Advice needed - Debt Management issue

JD1988

Hi Forum,

I require some advice on a Debt Management issue.

I recently set up a plan with Harrington Brooks due to my current financial difficulty. I'm not entirely happy with the service that I have been provided.

I currently have a £2500 overdraft with Lloyds TSB and £1000 limit with a Vanquis Credit Card.

I have set up a plan to pay £150 per month and they will freeze any interest that I have been paying on my card and overdraft. I wasn't made aware that this would seriously dent my credit profile. It may be my neglegence not finding out more about this but I felt the way it was explained to me it was a no brainer option.

I have now made 2 payments of £150 to the creditors however Vanquid and Lloyds are still taking payments. I was not made aware that I need to cancel any direct debits. This has now left me with £40 in my account until 15th April.

Anyway, if I was able to raise the funds of paying off the £3500 owed (parents, selling my car or what have you) and I paid off Lloyds and Vanquis, what legal obligation do I have to continue with the Debt Management Plan that has been set up?

In hindsite I wish I didn't take out the Debt Management Plan as I really don't want my credit rating being affected.

Is there any way out of this without my profile being affected?

Thanks in advance.

JD1988

Peter,

Thank you for your advice. I understand that under compliance it is a neccessity to mention the issue revolving the affect on credit ratings, however when being explained the T&C's over the phone they are very rushed and don't allow you time to think about the situation.

Nonetheless, I am currently trying to raise the funds to pay off the debts as I really don't wish to dent my rating. I will check if the scores have been affected.

Regards,

JD1988

2kadmin

Hi,

Sorry to read your post, please follow up your post as to the results with Harrington Brooks.

As for practical advice, personally I would ask Vanquis and Lloyds for a full and final settlement figure (this may be less than you actually owe). You may be able to barter with them to get them to amend your credit file. CAB should be able to help with this without charging any fees or post on here again if you need further help.

As a new user I cannot post links however if you Google 'full and final settlement letter', the top result is a PDF from the national debtline.

As for your credit file do you know exactly what you have registered against you? Late payments? Defaults? You really need to get a credit report to find this out.

Hope this Helps.

JD1988

Hi,

Thanks for your reply.

At the moment I don't have any defualts logged against my credit file, I have checked Noddle, Experian and Equifax. My profile deems fair on some and poor on the others and I'm not sure as to why.

I will search for the settlement letter thank you.

The question I'd like clarity on would be, if I was able to come up with the funds of the owed amounts and I paid them directly to my creditors, what happens with the DMP that I have in place with Harrington Brooks? Am I legally obliged to pay the money via them or can I pay direct to the creditors? Also, If I manage to pay the creditors myself, will this still affect my credit rating having had a DMP in place?

Thanks

National_Debtline

Hello JD 1988.

As Peterkelly has mentioned a Debt Management Plan is an informal arrangement which you can cancel at any time. You could look to cancel and either self-negotiate with your creditors or consider using an alternative Debt Management Plan provider - We would recommend using a free provider such as Payplan or Stepchange.

The OFT has published guidance on how it expects debt management companies to act, you can download it here: http://www.oft.gov.uk/shared_oft/consultations/OFT1338con.pdf

As far as Full & Final settlements are concerned, here's a link to our fact sheet:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Bets wishes,

David.