Consequences of new budget on self managed debt plan, advice needed

Getmeoutofdebt

Hi everyone,
I could just do with some advice off someone who knows about / been on a self managed debt management plan.
I'm in a lot of debt and started my dmp in march after contacting National debtline who put me onto Cashflow. I did a Cashflow budget sheet / statement of affairs and used their template letter to ask my creditors to freeze interest and accept lower payments. They all did apart from Lloyds who are still charging interest.
In the meantime through selling stuff on ebay and using any spare money I had, I have paid off my Lloyds Overdraft of £1000. I still have a credit card with them and they are charging £80 a month in interest.
Tonight I got a call from Yorkshire Bank about my credit card with them, they only agreed to give me 3 months interest free and now want me to pay all the arrears AND they are putting the interest back up AND they are threatening to charge me fines for being in arrears. This will totally undo the good I have done in the past 4 months! They have asked me to send them a new budget sheet and a new proposal and I have 30 days to do this and them to agree to it or I get fined etc.
But........... because I have payed my overdraft off this will show as me having extra money available to pay to my other debts..... which on my budget sheet will be split between all my debts. My question is..... I have heard that if you increase payments, even by a minimal amount, then the CC companies see it as you now being able to afford the debt and they up the interest.... especially Barclaycard who I have Two cards with due to them taking over my Egg Card.
I can't risk everyone upping the interest! If they do i have just wiped out all the money I have managed to pay since they stopped it and I can't afford to go on!
Has anyone experienced this or do you have any advice? I don't know what to do! Like the woman from Yorkshire bank just said to me, If they are charging me and I'm still paying my lower payments then my debt is likely to increase!
Advice needed please.
Many thanks!!!

[Deleted User]

Ok, well start by not posting large amounts of text, people won't read it and you won't get the advice that you need.

I am self managed ...

Firstly, you pay what you can. Can you afford to pay more is the first question, can you afford to pay at all?

The bank will have a policy on what they accept and for how long, it does not matter how much you pay, for example my interest with my bank is frozen and I still pay double the contracted payment (when the system realises it will start to charge me again). There is only one exception, some banks when you reach a lower limit or % of arrears will sell on the debt as a rule or put it with formal collections.

As they have offered you 30 days, use the 30 days and write to them with a resonable request. Put down your expenditure and be resonable and what you use for food and clothing (take a good look around at the going rates)

Remember the bank don't fine you, they just charge you as per the contract that you have with them.

If you really can't agree with them, they will likely sell your debt on and then you may either get interest suspended or the option to settle with full and final settlement (cheaper).

Any questions let me know. Remember they won't wait forever and you will need to either pay up or expect defaults and the sale of the debt sooner or later, within 6 months if your payments are really that low! It's not the end of the world, I imagine you just want to get debt free and start a fresh...

HTH

orchid2010

Hi Getmeoutofdebt

My OH and I have been in a self managed debt payment plan since 2006.

The only advice I can offer is write to them, do not phone, I have had more success arranging reasonable monthly payments by sending in an income & expenditure to our creditors offering what we can afford to pay them. Also point out that if they add interest and charges you will never be able to pay the debt off.

As assj says they will eventually hand the debt over to a debt collection company and they are more likely to stop adding interest. They are also more likely to accept a reasonable full & final settlement offer in the future.


You just need to persist and be patient.

:grouphug:

Getmeoutofdebt

Thanks to assj and Orchid for your advice, I really appreciate it. I was expecting them to phone and hassle me for payment / threaten debt collectors etc but not so soon into my plan. Your advice helps as it makes me realise other people are managing to get through this type of thing and I feel a bit more positive about managing to do it myself. Also that if the debt gets sold that it may not be as scary as I am expecting.
I have written to Yorkshire bank with a new proposal, telling them I can't afford to pay any more but i'm willing to carry on unless they charge interest again in which case it seems pointless me even trying as my debt will go up. Fingers crossed I will get a positive reply.
Thanks again fot your help!
GMOOD