DMP and Direct Debits

jenki2

hello everyone,

been a while since i've spoke on here.
I've set up a DMP and received an email today to tell me my first payment will come out 1st Feb.

Do i now cancel all of my direct debit payments to my credit card companies?

I have two DD payments that come out on the last working day of the month. So 31st Jan to cover next month.

As my first DMP is 1st Feb. Do i cancel them or let those payments go as normal?

owen_money

Hi,
Yes it is a bit nervous, but well done for making the first step. Yes you can cancel the DD's now. I assume that the bank you have your current account doesn't have any links with you creditors?

Good luck

jenki2

Thank you
Indeed, my bank is linked. I'm in the process of transferring to a new entirely unlinked bank account elsewhere

madison-nyc

I cancelled all my current direct debits on the online banking with my old bank. It was very theraputic deleting them all!

jenki2

Very therapeutic indeed!

jenki2

Can anyone help RE: the payments at the end of the month? xx

gizmo111

You don't pay them the next payment comes out of your next months budget and is included in your DMP payment - otherwise you'll be starting the month short on your new budget.

nicp60

jenki2 wrote: »

hello everyone,

been a while since i've spoke on here.
I've set up a DMP and received an email today to tell me my first payment will come out 1st Feb.

Do i now cancel all of my direct debit payments to my credit card companies?

I have two DD payments that come out on the last working day of the month. So 31st Jan to cover next month.

As my first DMP is 1st Feb. Do i cancel them or let those payments go as normal?

Jenki, just a word of warning as I got into some serious trouble with the same issue. I did it the wrong way; took my dad's advice and went with a fee-charging company for my DMP. What they didn't tell me was that the first 3 months of payments went to pay their fees. Subsequently all my debts went into default (I hadn't missed any payments before the DMP) and I am now waiting for the defaults to drop off to restore my credit rating.

If you're with a charity you shouldn't have this problem, but I would double and triple check - you don't want things getting any worse or stressful for yourself.

owen_money

As nicp60 said make sure the DMP is with a free provider, dont pay for this service

gizmo111

nicp60 wrote: »

Jenki, just a word of warning as I got into some serious trouble with the same issue. I did it the wrong way; took my dad's advice and went with a fee-charging company for my DMP. What they didn't tell me was that the first 3 months of payments went to pay their fees. Subsequently all my debts went into default (I hadn't missed any payments before the DMP) and I am now waiting for the defaults to drop off to restore my credit rating.

If you're with a charity you shouldn't have this problem, but I would double and triple check - you don't want things getting any worse or stressful for yourself.

A fee free DMP cannot guarantee that the debts will not default, but they will guarantee all payments go to reducing the debt.

beth3735

Can you afford to pay both the CC direct debits and then the DMP direct debit on the 1st? If you can then I would just pay it this last time. But if you can't then i genuinely wouldn't worry as over time these companies will/may sell your debt, you will get a couple of defaults probably. So really paying this last time won't really save you anything.

But like someone has said above, make sure its with a free DMP company