DMP self management or not?

zenshi

What are the pros and cons of self management as opposed to not? I am just starting to get myself together and will be ringing NAtional Debtline later to get the ball rolling

olivia84

hi there,

we managed our DMP ourselves and it was totally fine. here are the pros and cons of self management that i can think of:

pros of self management:

you are in control of what you offer to creditors

you control when you make your payments

some companies/charities take your payment from you on a particular date, but this can get held up in the system for ages before it gets to your creditor - going it alone, your creditor should get your payment within 3 days of you making it

a 3rd party isn't involved (less messy)

creditors may prefer to deal with you direct

obviously no paying of fees is involved (if you were to choose a fee-paying company, which hopefully you wouldn't)

some DMP management charities may be quite strict about how much they believe you need for day to day living - you can decide this (or at least put this to the creditors)


cons of self management:

can be very confusing - lots of payment details to sort out for various creditors - wheras a DMP company/charity will take just one payment from you then distribute it to your creditors

you have to physically make the payments yourself. i set all mine up online and made faster payments to them on payday, but it can still get confusing, trying to keep track of who you've paid that month and who you have not

with a comapny/charity, they will deal with correspondence/phone calls for you.

most creditors like to review your circumstances every 6 months or so. you have to go through an income/expenditure with them and with a 3rd party you only have to do it once every few months with them, but going alone, you'll have to contact each and every creditor yourself when it's due


HTH xx

zenshi

Thanks. I am speaking with a free company now. I'm finding rather daunting at the moment, so am thinking not to do it myself. Several months down the line, if I was more comfortable with it, could I swap to self management?

olivia84

yes, i'm sure you could swap over. we were with a fee paying comapny in the early days (silly, i know) and we just basically stopped the direct debit to them and contacted the creditors ourselves. most companies stopped interest fairly soon, but RBS (who were our largest creditor) took a couple of years to stop interest. they actually took court action against us and i personally don't think that being with a charity/company has any more clout when it comes to this than you do yourself, although others might have a different opinion on this.

also, a creditor can still take you to court at any time during the DMP whether you are paying them or not (although for smaller amounts this is unlikely) we owed RBS £24,000 when they took court action against us. don't mean to scare you (cos, really it's not scary) but just to let you know this is a possibility.

the main thing is you are taking steps to sort your debt out and you will get there in the end.

good luck xx

zenshi

This is so hard to get started!!! I'm sure once the balls rolling ill be fine but aargh

National_Debtline

Hello Zenshi,

Did you call us in the end? If so we should have sent you a copy of our self-help guide 'Dealing with your debts'. If not you can download a copy here:

http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#4

If you're confused as to what the best option might be you can seek tailored advice online via our My Money Steps system:

http://www.mymoneysteps.org

Olivia84 has very deftly outlined the key pros and cons of self-management, we've found that many of our clients have been more than able to get fair and reasonable payment arrangements sorted with their creditors. It may take a few attempts in writing to the creditors, do ensure that you stick to your guns!

We often refer some of our clients on to free debt management plans. These can alleviate the worry and stress of self-management and allow you to make one monthly payment and have the knowledge that the debts are sorted for that month. DMPs are not as 'hands on' as self-management but there's far less time needed from you if you choose this option.

Ultimately there isn't really a right or wrong option. What's important is that you seek free, impartial advice to made aware of all of the potential options open to you; that way you can choose the most effective route forward for yourself. This forum is an absolute melting pot of superb advice also!

Best wishes,

David @ NDL.

zenshi

I did call David, and spoke to a guy. Still a bit confused. I have looked at template letters and will send some to credit card companies. It may be easier to get someone else to deal with them as its making me feel ill but I'll try myself first. Maybe once letters are sent, I'll feel better?!

National_Debtline

Have you had our information through yet? Hopefully that'll be helpful! I'll keep an eye on this thread, too, if you have any questions post them up and I'll try my best to answer them!

Getting started can often be a bit of a daunting experience but you're in the right place to get all the help and support you'll need. This forum is full of very supportive knowledgeable people! You can also give us at NDL a call whenever you need

David.

PS - Why don't you give My Money Steps a whirl? I would be really keen to learn your thoughts about it!

zenshi

Money steps won't work for me as I'm self employed

Issuma

Hi zenshi
I self manage my own DMP and I have to be honest the first couple of months can be a little rocky until everything settles down but I can honestly say I've had no problems with any of my creditors and all except one have frozen the interest, last year I managed to pay of over £10k off my debts, I have regular reviews and everythings going fine, I agree with all the points made by Olivia84, a lot of the time it's about being organised (make sure you do everything in writing) keeping your nerve and learning how to deal with your creditors............Good Luck in whatever you decide to do.

zenshi

Too the the dog for a walk and got fresh air blasted through my brain, so feel a little clearer now. Few questions though if I may...

Letters....should I start with the '28days while I get a plan' or straight off with ' I'm struggling, would you accept this token amount' Obviously using the template letters

How likely is it that they will freeze the interest, just from my letter? That in itself would be a huge weight off my mind