DMP and Guarantor Loans, please help

chrisc2351

Hi there,


I am new to these forums so my apologies in advance if I get anything wrong.


I have recently consulted Step Change in an attempt to sort my finances out for good. I have around £30k. I am anxious all the time, nervous about the phone ringing and just want to sort myself out properly. My debt originated from a tragic accident I was involved in on Christmas Day. I used money as a means of coping and to be honest buried my head in the sand for a years.


Step Change have been great, I found their online tool really useful and can finally see some light at the end of the tunnel.


I do however have an issue with Amigo and TFS Loans. I have been honest with Step Change and disclosed the loans as they are half the problem. Reading my agreement I doubt they will budge or allow my plan but I thought I would seek your advice as well.


I have written both companies a letter explaining my situation and why I am looking to consolidate my payments. In my letter I have detailed the reasons for my financial situation and requested they accept my plan? I have explained in my letter that the debt is my problem and I believe I should pay it not my guarantor. I have also told them I refused an IVA and instead opted for a DMP where I can pay their full balances I would have paid if the original agreements were to continue. I did add a note in the bottom to remind them my current agreements are up to date and I have not formally entered any arrangements to ensure they don't say I have breached my contract.


Any help or advice would be great. I hope I have made sense.


Thanks


Chris

Tixy

Hi and welcome to the forum

Very unlikely they would agree not to chase your guarantor for any shortfall in payment.

They'll be willing to accept a part payment from you and the remainder made up by your guarantor, and as long as both payments are paid on time it should not impact on your guarantor's credit file.

chrisc2351

Thanks Tixy,

I have written to them as I said above so I will keep you updated with their reply but I think your right :-(.

Thanks again!

Chris

seanavfc92

chrisc2351 wrote: »

Thanks Tixy,

I have written to them as I said above so I will keep you updated with their reply but I think your right :-(.

Thanks again!

Chris

The guarantor will be liable for any shortfall.

If your contractual payment is £200 and your DMP pays it £50 per month, your guarantor will have to pay the additional £150 per month.

The creditor can take legal action on you and the guarantor if the contractual payments aren't met.

Pixie5740

Have you spoken with your guarantors about your DMP yet? Better they hear it from you before the loan company comes knocking. Your guarantor might be alright about it and be in a position to repay the loan in full now and then you could pay your guarantor £50 a month instead.

chrisc2351

Hello,

I have written them a letter being honest about my situation. I asked in the letter if the company would be willing to accept my DMP if they were to disclose the full amount due as if the loan was the run full time inclusive of their interest charges etc. I am hoping they see this an an honest approach and willingness to repay the debt in full - As I said previously it is my problem and as such I should repay the full debt. This way, the company do not lose out, albeit the agreement would need to be extended by two years.

I will let you know what they say but fingers crossed for a good answer.

Pixie5740

You can ask the loan company to accept your DMP but they are within their rights to ask your guarantor to make up any shortfall between your DMP payments and what your loan repayments should be. So if, at the moment, you should be repaying £200 a month but can only offer £50 on your DMP then they could go after your guarantor for the £150 shortfall. That's the whole point of guarantor loans, when you can't repay they can and will come after your guarantor.

I strongly urge you to speak with your guarantor about all this if you haven't already.

XXSCOTSLASSXX

I agree totally with pixie u must speak with the guarantors of these loans. The loan companies will not ask the guarantors for any shortfall in payments...they will just take money straight from their accounts and report negatively on their credit reports if full payments are not made while then chasing them for full payment of your loans...is all very well that u have written and been honest to the loan companies they have a watertight fall back tho which is ur guarantors which unfortunately ur guarantors have already agreed fully to. U need to make them aware they are liable for the payments if u enter into a dmp or an iva asap.

Time_to_face_the_music

chrisc2351 wrote: »

Hi there,

I am new to these forums so my apologies in advance if I get anything wrong.

I have recently consulted Step Change in an attempt to sort my finances out for good. I have around £30k. I am anxious all the time, nervous about the phone ringing and just want to sort myself out properly. My debt originated from a tragic accident I was involved in on Christmas Day. I used money as a means of coping and to be honest buried my head in the sand for a years.

Step Change have been great, I found their online tool really useful and can finally see some light at the end of the tunnel.

I do however have an issue with Amigo and TFS Loans. I have been honest with Step Change and disclosed the loans as they are half the problem. Reading my agreement I doubt they will budge or allow my plan but I thought I would seek your advice as well.

I have written both companies a letter explaining my situation and why I am looking to consolidate my payments. In my letter I have detailed the reasons for my financial situation and requested they accept my plan? I have explained in my letter that the debt is my problem and I believe I should pay it not my guarantor. I have also told them I refused an IVA and instead opted for a DMP where I can pay their full balances I would have paid if the original agreements were to continue. I did add a note in the bottom to remind them my current agreements are up to date and I have not formally entered any arrangements to ensure they don't say I have breached my contract.

Any help or advice would be great. I hope I have made sense.

Thanks

Chris

Hi Chris and welcome :hello:

How much is remaining on each of the guarantor loans and how much is your normal payment to each?

How much is total payment due to DMP? How much is calculated payment to each guarantor loan from this total amount?

How many more creditors? How much is total owed for each and due amount from DMP to each?

Sorry for all the questions but have previously advised someone on this issue. Suggestion was to reduce payments to all other creditors to token payments and prioritise paying off guarantor loans using all money available for DMP. At end of guarantor loan, then start full DMP and allocate full money available to other creditors.

It may not work for you but it is a possible solution. If you don't mind sharing the figures in either a post here or a PM, I may be able to figure something out for you.

TTFTM x

Time_to_face_the_music

Hi Chris, have answered your message and hope this helps.