Are DMP offered by Payplan and CCCs etc really free?

kathfisch

gingersilverfox wrote: »

In another thread Sensible77 had £77k worth of credit card debts. Paying minimum monthly amount of say 3% would be £2310 or 2.5% £1925. Sensible and partner only earn £2k a month. The man's insolvent!! A DMP is the wrong thing for him. No amount of scrimping and saving (note I scrimp and save) will change this. Signing up to a DMP is so wrong. And yet the advice is to speak to a free DM company and suggesting he starts to scrimp and save.

The suggestion is to speak to a free advice company who can advise on the best route from a range of options... including IVAs and bankruptcy if those are appropriate. We cannot give definitive advice here because of the complexity of posters' situations and the fact that we aren't trained to advise.

You may be right that the poster is insolvent and that a dmp is wrong for him, no-one has actually said otherwise. Are you suggesting that the poster would be better off contacting a fee charging company whose only interest is in signing people up to earn their fee, rather than a free company (who neither gain nor lose directly from the advice given to each individual) who will give impartial advice?

Oldernotwiser

Eager_Elephant wrote: »

Yes I did read that but support does not have to mean in monetary terms.


EE

" This is because we receive funding from the credit industry who recognise the need for a free service."

"Included in this list are FreePay and PayPlan, who in turn receive funding directly and indirectly from those parts of the credit industry who believe that everyone should have access to free and impartial debt advice."

Just for the record.

gingersilverfox

Right this is getting out of hand now.

Firstly I do not work for any IVA companies, DM companies or any companies linked with debt advice.

Secondly, I am not suggesting that people should not go to free DM companies.

Bizarrely, I am saying that there is no such thing as a free lunch, ie free debt DM is costing us the consumer indirectly. Is this a good thing? I am advocating that fees should be inculded in every DM agreement.

in_debt_again_but_dealing_with_it

Back to my earlier point GSF what is the advantage in charging people already struggling with debt, more to repay what they owe - surely this would just encourage more people to opt for bankrupcy and mean very little/no money being repaid. In terms of the consumer paying be direct and tell us how we (yes even debtors still have to buy things so (indirectly) we have already in the past and still are) are paying?? People get into debt for all manner of reasons not simply overspending and most want simply to repay it!!

Joek_2

gingersilverfox wrote: »

Right this is getting out of hand now.

Firstly I do not work for any IVA companies, DM companies or any companies linked with debt advice.

Secondly, I am not suggesting that people should not go to free DM companies.

Bizarrely, I am saying that there is no such thing as a free lunch, ie free debt DM is costing us the consumer indirectly. Is this a good thing? I am advocating that fees should be inculded in every DM agreement.

What I don't understand is how it's costing me directly.

I'm with CCCS, and my budget was drawn up with them, I pay them the agreed amount, and ALL of this money goes to my creditors.

I don't profess to understand all the workings of a charity like CCCS, but what I do know is that they're only taking from me what we've agreed, and that every month I can see ALL that money being distributed to my creditors.

If it's costing the consumer indirectly, then it is imperceptable to me as it stands.

I totally agree about shopping around for anything to get the best deal, but that makes absolutely no sense when comparing CCCS/Payplan to a company who outright tells you that they will charge you.

Thus, I don't understand your logic, nor do I understand where you are going with your line of questioning.

Gemmzie

Yes they are really free.

Why do the financial institutions fund them? Simple, so that they get more of their money back. In my understanding, if a person goes bankrupt they get very little / none.
At least if their client is going through CCCS/Payplan, then the company is getting back what they lent, without interest in a lot of cases, which is better.

in_debt_again_but_dealing_with_it

If a person is repaying a personal loan through a dmp interest is still paid because its added at the onset of the loan and NOT removed for the dmp, therefore all monies paid in full (often with unnecessary, void ppi added too!), only interest frozen for cc and/or od - even that is not guaranteed. Just wanted to clarify incase any other cynics think people on dmp get a "FREE"/"EASY" ride - We simply want to repay what we owe!!

Bambywamby

I don't think Ginger is fishing for business, I think he is just playing devils advocate and creating controversial debate...nothing wrong with that!

Joek_2

You're right, but I don't really think there's a vast amount to debate here...

Everyone believes that CCCS and Payplan are the people to go to if you need financial help.

Apart from Carol Vorderman...She wants your money...

I_was_a_fool

Im worried people may be put off contacting companies such as CCCS & Payplan. By the OPs reckoning I am insolvent too, but I WILL pay off all my debts, and as quickly as I can. CCCS recommended IVA (Scottish Trust deed) but I opted for a dmp & they are managing it (most efficiently) for me.

It may be true that all consumers pay for dmps, but all consumers pay for bad debt in every form, in the same way as we all pay for shoplifting, insurance fraud & so on.

A dmp is the best way that companies get the most they can from debtors who are in financial difficulty.

I completely disagree that people should pay for their dmp, I see no point. Any fee paid would come out of the money that would otherwise be paid to creditors.