Isit possible to setup your own debt management plan?

WarmPeas

Hey everyone,

I have some outstanding debt with various creditors (about 5k) and I have recently spoken to a debt management company. They have offered me a plan where I would be paying £110 a month towards my creditors for a period of 6 years. Reading the small print I noticed they will be taking £35 of this as their own fees and the first two months I pay will be taken by the company themselves as other fees. It works out in total I would be paying an extra 2.7k on top of the debt I currently owe.

Would it be possible to contact my creditors myself and see if they would be willing to freeze the accounts/stop interest then pay them back the money myself so in the long run I wouldn't have to shell out the 2.7k in fees or do the debt management companies have some sort of legal arrangement that only they are able to pay back the creditors and get the interest frozen/charges stopped?

Cheers in advance!

michael1983l

YEs you can manage your own DMP, but some lenders are not as forthcoming with you. You could just use a free DMP provider though.

WarmPeas

Thanks for the quick reply! Can you recommend any good free DMP providers?

michael1983l

http://www.stepchange.org/

fermi

NE Derbyshire CAB also have a free self managed DMP service that anyone can use:

http://mymoney.nedcab.org.uk/moneyadvice/dmp.asp

Won awards last year.

sourcrates

WarmPeas wrote: »

Hey everyone,

I have some outstanding debt with various creditors (about 5k) and I have recently spoken to a debt management company. They have offered me a plan where I would be paying £110 a month towards my creditors for a period of 6 years. Reading the small print I noticed they will be taking £35 of this as their own fees and the first two months I pay will be taken by the company themselves as other fees. It works out in total I would be paying an extra 2.7k on top of the debt I currently owe.

Would it be possible to contact my creditors myself and see if they would be willing to freeze the accounts/stop interest then pay them back the money myself so in the long run I wouldn't have to shell out the 2.7k in fees or do the debt management companies have some sort of legal arrangement that only they are able to pay back the creditors and get the interest frozen/charges stopped?

Cheers in advance!

Stepchange is a good place to start, you can do it yourself very easily, don't EVER pay a company to do this for you, you can do it yourself for free is you use email, cost of stamps by post, just take a little time and effort but id do it to save 2.7k !!:)

WarmPeas

Thanks for all the replies and advice guys! Will take a look at the free ones