Debt Management company ripped us off!!!

Branks25

My husband and I went with a DMC in September 2009, we had small debts of around £8,000. After five years we now have debts of £16,000, my husband has a CCJ, and we have a Charging Order on our house! The company has now gone into administration, taking with it about £1,800 that we had in 'a pot', supposed to be for paying lump sums to our creditors. We feel we have wasted our money for five years, and are now worse off than before, and don't know what to do next! Any help or advice would be greatly appreciated. Thank you!

FireWyrm

Sadly, there is little you can do. This is the peril of using a Limited Company to do what you could do for yourself. I know it is advice after the fact, but I guess the answer is to chalk it up to experience. You probably wont get anything back from the liquidation but you should try to contact the administrators anyway and register your interest in any money that there might be.

In the meantime, what do your finances look like now, and how much scope do you have to clearing these debts?

longtermplanner

You should have taken the charging order as a huge red flag that this company was worse than useless at helping you get out of debt.

But now you have lost this money in the non existent pot and you need to deal properly with your debts, ignoring the past mistakes as they can't be undone.

How large are your unsecured debts (ie not including the one there is a charging order for)? How much can you reasonably pay towards these debts each month?

What is the state of your mortgage / house? Is it repayment? How much equity is there?

Stepchange or National Debtline would be sensible people for you to talk to. Both are reputable charities.

Monkeyballs

Hi Branks,

So after 5 years your debts have doubled?

At any point have they sent you a statement or have you any evidence of an agreement being put in place with your creditors?

It's a bit of a long shot but you could try speaking to the FOS for advice... I'm thinking that if your creditors have been contacted and told that you are experiencing financial hardship then you may at least be able to reclaim charges?

I don't want to get your hopes up artificially but it's worth a try because although a DMP for example is voluntary and informal I can't think of any reasons for a creditor to support the extra interest and charges made to your accounts?

In the meantime you need to get on the phone to a debt charity, I recommend Step Change and DO NOT WORRY worst case scenario you have to pay but at least it will be at your own rate and you can be confident of your creditors actually getting the money!

Good luck!

MB of G x

Branks25

Thanks to you both for your reply. We have already began to take steps to sort the debts out ourselves. We have about 40,000 equity in the house but can't touch it because of the CO. A hard lesson learned but onwards and upwards. Thanks again.

sourcrates

Branks25 wrote: »

Thanks to you both for your reply. We have already began to take steps to sort the debts out ourselves. We have about 40,000 equity in the house but can't touch it because of the CO. A hard lesson learned but onwards and upwards. Thanks again.

Please don't use any more fee charging debt management companies

-taff

you could also try the FSCS

Depth_Charge

Branks25 wrote: »

Thanks to you both for your reply. We have already began to take steps to sort the debts out ourselves. We have about 40,000 equity in the house but can't touch it because of the CO. A hard lesson learned but onwards and upwards. Thanks again.

Hi

Plenty of free advice & support around

Useful Information below from Citizens Advice on options. DMP providers & managing your own DMP

Debt Option / Remedy Resource
https://nedcab.cabmoney.org.uk/debtremedy.asp

DMPs / Self Managing

https://nedcab.cabmoney.org.uk/remedy_4.asp

https://nedcab.cabmoney.org.uk/dmp.asp

Cabmoney
http://www.cabmoney.org.uk/

Best Wishes

DC

Sazzie23

Branks25 wrote: »

Thanks to you both for your reply. We have already began to take steps to sort the debts out ourselves. We have about 40,000 equity in the house but can't touch it because of the CO. A hard lesson learned but onwards and upwards. Thanks again.

Hi Branks,


You sound very positive, that is admirable and will keep you strong for the new debt free journey. Sorry to hear your tale, that is truly a cautionary warning to anyone on a DMP, even with a charity..make sure you keep an eye on what is happening and that your debts are really going down.


2 things, how much of your additional debts (over the original) are interest ? Contact the creditors with the situation so see if the will take pity on you and remove some of that interest.


If you are going DMP alone, try the NED CAB website who are highly recommended by the DMP support thread folk for self managed. Contact Stepchange & Debtline they are both charities recommended on MSE and will offer you debt advice for free, you don't have to go with them and you don't give them any money now, but maybe getting some proper advice now will save you money in the long run. I can understand you being a bit reluctant to take advice after being burnt, but these are reputable folk with very experienced debt management skills.


Good luck with it and consider joining us on the DMP support thread.

longtermplanner

£40k equity, is after taking the charging order into account?

Is the charging order debt accruing interest at the statutory 8%? If you are not clear about this you need to find out. A charging order without interest can usually be ignored whilst you clear the rest of your debts, but at 8% interest it will be growing alarmingly.

You may be able to remortgage if some of the money is used to clear the charging order debt. But don't do this unless you are sure you can afford the higher mortgage.

Your other option is to sell and clear all your debts and start again. This is a serious suggestion if you can pay little to your debts as both bankruptcy and an IVA are ruled out because of the level of your equity. A prolonged DMP when you have equity and charging orders isn't a good idea.

The internet is a great resource if you want to take control of your situation. The NEDCAB site is great, also look at the straight talking Debt Camel site:http://debtcamel.co.uk/hard-choices/

You have fallen for a "easy way out" con already though, you do need to face up to the reality of your situation even if that means major lifestyle changes. And never go to any commercial debt management firm! You have been unlucky to fall foul of one of the cowboys, but even the best are never any better than the free ones such as Stepchange.