Self managed or Company DMP

phoenixx

Hi all

I have read quite a few posts about the pros and cons of self managed DMPs and am considering it but not sure if it is too risky. We have been in a DMP with Step Change since 2012 and they have been very supportive and helpful. There are one or two aspects of the way they allocate payments that are causing problems in terms of interest with some creditors.

M&S are charging 23.9% interest on our debts - when asked to reduce the interest we are told that it is the relatively high amount we are paying back each month that is triggering the punitive interest. Barclays are equally tough in their approach - no flexibility unless our payments are reduced and by the SC rules we cannot reduce as it is a pro rata system.

It was originally our mortgage provider NRAM who insisted that we go into a managed DMP as we had arrears on the secured amount. This is no longer the case as we have paid these off. Is there a reason why we cannot self manage? Any advice would be gratefully received.

fatbelly

If you're capable of writing letters and keeping an organised file, and won't allow yourself to be harassed by stupid DCA workers, then I think the self managed route has advantages in terms of flexibility

National Debtline has loads of useful resources, and the CAB has online help through CABMoney. This is the CABCornwall link

https://cornwall.cabmoney.org.uk/

phoenixx

Thanks for the advice fatbelly. Just checking that the creditors can't force us down a particular DMP route. Need to update the signature at the bottom as we owe rather less now - still a long way to go but we're working hard to sort it out.

zenshi

I'm in self managed and although it was very daunting to start with, it's been a fairly easy ride so far

phoenixx

Thanks Zenshi - good to know there are people succeeding on self management.

FireWyrm

Self management used to be the norm, it was called, "dealing with the problem". There is no legal requirement for a management charity (or company) to do this for you anymore than there is a requirement for an Estate Agent to sell your house. These middle-men have sprung up because people feel incapable of writing a decent concise business letter and think it will be easier if someone else does it for them - no other reason at all, somewhere along the line, this started to become the norm and it has snowballed from there.

From your initial post, you sound like you are an articulate and intelligent adult, so just like not needing an Estate Agent, you are free to deal with the debts yourself in whatever way you see fit. These middle-men do nothing other than you can do for yourself. They do not get special rates or negotiate special terms, they simply send out a letter stating what you can pay and how much your outgoings are a month. Some gullible people are even charged for this 'service' and it is a scandal of epic and growing proportions.

longtermplanner

phoenixx wrote: »

Is there a reason why we cannot self manage?

No reason at all.

HOWEVER that doesnt mean it's going to be any easier to get the interest frozen on those debts. In a self-managed DMP you still have to provide your creditors with a Statement of Affairs which has to look reasonable. So you can't just decide to self-manage and cut the amount you pay to the creditors who aren't freezing interest in the hope that they will start freezing interest.

sourcrates

Echo everything Firewym says above, there is absolutely nothing a debt management company(avoid like Ebola), or a free debt charity, does for you in a DMP, that you cannot do for yourself.


If you can read, write, and have a printer, do it yourself.
You can negotiate with creditors yourself to reduce, or even stop interest, you make your own payments, so you know it has been paid.
Stepchange and the other charities do a sterling job, helping with more serious or complex debt issues, but a DMP is a bread and butter thing anyone can do

phoenixx

Thank you all for the advice. I think there is a lot to be said for taking control and doing things ourselves. NRAM really put us under pressure to go with a company or charity two years ago but I don't fear them as I used to. This forum has put me straight about many things, not least that a DMP is not a thing of mystique and great difficulty.

Karen777

Hi. I went with payplan initially because I could not cope with the situation and the relief of someone else dealing with creditors was what I needed for the first year. I was stressed/ depressed/ anxious and just could not cope with it at the time. But then after a year ish I then went self managed after encouragement from people on here and it's been fine - even liberating as I am actually managing my own money in a positive way for the first time in my life. Like the others have said, if you can keep things organised then go for it. If there is any risk you can't, then don't. It's not worth losing everything you have worked so hard for in my opinion. but otherwise - do it. I have a book with a section for every creditor, their phone numbers, my account numbers, and reminders in my calender for what day statements are due. I move the payments from my wage account when I get paid so I don't accidentally spend the money and so far so good. Oh and I use ynab. which is also a bit of a revelation that I can budget!