Free DMP's vs DMP's that charge

superbokkie

Hi to everyone on here, this is my first ever thread on here... I've read these forums for a while but first time I feel I actually need specific help from you all.

Quick summary of my situation.

I'm in debt... that's about it really.
I have two pay day loans that I'm struggling to pay each month and am in arrears for 2 t-mobile payments which isn't helping.

Anyways I've looked into DMP's and seem to have figured out the best ones out there, thanks to all the threads on here.

However after making a few enquiries to CCCP, Payplan, debt-line and 123solutions I've come with a few questions.

Originally I was going to go with a company that charges £20 a month for their service, until I found out that some charged nothing.

After enquiring and receiving the "plans" by email something struck me... and I basically need confirmation or contradicting.

What seemed clear to me is that the companies that charge for their services, pretty much take care of everything once you've signed the contract and the companies offering free services, send you a pack and leave you to it.

Am I wrong in thinking this?

I really just have had enough of struggling each month, I mean I would have pretty much starved to death by now had I not been helped by friends and relatives. I just don't know if I have the energy to deal with all of this by myself and am tempted to pay an extra £20 to have someone do it for me so I can put all my focus on finding a new job for example.

If I am wrong, please enlighten me. At the moment I have a pack from CCCP which is quite nice and clear but seems to just be a pack full of advice that I've already read about on here (close direct debit/switch bank accounts/ write to them etc...)

Also on a side note, I've read quite a few bad reviews from the Free companies. Saying that everything seemed great at first but when people thought they were close to almost being debt free, it turns out that the interest had not been stopped and they still have many months of payments to go.

Overall, after reading a lot of comments saying to avoid companies that charge money, I'm wondering whether paying this extra £20/30:
-gets you more result
- makes sure they work for you harder than companies that charge nothing
- helps you avoid the hassle of dealing with it on your own (writing to creditors etc..)


I thank anyone in advance for the time you take to read and reply to this.

Lensman_2

I don't think there is anything your £20-£30 a month will get you except a veneer of spin. You will still have to deal with the calls and letters etc.

Personally I would take a fresh look at your situation. Can you dig yourself out of one payday loan by cutting back for a month? The interest from that (that you won't be paying) could go against the other next month.

There are definite advantages to not going on a DMP. Your toasted credit file for the next 6 years is one...

superbokkie

I see what you mean.

Ideally I'd like to avoid it but my credit rating is pretty bad as it is I didn't really think it would make much of difference.

Basically I've managed for a few months to keep up with payments but this month cost me dearly, I was hit with higher than expected bills, which made me miss a couple payments... I don't have the money to pay them right now and any money that I will get the following month, (which is meant to go for next months payments) will go to repay the previous months payments and so on. Never ending cycle and I am not sure how I'm gonna get out of it.

Another concern is that my T-mobile contract would be stopped and they would ask me to repay off my entire contract.
I'm also in a similar situation with one of the pay day loans.


I'm not really sure how to deal with T-mobile on this. They expect me to pay the last two missed payments very soon. I'll be able to pay the remainder of my contract as usual every month, but how do I deal with the two missed payments?
Could I ask them to divide the cost (£120) into 12 months and basically add an extra £10 to every monthly payments? WOuld that work?

Growurown

superbokkie wrote: »

Overall, after reading a lot of comments saying to avoid companies that charge money, I'm wondering whether paying this extra £20/30:
-gets you more result
- makes sure they work for you harder than companies that charge nothing
- helps you avoid the hassle of dealing with it on your own (writing to creditors etc..)


I thank anyone in advance for the time you take to read and reply to this.

I have had pretty good results using StepChange formerly CCCS. Most of my creditors have stopped interest without me having to put in much effort. So no I don't think paying for the service gets a better result and just because you pay them doesn't mean they will work harder for you. They may help avoid hassle but having never used one I can't say for sure.

It took a bit of work setting up the DMP but now it is up and running it takes very little of my time and I would rather have the money to put towards my debt than pay a provider. As to people getting to the end of the plan and still owing money that is due to them not updating the balance on their plan regularly. StepChange assume interest stops and reduces the balance on your statement accordingly. However they don't know if the creditor is still charging interest and how much they are charging. That is down to you to check on a regular basis and you can update your balances on your statements via the website.

superbokkie

Ok thanks for the info. I will probably stick with Stepchange, my only concern is all theyve done after a quick phone call is send me a pdf pack and that's it. I was expecting a little more directions but I'll see how I get on.

I think I heard them mention they don't deal with mobile phone bills in arrears, so i'd still need to figure out a solution for that problem.

DaveK1971

Hi,

I'm new on a SterpChange DMP and so far they have been really good. There is a fair bit of work to be put in (I'm on the net now to reply to 3 emails from creditors) but it's just something you have to commit to. I can't see the paid companies being better, would not really trust them.

In terms of your mobile bills I guess it depends how much you our and how much you have as your budget for the month after the DMP payment would come out. I'd probably ring them or go into a store and just say that you are struggling and see if they can offer advice. Can they lower your tariff? It may sound drastic but do you have a nice phone? If you have a decent smartphone that you got on the contract you could sell it and buy a cheap pay as you go model to use with your sim and then pay off your bill with the cash.

Maybe ask on the "ask a debt advisor" thread for better advice than this.

Hope it works out.

Deep_In_Debt

The firms that charge will do no more for you than those that don't charge (although the sharks that charge will tell you differently!). In fact, they may do less for you as they know they are getting a fee from you every month and making money out of you - that monthly fee could be going to clearing your debts and making you debt free sooner. There is no guarantee that either the non fee charging companies or the ones that charge will get interest frozen as it's up to the creditor to decide.

I'm with StepChange and have been for some years and they were great at setting up my dmp and getting it all going and keeping it going. Many of my creditors have still kept interest frozen 4 years on. CCCS (StepChange) set it all up for me, but I still had to deal with a barrage of phone calls and letters for the first few months whilst things were settling; you will still get that if you go for a fee charging company.

StepChange probably just sent you info so that you can decide whether it's right for you - they are not selling you anything and probably leaving the ball in your court. The firms that charge want your business, so they will probably be giving you what you want to hear.

Good luck with it all.

Time_to_face_the_music

Deep_In_Debt wrote: »

I still had to deal with a barrage of phone calls and letters for the first few months whilst things were settling; you will still get that if you go for a fee charging company.

I think many people find they get nore hassle from their creditors with a fee charging company as they generally hold back the first 2 months DMP payments as their up front fee, then charge a monthly service charge after that. So it's up to 3 months before the creditors get anything paid to them.

We are with StepChange (ex CCCS) but given our time over, we would do a self managed DMP which you can do via the CAB online

http://mymoney.nedcab.org.uk/moneyadvice/dmp.asp

Whatever you do, don't pay for something you can get for free and avoid financial vultures!

Good luck to OP and please let us know how you get on