years from SETTLED not defaulted. You may as well just default and not bother paying.

Bancruptsy would have been a far better option. Quick, clean, debts gone, your money's your own and you have a definite end date.

I'm pretty sure it's because the likes of Payplan and CCCS are funded by banks and credit issuers that DMPs are recommended as otherwise they wouldn't get anything back at all. Turkeys don't vote for Christmas !

flintoftfinance

I think you are right and would warn people off DMPs now. We are paying a large monthly fee to the company who organised it as well. Just thought we were doing the right thing at the time by paying off our debts.

We were thinking of offering a settlement figure to some of the companies at maybe 60% of the amount owed. Do you think this is worth a shot?

Leon_W

Sorry flintoftfinance without knowing your personal circumstances I couldn't tell you either way. All I wanted to say is that a lot of people are talked into DMPs where they might be better off just defaulting and not repaying a penny. It goes against the grain me saying that but that is the system we have.

sammyjammy

If you are managing your debts through a fee paying company you really ought to consider doing this through CCCS or Paypal that don't charge a fee, that money could be going towards your payments.

Sorry if I've misread your post.

geoffky

Get your money going towards your debts and not a dmp company...
Contact cccs