Am I doing the right thing?

LowEbb

I have been throwing the part time wages straight at the credit card to reduce the balance. I've made both StepChange and PayPlan aware of this and they're both recommending a plan - be it an IVA (PayPlan) or a DMP (StepChange)

As I mentioned earlier, come February my circumstances may well change quite considerably meaning I have a fair amount more disposable cash available to me which I would obviously throw straight at my debts.

Which is probably why i'm swaying towards the DMP more than the IVA as it gives me greater scope to overpay when my circumstances allow.

Anondebtadvisor

I would continue with a DMP and save any money you can when your circumstances do change and offer your creditors final settlement offers one by one to gradually clear them one at a time.

Good luck :-)

LowEbb

The_Hurricane wrote: »

Do you rent and entire house or just a room?
Currently 'flatshare' with a colleague. Though I have rented properties in the past with an ex-girlfriend.
What did you use the loans for?
Being perfectly honest, I'll have to say over-indulgence in a lifestyle I could ill afford. That and an ex-girlfriend who did very well out of me and left me in the lurch somewhat.
That said, I'll spare you the sob story - the primary catalyst was me and my desire to enjoy my youth more than I could afford. Sadly, working in the banking industry opened my eyes to how easy 'cash' was to get hold of. Backfiring now obviously.
Apologies for all the questions, but hopefully there is something we can fix.

No problem, I appreciate all of your help and am taking all of your pointers on board.

headstuckinsand

How long is the term remaining on your loan? If it's only a few years would you be able to tough it out until the loan is paid off? Especially if your circumstance may well change for the better in the near future.

When this is done you can set to paying additional money into your credit cards.

Is there any chance of borrowing a small amount of money from relatives/friends to clear your credit card arrears to get them off your back? Then contact the credit cards and get them to close the accounts, thereby meaning your account balance will not increase as you can't spend anything else on them.

UpToMyNeckInIt

Another thing to consider in your decision making is the adverse affect on your credit rating: In an IVA, your rating is restored 6 years after the start of the plan.

With a DMP, your rating is not restored until 6 years after the plan ends. So if your plan lasts 7 years, you will have to wait 13 years in total for a half -decent rating.

Experts: Please correct me if I'm wrong.

Maybe the low value IVA is worthy of consideration after all? (I accept that you have to consider employment stuff etc. as well).

Best option as suggested is to grit your teeth and slug it out if you can.

Find_The_Real

I may be wrong but I think the rating after a DMP still being there for another 6 years is only in the case where an AP marker has been recorded rather than a default. After 6 months then they should issue a default notice if full contractual payments have not resumed and it is possible to make a complaint if this does not happen.

This is where being on top of your credit file/letters and making sure you complain if you are not being treated fairly under ICO guidelines is essential, even if a DMP is being managed on your behalf.

UpToMyNeckInIt

...I got the information from a number of sources, but the credit agencies explain in more detail.

Experian quote the following:

'DMPs and Arrangements aren’t currently registered on credit reports as standalone entries, but the lenders that share customer repayment details through Experian can highlight any special arrangements or circumstances like these on the entries they register with us using what we call ‘flags’. We certainly encourage lenders to add any applicable flags to the data they send us to make sure that people’s credit reports paint the most accurate and comprehensive picture of their current financial circumstances. When you take out any credit, you usually give your permission for the lender to share details about how you manage the account. Entering into a DMP or an Arrangement is certainly very relevant to this. Importantly, if you stick the whatever agreement you’ve reached with your bank any damage to your creditworthiness should be minimal. Once the Arrangement or DMP ends, the flags will disappear within six years, whether you keep the accounts open or you close them.'

Thus, while a debt management plan itself isn't recorded on your credit report, reduced repayments are, and this will affect your credit score.

fermi

https://forums.moneysavingexpert.com/discussion/4757020