What's to stop people maxing out credit and going on a DMP?

gazfocus

Just curious really. Not having a go at anyone but been reading some of the debt free threads and just wondered, what's to stop people maxing out as much credit as they can and then going onto a DMP?

stator

Having a sense of morals?
Not wanting an awful credit rating?
If the credit card companies thought you deliberately got yourself into trouble I doubt they would be so understanding when it came to accepting your proposed payment plans

jmhgibson123

nothing apart from 6 years of not getting credit, mortgages or phone contracts..bit silly if anyone did this deliberate

gazfocus

Yeah I get that but what I mean is, say someone is already struggling financially, wit's a DMP looming, what's to stop them from just maxing out everything before the DMP starts?

I'm only asking out of curiosity after reading debt free threads. I'm thinking of training as a debt adviser for a charity so this kind of thing really interests me.

PinkPoppies

You might get interest frozen but you still have to pay it all back?

glentoran99

gazfocus wrote: »

Yeah I get that but what I mean is, say someone is already struggling financially, wit's a DMP looming, what's to stop them from just maxing out everything before the DMP starts?

I'm only asking out of curiosity after reading debt free threads. I'm thinking of training as a debt adviser for a charity so this kind of thing really interests me.

absolutely nothing,

glentoran99

PinkPoppies wrote: »

You might get interest frozen but you still have to pay it all back?

not if you settle for a reduced amount

spot3

in my experience the DMP didn't loom until I'd maxed out the credit trying to pay for all the credit, but you're right there's nothing to stop someone doing that on purpose, but I think you'd probably learn pretty fast from that mistake.

Growurown

gazfocus wrote: »

Just curious really. Not having a go at anyone but been reading some of the debt free threads and just wondered, what's to stop people maxing out as much credit as they can and then going onto a DMP?

Nothing I suppose, but judging by the info in the threads I have been reading it doesn't seem to happen. I can't think of one person who has admitted to doing this but then maybe it is something they wouldn't share anyway. In my case it was a manageable debt until the credit crunch hit. Then several of my CC providers wanted to put up the amount of the minimum payments on the card and that pushed us over the limit of what we could afford to pay.

What I have heard more of is people borrowing as much as they can and then going bankrupt or getting a debt relief order.

moohound

I think there would be a problem say if you went out and spent £2K on a watch or TV and then signed up to a DMP a month later, the creditors could say you had no intention of paying it back, under the terms you had signed up for, and it could perhaps be viewed as fraudulent.

I think some people do max some things out before going BR/DRO though, I suppose it would be sensible to buy a months shopping and a tank of fuel.

Having been on a DMP it is a situation I would have rather not been in but was better than the months preceding it.

Bettingmad

May as well say it as nobody else has........Fraud=criminal offence. Deliberately obtaining/using credit at the point of knowing that you will not be able to pay it back. It would be very silly to take the risk.