DMP - What if the monthly payments are too low

debtdawg

National_Debtline wrote: »

Hello there,

Did Stepchange outline all potential options to you - such as Individual Voluntary Arrangements and Bankruptcy? Whilst a 14 year DMP isn't uncommon it's certainly longer than most. Also, it's important to bear in mind that the freezing of interest and charges isn't guaranteed under a DMP - though many creditors generally do agree. If your circumstances improve over time it may be possible to reduce the time you're under the DMP - in addition, if you start with the DMP and decide one of the more formal routes could be a better option, there is nothing to stop you switching at a later stage.

Best wishes,

David @ NDL.

I agree with the part about not all creditors freezing interest. Stepchange calculate my DFD as 2021 based on all creditors not charging interest, however two of my creditors still are charging interest and out of the £310 a month I am paying towards a £27k DMP, roughly £57 goes towards the interest those creditors are still charging, which means my DFD will not be late 2021. I have also heard that as you get towards the end of the DMP and pay off the smaller creditors and your payments go up, that some creditors who reduced or froze interest, will not see you as being in financial difficulty and therefore start putting interest back on, again adding more time.
I'm aiming to be DF in 5 years despite this as hopefully we will be able to increase payments or offer full and final settlements to some of our smaller creditors a bit further down the line.

Coinmachine

Thanks Puzzcat and Monkeyballs - sounds like a double act!?

I will post on the support thread I knew it would be stressful to set up but I feel better just knowing that so many nice people took the time to reply with some sound advice, i feel clearer now but accept there may be more stresses to come but I am doing the right thing.

Monkeyballs

Coinmachine wrote: »

Thanks Puzzcat and Monkeyballs - sounds like a double act!?

I will post on the support thread I knew it would be stressful to set up but I feel better just knowing that so many nice people took the time to reply with some sound advice, i feel clearer now but accept there may be more stresses to come but I am doing the right thing.

LOL,

I like that - now you say it, we could be a crime fighting cat and monkey combo! Puzzcat could be a feline Sherlock Holmes and I'd be the muscle like Kato from Batfink!

If it helps, I've been on my plan for about 8 months now and I've pretty much been stress free (financially) for about 6 months so it's easier than you'd expect... So long as you've been realistic with your budget

MB

markwoods10

Hi I have just read this with inerest and has taken me a long while to realise im in the same hole, but not alone!
this week i contacted stepchange and applied to acivate aDMP
£250 pm debts clear in 4 yrs..
i have alreay set up a new bank account and arranged for my salary to pay into it on 25th.. cancelled all my CPAs and non essential payments with old bank as some of the above will go towads the overdraft. and arranged for my essentials rent/ct elect etc to pay from new account

i am still a little apprehensive at what happens next , stepchange assured that all should be ok, and talked me thru what should happen
have 14k over a few crediors i guess i am worried that somone will turn up on doorstep and empty the house!
i am dissapointed at myself as i am not normally bad with money but over the last year or two probably didnt really analise funds
do i contact creditors or just let stepchange take over?
any advice greatly appreciated

and good luck to all here

dancingfairy

Some creditors may not like it at first, they may stamp their feet and send letters full of hot air, but frankly at the end of the day they will not turn down money and they will have to accept what you have. They can waste their money and time taking you to court but if then a judge will probably order you to continue paying at the same rate (judges aren't stupid they know if you haven't got any money you haven't got any money) and may send the creditor away with a flea in their ear.
You can always save up and make full and final settlement offers to creditors after a few years.
In relation to whether they stop interest and charges, make sure you and stepchange are pushing them to do this. If they refuse then I'd put in a complaint to them and then escalate it to the ombudsman if necessary.
Mark - you can always send your creditors a letter saying you are seeking advice from Stepchange and will be in touch shortly. You can enclose a token payment of goodwill as well - this can be 1 pound or 5 pounds. Apart from that I'd probably put any money aside for emergencies whilst you wait for the plan to get set up.
Best of Luck to everyone.
df

Monkeyballs

Hi,

If it helps anyone - this is my experience (summarised) which might be of benefit as I've been on my plan for less than a year

I contacted SC and we went through income & expenses and agreed that £500 pcm is available to repay my debts (at the time totalling @ £19.5k) over 3.5 years.

Once the plan was set up and I had my ref. I signed into my DMP through the SC website to make sure everything was present and correct and to read more of the information on their site.

I contacted* each creditor to advise them that I was entering into a DMP with SC, gave them my DMP ref and a contact number for SC confirming that they will be in touch with a budget sheet, list of debts and an offer.

*Contacting creditors was a mix of email, letter and phone call as at this point I did not feel the need to keep copies of my notification to them although I did list creditor and dates as well as names and times if I had called - the exception being payday lenders who I wrote to by registered 1st class mail also asking to cancel CPA and provide written confirmation of receipt and agreement of DMP.

I keep and file all notes and replies in separate envelopes - one per creditor.

Several creditors sent me a letter of default - I had been told to expect these by SC but I still emailed them details for my own peace of mind and filed them.

A couple of debts were passed to debt collection** agencies, I called the DCA and gave them the DMP information and then called and emailed SC the details so they have the most up to date information on their file and I double checked a week later on my DMP to make sure that the info had been corrected (unless SC emailed before then to confirm the changes made).

** Read what you are sent, it may sound scary but they are fine once you give them the DMP information and will freeze your account for 30 days while waiting for SC to contact them - debt collection agencies are not bailiffs!

On the agreed date my first payment left my bank account - I checked my statement online, again for my own peace of mind.

After about 3 weeks (which was in line with what SC told me) I received an email from SC telling me that my statement was available to view - I looked and could see clearly each creditor listed and the payment sent with an estimate of outstanding balance.

All of this happened over the space of maybe 5-6 weeks roughly.

During the following month I got another couple of letters of default which I passed to SC and filed.

The second payment left my account - I checked my statement online to be sure but all was well I felt really good by this point as I had been virtually hassle free with the exception of the default letters and my confidence was increasing as I felt more in control

The third month - no issues everything went to plan as did the following couple of months

Around month 6 I had a lapse with my gambling and panicked which made things worse before I contacted SC who agreed to a lower payment and contacted creditors with the reduced payment and confirmation that it was a "one off" and normal payments would resume the following months - I also called my creditors to advise them of the same and to apologise for straying off plan - all were fine except one who seemed a little snotty but acknowledged that it would be ok as a one off

Following few months take me to today! Everything is back in place and running normally although time (and this site) has given me the confidence to contact a few creditors to challenge the ones who had reduced but not frozen their interest (using template letters available on this site) and even make a couple of full & final settlement offers!

The best advice I can offer is to have faith in your DMP manager but keep in touch, monitor your statements, file EVERYTHING, keep posting on the forums here and share your experiences!

Oh, I also suggest you contact your creditors/DCS's from time to time to confirm the balance and update your SC account online to keep it accurate and avoid any nasty surprises further down the line!

Cheers all,

MB

markwoods10

Monkeyballs wrote: »

Hi,

If it helps anyone - this is my experience (summarised) which might be of benefit as I've been on my plan for less than a year

I contacted SC and we went through income & expenses and agreed that £500 pcm is available to repay my debts (at the time totalling @ £19.5k) over 3.5 years.

Once the plan was set up and I had my ref. I signed into my DMP through the SC website to make sure everything was present and correct and to read more of the information on their site.

I contacted* each creditor to advise them that I was entering into a DMP with SC, gave them my DMP ref and a contact number for SC confirming that they will be in touch with a budget sheet, list of debts and an offer.

*Contacting creditors was a mix of email, letter and phone call as at this point I did not feel the need to keep copies of my notification to them although I did list creditor and dates as well as names and times if I had called - the exception being payday lenders who I wrote to by registered 1st class mail also asking to cancel CPA and provide written confirmation of receipt and agreement of DMP.

I keep and file all notes and replies in separate envelopes - one per creditor.

Several creditors sent me a letter of default - I had been told to expect these by SC but I still emailed them details for my own peace of mind and filed them.

A couple of debts were passed to debt collection** agencies, I called the DCA and gave them the DMP information and then called and emailed SC the details so they have the most up to date information on their file and I double checked a week later on my DMP to make sure that the info had been corrected (unless SC emailed before then to confirm the changes made).

** Read what you are sent, it may sound scary but they are fine once you give them the DMP information and will freeze your account for 30 days while waiting for SC to contact them - debt collection agencies are not bailiffs!

On the agreed date my first payment left my bank account - I checked my statement online, again for my own peace of mind.

After about 3 weeks (which was in line with what SC told me) I received an email from SC telling me that my statement was available to view - I looked and could see clearly each creditor listed and the payment sent with an estimate of outstanding balance.

All of this happened over the space of maybe 5-6 weeks roughly.

During the following month I got another couple of letters of default which I passed to SC and filed.

The second payment left my account - I checked my statement online to be sure but all was well I felt really good by this point as I had been virtually hassle free with the exception of the default letters and my confidence was increasing as I felt more in control

The third month - no issues everything went to plan as did the following couple of months

Around month 6 I had a lapse with my gambling and panicked which made things worse before I contacted SC who agreed to a lower payment and contacted creditors with the reduced payment and confirmation that it was a "one off" and normal payments would resume the following months - I also called my creditors to advise them of the same and to apologise for straying off plan - all were fine except one who seemed a little snotty but acknowledged that it would be ok as a one off

Following few months take me to today! Everything is back in place and running normally although time (and this site) has given me the confidence to contact a few creditors to challenge the ones who had reduced but not frozen their interest (using template letters available on this site) and even make a couple of full & final settlement offers!

The best advice I can offer is to have faith in your DMP manager but keep in touch, monitor your statements, file EVERYTHING, keep posting on the forums here and share your experiences!

Oh, I also suggest you contact your creditors/DCS's from time to time to confirm the balance and update your SC account online to keep it accurate and avoid any nasty surprises further down the line!

Cheers all,

MB

thanks monkeyballs, know this sound rude but glad i am not alone, it all seems really daunting at first,bur feeling easier reading here,
thanks again
mark

Monkeyballs

Hi Mark,

LOL, nah it's not rude at all as I know exactly what you mean I'm so thankful to this site and everyone on it because it gives me somewhere to sound out my thoughts and concerns to other people in the same boat or at least have been in it and got out again!

When you are struggling you forget that there are others like you in the world as well and you feel like the world is shrinking and is out to get you for being a bad person - sharing helps

MB

Sazzie23

MB

What a great post, I think this would be brilliant on the DMP thread as quite a few newbies starting out and looking for advice.

Mark, welcome aboard, it is scary starting I out, buts it's even more scary not doing anything and not facing up to the reality of debt.

My life has changed since my DMP started, things are still going to be tough for quite a while but without it I dunno where I would have been.

Make sure you know what you rights are with DcA, saves unnecessary worry about the house being cleared out. Stepchange has some good info about this.

Remember there are often hiccups at the start with creditors 'rejecting',bank accounts not working well,for me the trouble was the direct debits dates not working so the SC dd failed,but it got sorted in the end.

Good luck and keep reading the forums

Monkeyballs

Sazzie23 wrote: »

MB

What a great post, I think this would be brilliant on the DMP thread as quite a few newbies starting out and looking for advice.

Thanks Sazzie,

I was considering starting a diary - this was less of a summary than I was going to add LOL but when I started it just came pouring out...

I've added it to the DMP thread and think I will start a diary soon as I'm actively reviewing my DMP each week so it would probably help me as much as it helps noobs

MB