DMP & Mutual Support Thread - Part 9

Growurown

ianmak wrote: »

Hi all, need a bit of hand holding, and advice of where to go next.

my DMP company have been going through the motions of setting up a 'Full and Final IVA' to settle my debts. I have 9k to offer, on approx 16-18k of debt. After fees they will offer £4450 to creditors! Is this right and normal? They keep saying it's better than me settling on my own, but can't help thinking what a waste of money! Surely my creditors soon me offer money without an IVA?

I have absolutely no idea ianmak. I have to agree it does seem like a big waste of money, and that seems to be a huge fee for the work involved. It's more than half of your money!

Hopelessly_Hopeful

ianmak wrote: »

Hi all, need a bit of hand holding, and advice of where to go next.

my DMP company have been going through the motions of setting up a 'Full and Final IVA' to settle my debts. I have 9k to offer, on approx 16-18k of debt. After fees they will offer £4450 to creditors! Is this right and normal? They keep saying it's better than me settling on my own, but can't help thinking what a waste of money! Surely my creditors soon me offer money without an IVA?

I had to read this many many times. Are they seriously asking for £4550 for the admin. Please ask them if they have any vacancies. Come on Ian, YOU can do this without doubt. Plenty of threads and support around.

HHx

Puzzcat

Sadly excited.... have done the talk with oh who is not in debt and explained what I am planning on doing and he is okay with it..which was essential to the plan!
So ...next steps. Hope to receive new bank account details soon, tomorrow I'm going to fix our mortgage for 5 years and oh is going to pay off the od on the joint account so I can close it.... so after my holiday (paid in cash not cc) I shall start the ball gently rolling....
I have been in debt for 20+ years and no longer feel that I owe my creditors any more interest......
I am a woman on a mission.....and hope to finally get my life back....
Thank you in advance as I'm sure I will have many questions on the way...but I have to say I can't wait to start!!!

Time_to_face_the_music

sharpeyes66 wrote: »

How does the pro-rata rule apply when deciding payments on a dmp? I am having trouble getting 2 of my creditors to consider reducing or freezing interest as they both say i am paying too much. Natwest have written back saying that the payment prorata should be £65 & so they cannot treat me as in financial difficulty as sc have offered £101 pm. Halifax have suggested as:question:king sc to amend the payments down as their offer is over the minimum monthly figure and so are carrying on with the account as normal and charging 18.95% interest. Natwest do seem to have a points when i have checked the payments they would be paid off much sooner than the others if interest etc was frozen on all accounts, 36 months as opposed to 58ish for all the others. Can i ask stop change to pay each creditor the same percentage of my payment to them as their debt is percentage wise. Feel like is being treated at a disadvantage for paying too much. Always thought it would be the opposite but both these 2 have said i would be more likely to have a chance of preferential interest rates etc if i was paying less. Very confused

It is very confusing but is due to the fact that StepChange do not calculate pro-forma payments in the same way as any other DMP provider. This stitched us up too and was the deciding factor in us going self managed.

Other DMP providers add up the total amount of debt, calculate your available payment and work it out as a proportion or ratio. For example, you owe £1000 to creditor A, £2000 to creditor B and £2500 to creditor C = total debt £5500. You can afford to pay £250 per month so creditor A gets £45.45, creditor B gets £90.91 and creditor C gets £113.64 = total payment £250

StepChange calculates your monthly payment in proportion to your previous minimum payment to your debt. If it's an OD, they have some way of calculating this but have never been able to explain it to my satisfaction. When we started our DMP, one M&S account payment calculated by StepChange was above the previous minimum payment and hence M&S would never stop interest. M&S wrote and told us if we lowered the payment they would stop interest, we sent this to StepChange and they said they could not do it. We took the case to the FOS and lost as M&S had offered us a solution and we did not/could not accept it.

Yes you are at a disadvantage for paying too much but unfortunately there is no way out of it, if your DMP remains with StepChange, because they will not allow you to change the payments to creditors. Our solution was to go self managed via the NED CAB DMP but if you do not feel confident enough to do this, you could consider moving to Payplan.

If I had our time over again, we would have self managed our DMP from day 1 but I still am grateful to StepChange for helping us when I did not even know a DMP existed and thought there was no solution to our debt. I am even more grateful to this thread and its predecessors as with the help and support of this forum thread, we have managed to pay off almost 40% of our massive debt in 18 months. If you do decide to change your options, you will get the same support here with or without StepChange behind you. Just ask if you have any more questions.

Time_to_face_the_music

ianmak wrote: »

Hi all, need a bit of hand holding, and advice of where to go next.

my DMP company have been going through the motions of setting up a 'Full and Final IVA' to settle my debts. I have 9k to offer, on approx 16-18k of debt. After fees they will offer £4450 to creditors! Is this right and normal? They keep saying it's better than me settling on my own, but can't help thinking what a waste of money! Surely my creditors soon me offer money without an IVA?

No way Jose!

National Debtline have all the information you need to do full and finals yourself. No idea where an IVA comes into it and you are paying over £4.5K for nothing.

I assume this is Payplan?

Hopelessly_Hopeful

Time_to_face_the_music wrote: »

It is very confusing but is due to the fact that StepChange do not calculate pro-forma payments in the same way as any other DMP provider. This stitched us up too and was the deciding factor in us going self managed.

Other DMP providers add up the total amount of debt, calculate your available payment and work it out as a proportion or ratio. For example, you owe £1000 to creditor A, £2000 to creditor B and £2500 to creditor C = total debt £5500. You can afford to pay £250 per month so creditor A gets £45.45, creditor B gets £90.91 and creditor C gets £113.64 = total payment £250

StepChange calculates your monthly payment in proportion to your previous minimum payment to your debt. If it's an OD, they have some way of calculating this but have never been able to explain it to my satisfaction. When we started our DMP, one M&S account payment calculated by StepChange was above the previous minimum payment and hence M&S would never stop interest. M&S wrote and told us if we lowered the payment they would stop interest, we sent this to StepChange and they said they could not do it. We took the case to the FOS and lost as M&S had offered us a solution and we did not/could not accept it.

Yes you are at a disadvantage for paying too much but unfortunately there is no way out of it, if your DMP remains with StepChange, because they will not allow you to change the payments to creditors. Our solution was to go self managed via the NED CAB DMP but if you do not feel confident enough to do this, you could consider moving to Payplan.

If I had our time over again, we would have self managed our DMP from day 1 but I still am grateful to StepChange for helping us when I did not even know a DMP existed and thought there was no solution to our debt. I am even more grateful to this thread and its predecessors as with the help and support of this forum thread, we have managed to pay off almost 40% of our massive debt in 18 months. If you do decide to change your options, you will get the same support here with or without StepChange behind you. Just ask if you have any more questions.

As ever, really well put Twin

HHx

Time_to_face_the_music

Hi and welcome to Puzzcat and shrekkiegirl and welcome back to maybedmp and hello to anyone else new that I have missed :hello:

This thread was a real lifesaver to me when I first came to MSE. The help, advice, experience and support from people in exactly the same situation to you is invaluable.

Every now and then I like to look up an old post that I have saved and offer it to everyone as some of the best advice I have ever read on these forums:

1. You're not alone

2. There's nothing you can tell CAB/StepChange (CCCS)/Payplan that they haven't seen before

3. There's more to life than money, you need to get a handle on this to stop it happening again, but don't let debt ruin your life. Understand why you got into debt, and plan a way out of it, and feel proud that you are facing it head on.

Thanks as always to "thatsean" for the original message, it really says it all. With that in mind and the help, advice, experience and support offered on this thread, you will be in a great position.

TTFTM x

Find_The_Real

ianmak wrote: »

Hi all, need a bit of hand holding, and advice of where to go next.

my DMP company have been going through the motions of setting up a 'Full and Final IVA' to settle my debts. I have 9k to offer, on approx 16-18k of debt. After fees they will offer £4450 to creditors! Is this right and normal? They keep saying it's better than me settling on my own, but can't help thinking what a waste of money! Surely my creditors soon me offer money without an IVA?

Hello Ianmak, I am also going through a full and final IVA at the moment and those figures seem a lot more than mine. My provisional figures are showing the IP fees are coming out at about £3600 on a much larger debt. You could have a chat with couple of other IVA's, I can PM you a couple that are worth speaking to about this if you like and the initial advice is free.

Unfortunately any form of formal insolvency is going to be expensive in terms of IP or OR fees (my bankruptcy OR figures are showing over £6K) and as your debts are not too high I would consider maybe going for a full and final offer direct yourself, pointing out that if you were to go down the IVA route they would get over £4000 less due to the fees.

ianmak

Thanks. Think that's sealed it. The irony is that it's the astronomical fees theyre charging that's put me off!

Find_The_Real

National debtline have sample letters for full and finals, it may be worth just looking at those as they normally are very good (Section 5 - may need to just tweak the mortgage F&F one)

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6