DMP & Mutual Support Thread - Part 10

Ellieseleven

Great news TTFTM - the finishing line is in sight for you now and we will all be cheering you over it!

I will dip under 16k on my next payment - I'm just £2 over 16k at the moment lol;)

BTW Sazzie, loving the post of the month award that you have received...very well deserved.

Take care all
Ellie xx

Ali80

Hi,

Had my first 2 default letters today (with acceptance of my DMP), both from Capital One. I think if I hadn't found this forum I would be really worried about this, but I guess it's a good thing as they will be removed from my credit file sooner .

Does anybody have any experience with Natwest? The majority of my debt (about £27k) is with them. I have 2 credit cards and an overdraft and a loan which shows £22,500 outstanding with them and I don't know what to expect. The loan would have had another 5 years to run. I'm wondering whether they are likely to add the interest which would have been paid had I not been on a DMP, or are they likely to freeze the interest?

Thanks,

Ali

Genie1963

Hi everyone. I have been following this thread for ages and it gave me the confidence to start a DMP with Step Change last Oct. I've had a few problems with creditors refusing to budge on interest payments but I am getting there slowly but surely. Some have defaulted, others have frozen or reduced interest for 12 months.

My question is regarding Barclaycard. My DMP pays them £140 per month on a debt of around £6,500. They have applied interest of 12.9% which equates to around £50-60 per month. I have been phoning them regularly to try and reduce the interest. When I spoke to them today, they suggested that if I tell them I can only afford to pay £60 per month, they will reduce the interest to zero for 12 months. They said I don't need to tell Stepchange and can continue to pay £140 and therefore the debt will reduce more quickly. I asked whether or not they could default the account which would freeze the interest but apparently they only do this if I miss 7 months total payment. It feels slightly underhand to me to say I can only pay £60 to get them to freeze interest and then continue to pay £140 via Stepchange and not tell SC what I am doing. Or am I being hypersensitive and should I just look after number 1 and do whatever I need to do to pay off my debts with as little interest as possible. Don't get me wrong, I accept that I have to pay some interest but my total debts are over £60k and therefore clearing them asap is really important to me and my husband.

Any advise would be appreciated. I'm losing a lot of sleep

james_joyce

Genie1963 wrote: »

Hi everyone. I have been following this thread for ages and it gave me the confidence to start a DMP with Step Change last Oct. I've had a few problems with creditors refusing to budge on interest payments but I am getting there slowly but surely. Some have defaulted, others have frozen or reduced interest for 12 months.

My question is regarding Barclaycard. My DMP pays them £140 per month on a debt of around £6,500. They have applied interest of 12.9% which equates to around £50-60 per month. I have been phoning them regularly to try and reduce the interest. When I spoke to them today, they suggested that if I tell them I can only afford to pay £60 per month, they will reduce the interest to zero for 12 months. They said I don't need to tell Stepchange and can continue to pay £140 and therefore the debt will reduce more quickly. I asked whether or not they could default the account which would freeze the interest but apparently they only do this if I miss 7 months total payment. It feels slightly underhand to me to say I can only pay £60 to get them to freeze interest and then continue to pay £140 via Stepchange and not tell SC what I am doing. Or am I being hypersensitive and should I just look after number 1 and do whatever I need to do to pay off my debts with as little interest as possible. Don't get me wrong, I accept that I have to pay some interest but my total debts are over £60k and therefore clearing them asap is really important to me and my husband.

Any advise would be appreciated. I'm losing a lot of sleep

Hi, and welcome to the forum!

I've just started a self-managed DMP so I'm not familiar with Step Change or how to work with them. However your DMP payments sound quite expensive to me - I was just working out that per £ of debt, you are paying about the same as I was before my DMP. Is there any scope to review your budget again with SC and maybe get your total DMP monthly payment reduced?

I found with Barclaycard that my very low DMP amount (about 0.3% of my debt per month) ironically seems to make it easier to get zero-interest arrangements.

In your shoes my instinct would be to go with what's best for myself. Even if you fall out with StepChange, as I understand it you can always transfer your DMP out of SC - to another charity or to yourself. Others on here may be able to advise further on this.

Regards
James

PS: I've just realised what the £60 is about - Barclaycard mean you will come below 1% of your debt as your monthly payment. I think 1% and 0.5% are triggers for them to get steadily more generous the lower you go.

james_joyce

Ali80 wrote: »

Hi,

Had my first 2 default letters today (with acceptance of my DMP), both from Capital One. I think if I hadn't found this forum I would be really worried about this, but I guess it's a good thing as they will be removed from my credit file sooner .

Does anybody have any experience with Natwest? The majority of my debt (about £27k) is with them. I have 2 credit cards and an overdraft and a loan which shows £22,500 outstanding with them and I don't know what to expect. The loan would have had another 5 years to run. I'm wondering whether they are likely to add the interest which would have been paid had I not been on a DMP, or are they likely to freeze the interest?

Thanks,

Ali

Hi Ali, I've not been involved with NatWest but I do have a credit card with my old bank. (I paid off the overdraft with my old bank before entering DMP to keep my wife out of it, since it was a joint account with her).

Just to check, have you moved your current account to a bank you have no debts with and got your regular income (salary etc) paid into that?

My understanding is that all 'Consumer Credit Act' type unsecured lending gets treated in a similar way so it's quite possible they will freeze the interest on your loan. I am waiting to hear back from Hitachi about something similar.

Regards
James

Ali80

james_joyce wrote: »

Hi Ali, I've not been involved with NatWest but I do have a credit card with my old bank. (I paid off the overdraft with my old bank before entering DMP to keep my wife out of it, since it was a joint account with her).

Just to check, have you moved your current account to a bank you have no debts with and got your regular income (salary etc) paid into that?

My understanding is that all 'Consumer Credit Act' type unsecured lending gets treated in a similar way so it's quite possible they will freeze the interest on your loan. I am waiting to hear back from Hitachi about something similar.

Regards
James

Hi James,
Thanks for your reply. I have opened a cash card account with Nationwide and arranged for my next lot of wages to be paid into it. I decided to defer the start of my SC DMP until April 1st to build up an emergency fund and am currently paying each creditor £1 in token payments. I'm just a little concerned about how Natwest are going to react since I have su a large proportion of my debt with them....guess I will have to wait and see!

I'm really interested in what you had to say about BC also, I owe them £5,200 and SC have advised me that they are going to pay £96. I'm guessing based on your posts and others on this thread that since this is more than 1% they will continue to charge interest. I may consider going self managed once this has all settled down. The information on this thread is so useful and I've already learnt so much from it!

Puzzcat

Ali80 wrote: »

Hi,

Had my first 2 default letters today (with acceptance of my DMP), both from Capital One. I think if I hadn't found this forum I would be really worried about this, but I guess it's a good thing as they will be removed from my credit file sooner .

Does anybody have any experience with Natwest? The majority of my debt (about £27k) is with them. I have 2 credit cards and an overdraft and a loan which shows £22,500 outstanding with them and I don't know what to expect. The loan would have had another 5 years to run. I'm wondering whether they are likely to add the interest which would have been paid had I not been on a DMP, or are they likely to freeze the interest?

Thanks,

Ali

Hi Ali and welcome,


A third of my total debt (60k at the start) was with N*twest. As I understand it the interest on the loan is front loaded so whatever you owe now is the amount that will go into the dmp, no more interest should be applied. In fact they have been great, no trouble at all and I had overdraft, loan and cc with them.
The only creditor I pay any interest on at the moment is Creat*on but that's less than £10 a month, having battered them with the FOS..


Keep posting we are all here to help!
Puzz. x

Puzzcat

Genie1963 wrote: »

Hi everyone. I have been following this thread for ages and it gave me the confidence to start a DMP with Step Change last Oct. I've had a few problems with creditors refusing to budge on interest payments but I am getting there slowly but surely. Some have defaulted, others have frozen or reduced interest for 12 months.

My question is regarding Barclaycard. My DMP pays them £140 per month on a debt of around £6,500. They have applied interest of 12.9% which equates to around £50-60 per month. I have been phoning them regularly to try and reduce the interest. When I spoke to them today, they suggested that if I tell them I can only afford to pay £60 per month, they will reduce the interest to zero for 12 months. They said I don't need to tell Stepchange and can continue to pay £140 and therefore the debt will reduce more quickly. I asked whether or not they could default the account which would freeze the interest but apparently they only do this if I miss 7 months total payment. It feels slightly underhand to me to say I can only pay £60 to get them to freeze interest and then continue to pay £140 via Stepchange and not tell SC what I am doing. Or am I being hypersensitive and should I just look after number 1 and do whatever I need to do to pay off my debts with as little interest as possible. Don't get me wrong, I accept that I have to pay some interest but my total debts are over £60k and therefore clearing them asap is really important to me and my husband.

Any advise would be appreciated. I'm losing a lot of sleep

Hi and welcome,


Slightly confused because sc distribute the payments so you wouldn't be able to pay BC less each month unless you self manage. They definately have guidelines on payments/percentage of interest. I have just hit 1% but its still showing as no interest on my statement.. I am watching with interest to see what happens....!


They also don't generally default just mark the credit files with arrangement to pay, I have asked but they won't budge..!


Puzz. x

james_joyce

Puzzcat wrote: »

Hi and welcome,


Slightly confused because sc distribute the payments so you wouldn't be able to pay BC less each month unless you self manage. They definately have guidelines on payments/percentage of interest. I have just hit 1% but its still showing as no interest on my statement.. I am watching with interest to see what happens....!


They also don't generally default just mark the credit files with arrangement to pay, I have asked but they won't budge..!


Puzz. x

Hi Puzz, I think we're saying £140 would still go via SC to BC, it's just there would be no interest for 12 months and BC would technically only require £60, i.e. the extra £80 would be a voluntary overpayment.

Ali80

Thanks Puzz,
Glad to hear you had an ok time with NatWest. Hopefully it will be the same for me! I've always banked with Natwest so I feel a certain kind of loyalty to them I guess, but I just want to pay them back without them making things more difficult!
Ali