Which DMP do I choose??

gemstarges

Hello

I really hope someone can help me as I am very confused!

I got into a situation at the beginning of the year where payday loans and credit cards were out of control, to take control I decided to enter into a DMP with the company DFH - this is a fee taking company that takes fees off of your monthly payments to arrange to get you out of debt within a certain timeframe, with my disposable income I was able to do it within 13 months. After the first month payment I was made redundant so could not make the second payment, they were good about that and also agreed to lower the payments when I start my new job as my wages have decreased.

However in the meantime I have been contacted by the debt charity stepchange who were very convincing at saying that DFH were naughty at taking fees rather than making sure that all my money goes to the creditors to get me out of debt quicker. I agree with that, so decided to go ahead with them.

I emailed DFH to inform them of my choice and they emailed straight back to say the reason that stepchange don't take fees is because they are funded by creditors and that means their interest is with them and not me, and that is why DFH charge me fees rather than them being funded by creditors.

It doesn't seem to make too much difference to me as in the amount I will have to pay and over what time period. I feel like I should trust stepchange more but DFH are quite convincing!

Help me make this choice!!

LMJ10

Hi

I am in the process of setting up a DMP

I first went to a fee paying company as I was looking at the IVa route I then decided on the DMP

I signed all their paperwork etc but soon came to realise the £200 they were going to take for the first 6 months would be better coming off my debt. They were very nice and have no complaints they explained everything even the fees etc but I got caught up in getting my payments down to the minimum rather than paying off the debt.

Thankfully I saw the light and realised the priority is paying off the debt ASAP so I went with stepchange.

Stepchange said to me creditors prefer them because all your money goes off paying your debt and not to a company

Also I got a letter from Barclays the other day advising me to speak to stepchange.

I'd go with stepchange.

Monkeyballs

Hi Gems,

Good thing you asked!

My advice is to not touch a fee charging DMP with a barge pole and I doubt you'll be told any different from anyone else on this site either

Regardless of what DFH tell you they cannot guarantee you that magical reduction in your debt because your creditors are not obliged to agree to the offers they make!

Yes, SC do get funding from various financial institutions but they need to get money from somewhere and it's being paid to them by your creditors so fair play to them! If you pay £500 per month to SC then that's £500 off your debts where as with a fee paying DMP when you pay £500 then for the first 6 months that's probably £350 off your debts and then for the months following that might increase to £400 but it's still less than you're paying off which sort of makes it another debt to factor in...

I'm with SC are they're excellent, I honestly wouldn't expect a fee charging company to be any better others will suggest either Payplan or CAP (Christian Against Poverty) both free and therefore both better for you financially

More posts will follow shortly I'm sure but go the fee free route PLEASE! and I can promise you won't look back...

Plus, in a few months time you'll feel differently about your debt and might start looking at ways to manage it more yourself... Check out the DMP Mutual Support thread https://forums.moneysavingexpert.com/discussion/4437925

Support is all around you, don't worry and don't be scared

Oh, I need to add that you will need to do some management along the ways anyway but it's all very easy and there's loads of advice to be found (or requested and provided) on this site

MB

eyeopener2

DCH are lining their own pockets at your expense, stepchange don't do that.

So who you gonna pick? Slippery salesmen selling you a line that will make them lovely commission or a well respected debt charity who have worked wonders for 000's of people, including little old me.

No brainer.

Larac

The recommended route on these forums is SC, Payplan or a self managed DMP if you up for it or to do once you are more confident to sort it out on your own. I signed up for a fee paying DMP and saw the light before I committed myself and reverted to SC (thankfully) You don't need to search these forums for too long to find posts where there are examples of the fee paying DMP providers having disappeared into the sunset or have not paid your creditors for whatever reason.

seanavfc92

Echoing previous comments, StepChange have to get the money from somewhere. Just because it comes from the creditors doesn't mean they're more interested in them than you.

Not all creditors pay a donation to StepChange, but it doesn't stop them from setting DMP's up for you regardless!

Best of luck

fatbelly

gemstarges wrote: »

Help me make this choice!!

Go with stepchange (or payplan or do it yourself).

What I usually say is 'when you're in debt, the last thing you need is someone else to pay money to'

Very bad form for DFH to be slandering a legitimate charity in that way. DFH may want to take a look at how they themselves are funded and how that skews their advice.

Sedge123

I will make the decision for you, go with step change!

gemstarges

Thank you so much for your advice, I've made so many mistakes getting into this mess I just didn't want to make another one! I thought it made sense to stick with step change and I am glad I asked! I'm 100% confident now so thank you.