Time limits on DMP's?

meredith132

Just wondering if there is a benchmark figure in years in which DMP's are expected to be paid up by.

andy1886

Don't think so . Mine will be paid up within 5 years of it being set up . if you read this forum there are a few where it will never be paid up . I do think though that if the timescale is too long then it should be a case of looking at the alternatives to a dmp . Obviously the ratio of debt and monthly repayment towards it needs to be achievable in a relatively short period of time , people shouldnot have their lives on hold for too great a time .

meredith132

Yes I can see 7 years being realistic but 5 years would make me very happy. Either way I am sure thats quicker than carrying on without a DMP. Which is of course in the creditors favour!

fermi

DMP protocol says that a DMP should only be offered when:

The DMP is projected to pay off each debt within 10 years or there is potential that improved circumstances will reduce full repayment to within 10 years and these circumstances are recorded. (In exceptional circumstances a DMP may be offered where the plan will run for more than 10 years and there is unlikely to be an improvement in circumstances. In such cases the provider should record reasons why the plan was offered to satisfy subsequent monitoring)..

meredith132

Thank you , that gives me peace of mind. I was reading a lot of people are clearing debt in under 5 years and I was concerned if I go DMP this maybe too optimistic in my circumstances.

runforlife

Also bear in mind Meredith that your situation will change, probably for the better so there may be opportunity to increase payments to your DMP and pay it off earlier than originaly forecast.

From my experience once things have stabilised after 2 or 3 months you begin to learn to live financially day to day, week to week etc. You learn to budget and will get a real kick from saving money and in particular not purchasing on an impulse buy.

My relentless 'nagging' to turn off lights in the house as well as being more savvy with heating or electricity (turn the thermostat down a degree or two) has resulted in our monthly DD to EON being reduced by £40. Result

One more word of advice taken from the YNAB philosophy. Be prepared to 'roll with the punches'. Don't beat yourself up too much when things don't go according to plan.

All the best.

meredith132

Thank you :)Yes I am now seeing how wasteful I have been. When the ex left I got strict on heating etc and my bill is reduced by £50 a month. I never used to worry about stuff like that. My new man is brilliant with money, loves his vouchers ! So I am learning a lot from him. I am intending on ebaying, selling gold etc for some sort of emergency fund. My biggest fear is not getting a car loan if needed. but I would probably not get one easily with the amount of outstanding credit I have anyway!

blisteringblue

I got a letter from MBNA who actually are our biggest creditor (30%) over 2 cards, and they basically said, as our DMP would be under 5 years and as long as we keep up the agreed payment they would freeze the account. It's been placed in their "reduced payment program".

So I would say if you can get it to as close to 5 years as possible you are unlikely to get much hassle.

meredith132

Thats interesting, I have a CC with MBNA too.I have been advised by SC to do token payments for a year, but I think I could slash that to 6 months. Then its a case of blasting that debt away. 7 years seems more realistic for now but I think with a new attitude towards finances and a lot determination 5 is doable and definately prefereable.

blisteringblue

MBNA were perfect to deal with, not sure why others have had horror stories? Here is the info straight from the horses mouth

meredith132

Wow ! So did you self DMP? I have been in touch with SC .