DMP & Mutual Support Thread - Part 9

Time_to_face_the_music

larnier wrote: »

I have just posted about our difficult experience with DMP. Then saw this thread which has been quite eye opening - I wish I had seen it before as it would have prepared me for a lot of what has happened as our DMC was so optimistic at the outset and did not prepare us for the approach the banks have taken. Anyway, I see that a lot of you have had success writing to / talking to creditors. Our DMC have told me NOT to do this under any circumstances and if I do this I will make things worse as they are the experts. I have had similar experiences of letters saying completely different things to what the DMC say. Lots of threats of legal action and very little in the way of reducing interest - the "concessions" that we are getting are in the main giving us time to pay off arrears which only accrued due to the 2 month lag between us starting to pay the DMC and the DMC paying the creditors - we still get penalties for not paying the minimum amount - even though we are paying more than the old minimum amount (before DMP) they add the arrears to the new min amount therefore the now bigger payment is not enough! The money for these arrears is there - its sitting in the DMC's account in what they call the creditors pot, but they can't pay the arrears off as this is not what the DMP is about. Do you think we should try talking to the banks as so far we have refused to do so as we were advised ?

Hi and welcome Larnier :hello:

Have just read your other post and was about to respond but then spotted this. Is your DMP with Stepchange?

Do not despair we can hopefully help you sort this.

TTFTM x

larnier

No but it's another charity. I am so paranoid I don't want to say who as I am afraid someone from there will see me on here - they have made me feel like all I do is complain and say I should trust them.:sad: I am finding it hard to trust them as I am worried it was the initial mistakes in the budgets they made that have got us in this mess.

Time_to_face_the_music

larnier wrote: »

No but it's another charity. I am so paranoid I don't want to say who as I am afraid someone from there will see me on here - they have made me feel like all I do is complain and say I should trust them.:sad: I am finding it hard to trust them as I am worried it was the initial mistakes in the budgets they made that have got us in this mess.

OK the only other charity that deals with DMPs is Christians Against Poverty (CAP), if you are with Payplan, they are most definitely NOT a charity! If it's anyone else, please ensure immediately that the service is actually free, DMP companies have been known to lie and then pile on the charges.

Number 1 piece of advice, only trust yourself with your own money and your debts. Even if you are paying someone else to distribute your payments, it is 100% up to you to keep control of this.

The fact you have been told not to contact your creditors is very worrying. My immediate advice is that you should write to each creditor and ask them to stop interest/fees/charges and refund any already paid.

If you need a template letter for this, please let me know and I will cut and paste one.

larnier

Thank you Time to Face the Music for your advice.They have advised very strongly against contacting creditors but my gut reaction has always been this is our responsibility and I have been very uneasy about this but just having this view has caused tension with the DMC. I would like a letter template please. It is so encouraging to see your signature figures - were you ever in a position where you were paying more than min amounts and they wrote off interest ?

Time_to_face_the_music

larnier wrote: »

Thank you Time to Face the Music for your advice.They have advised very strongly against contacting creditors but my gut reaction has always been this is our responsibility and I have been very uneasy about this but just having this view has caused tension with the DMC. I would like a letter template please. It is so encouraging to see your signature figures - were you ever in a position where you were paying more than min amounts and they wrote off interest ?

I started off our DMP with Stepchange (then CCCS) but like your situation, they were paying creditors more than the minimum payment and they refused to stop interest. M&S even wrote to me saying we were paying too much and if it was reduced they would stop interest, Stepchange refused to do this. We took the case to the FOS but because M&S had offered us a solution, the FOS could not act on it. In the end we dropped Stepchange, started to self manage our DM. and have never looked back. If you are interested in this route, please check out the CAB's online self managed DMP, I really can't recommend it highly enough, it's fantastic!


https://nedcab.cabmoney.org.uk/dmp.asp


Ok on to a template letter, try something like this and adapt it for each creditor:

You

Date

Them

Dear Sir/Madam

Re: [Creditor name] account No: XXXXXXXXXXXXXXX

Thank you for your letter/statement concerning the above account. I am sorry that you feel unable to suspend interest/charges on the above account.

As you are aware, I/we am/are in a DMP with XXXXXXXX, reference number XXXXXXXX. The majority of my/our other creditors have agreed to the offer of payment and agreed to suspend any interest charges still accruing. They have accepted that to continue to charge interest would not assist us in my/our present financial difficulties, and can only serve to increase my/our total debt.

I/we have already paid considerable sums in interest to my/our account. If interest charges continue, the monthly instalments I/we am/are paying will not even cover that interest. Also, the cooperation of my/our other creditors who have agreed to freeze interest already would be put at risk.

I am aware that XXXXXXX subscribes to the Lending Code which states that lenders will consider reducing or suspending interest and charges if these would cause the debt to increase or lead to the repayment term becoming too extended. I would therefore be grateful if you would reconsider your decision not to freeze the interest. This would mean that the monthly payments I/we make would actually reduce the balance outstanding to your company.

Please consider this letter as a complaint about the interest charges and fees you are continuing to apply to my account. I would like to see these stopped immediately and previous interest charges refunded.

If you are unable to help me with this issue, I will have no alternative but to take this case to the Financial Ombudsman Service.

I look forward to hearing from you as soon as possible.

Yours faithfully

You

longtermplanner

larnier wrote: »

.They have advised very strongly against contacting creditors but my gut reaction has always been this is our responsibility and I have been very uneasy about this but just having this view has caused tension with the DMC. I would like a letter template please.

I suggest that you need to take over responsibility for your DMP, Being in control will mean that you have to write / cope with letters, but you are clearly competent and will be able to manage. And I think you would find it easier than going through whichever this charity is.

(Incidentally I wish you would name them. So what if they read this? They need to know that they are not looking after one of their clients at all well. And it might help other people reading this who are thinking of a DMP through them.)

Have a look at this site, set up by a CAB branch but which can now be used by anyone, not just their own clients. They have an 'online self administered DMP' system which sounds as though it would be good for you: https://nedcab.cabmoney.org.uk/dmp.asp

Your other option is to revisit the IVA idea. It would be very unusual for an IVA to affect your OH's work. Is there someone he could talk to in confidence about this? Some professional body? As a rule of thumb I tend to say that somewhere between 20k and 40k people should opt for a formal debt solution rather than a DMP. Where on that scale depends on how much you earn. It sounds as though you are at the top end, but 60k is (IMO) too much debt to handle in a long term DMP.

Time_to_face_the_music

longtermplanner wrote: »

I suggest that you need to take over responsibility for your DMP, Being in control will mean that you have to write / cope with letters, but you are clearly competent and will be able to manage. And I think you would find it easier than going through whichever this charity is.

(Incidentally I wish you would name them. So what if they read this? They need to know that they are not looking after one of their clients at all well. And it might help other people reading this who are thinking of a DMP through them.)

Have a look at this site, set up by a CAB branch but which can now be used by anyone, not just their own clients. They have an 'online self administered DMP' system which sounds as though it would be good for you: https://nedcab.cabmoney.org.uk/dmp.asp

Your other option is to revisit the IVA idea. It would be very unusual for an IVA to affect your OH's work. Is there someone he could talk to in confidence about this? Some professional body? As a rule of thumb I tend to say that somewhere between 20k and 40k people should opt for a formal debt solution rather than a DMP. Where on that scale depends on how much you earn. It sounds as though you are at the top end, but 60k is (IMO) too much debt to handle in a long term DMP.

Surely it's the length of the DMP that should be the cut off point rather than the sum of money owed? We took on a DMP owing over £82,000 but have paid off over £56,500 in 26 months. The original prediction was a 4 year DMP but we hope to cut this.

100% agree about the self managed DMP and I recommended the NED CAB in my previous post. I have used this for about 18 months now and it's excellent.

dini_2

I have over the past 7 years, paid off £50k of debt.
No good reason for it. Nothing to show for it. Just ostrich mentality, store cards, and credit cards.
I still have another 19k to go according to my statements.
Am on a DMP with payplan, (they have my balance at 15k.)
According to them I have 2 years to go.
I am now paying off 700 per month. It has been really hard work, all those payrises have gone nowhere. I am still angry at myself for frittering so much away.
Sometimes I think I have done really well, other times I think another 2-3 years of this is impossible. I live in rented accommodation, and will never own my own home. I am 47 this year, have no savings, and no chance of ever getting to the point of getting a mortgage so my home will always be at the whim of a landlord and whether or not they want to sell.
My credit rating is shot to hell. Some of my debts defaulted at the beginning so have dropped off my credit report, but 2 are still there, wont be off til 2017, and 2 more kindly did not actually default and are still sitting there saying DM. So I will have another 6 years of them blinking on my credit report from when they are paid off.
Its just depressing.
Eventually I wont have debt, and I cant wait for that date, but in the meanwhile is is hard work.

Earthmother_2

Hi all,
I've not posted for a while, things were trundling along nicely and we have paid off over £8k off our debts, but this week DH's work dropped a bombshell. They are making his post redundant and his having to reapply for the new positions they are making. So, he won't get any redundancy, just a new contract and big pay drop. We don't know an exact figure yet but they have said it may be a £5K drop.

We worked it out that we will be about £300 - to £400 worse off a month. We pay Stepchange £370. So we will have enough to live on but no money to pay our debts off, so what will happen?

Obviously I am looking for part time work to make up the deficit and fingers crossed I get a job, but what if I can't get one soon? We be able to make token payments of about £50 I think, but the creditors aren't going to like that drop are they?

We still owe Lloyds just over £15,000 for a loan and Moorcrooft (Lloyds credit card) £10,700.

I haven't phoned stepchange yet as we don't know how much the drop is definitely going to be. Our debt free date was march 2020, but at the moment there is no end in sight, will we get chucked off our DMP if I don't find work soon?

larnier

Just wanted to thank those who have responded to my messages today. Having discovered this group for the first time in years I don't feel alone. I have a much better idea of what to expect from this process and that there is somewhere I can go to get tips and offload which I thought the DMC might have provided but hasn't. Thank you - suspect I will be spending a bit of time here!