DMP and increase in income

beckstar1975

Hello

Hopefully in October when littlest goes to school we will have enough income to meet the minimum payments owed on our debts. So - does this mean that our DMP wills top and we'll go back to paying our creditors directly, (although we can only afford min payments not the arrears), or does it mean that we will just chuck lots more money at the DMP and thus finish it quicker?

Most accounts have suspended interest, other than Halifax (surprise surprise)

Thanks

Rebecca

climbingoutoftheabyss

You can increase the payments and continue on your DMP. Obviously the more your monthly repayment the faster you will clear the debt.

Are you with a DMP company, keep pushing Halifax to stop the interest, Halifax is one of my creditors and they stopped interest on my account, so it can be done.

simeyb

Hello - a number of things could happen I guess.

1 Where the creditor has sold the debt and you are paying a debt collection agency through your DMP, this cannot go back to the creditor, so this one would expect perhaps a higher monthly payment to clear the arrears more quickly.

2 If you have "arrangements to pay" with some creditors (some may have just suspended or reduced interest, but kept hold of the debt), then you could come off the AP, but they would then charge you a normal rate of interest and any extra you could pay would be swallowed up by that.

There has been much debate on here with what to do with extra money and its 50/50 hold onto it/give it to the creditors - remember that your overall cost of living has just gone up and up but your payments to the DMP haven't reflected that - i.e. all the extra costs have come out of what you have always been left with.

I have my own views on this!

eyeopener2

I would hang fore on increasing your DMP payment initially,saving it for the inevitable inevitable rainy day. Once you have a little money set aside then contact stepchange/payplan or whoever to increase your payment.

Also remember that some lowlife creditors will reinstate interest when your payments increase so there are a few factors to consider.

In the meantime, save some emergency money.

morgan78_2

simple keep it and save it for a rainy day etc