My Debt Management company wants all my cash to give to my creditors

Endofdebtonthehorizon

Hi, I'm Sue & I'm new to this so please be gentle with me if I appear naive.
After 10 long yrs I have finally sold my house & am in a position to pay some (maybe all) of my creditors.
I am with a debt management company following a failed IVA. My Debt Management company was taken over by another last yr & in my statement they have never been able to give me full figures of what is outstanding by my debtors, so I am not entirely sure what I owe, however I contacted them today to say that I would like them to contact my creditors for full & final settlements which they said they would do, they asked how much money I had available to settle my debts & I told them around £15,000.
They rang me back some 10mins later to say that their policy had changed regarding full & final settlements & that they would require me to give them my £15,000 so that they could pay off my creditors as they are going through the list, now even I'm not that stupid so I said I wanted to see something in writing but this is surely not normal practice is it?
I understand the alternative would be to contact them all myself which would be time costly & to be honest some of the debts have changed hansd so many times etc I wouldn't know where to start! Need some advice please

Takeaway_Addict

Please tell us you're not using a debt managment company that you pay a fee to?

Tixy

Don't pay your settlement through a commerical DMP company. They'll be taking a hefty cut from that lump sum figure.

You can easily do this yourself and no reason for it to be costly (well it will cost you a few stamps whereas the DMP provider will probably take a more than £2k.

I would
-cancel your DMP with them (check the T&Cs you probabl yneed to do this in writing).
- ask them for a full list of the payments they have been making on your behalf. If they don't provide this easily send them a subject access request to force them to send you this info.
-write to each creditor and ask for an up to date statement
-work out how much you owe in total and then start sending out low full & final settlement letters. The national debtline factsheet on this has suggestions, tips and a template.

Endofdebtonthehorizon

I do, I pay £35 per mth to them. My total payment is £112.50 per month
What if they refuse to give me the details of the creditors, won't I be in breach of my agreements if my creditors aren't getting paid when I cancel?
What is a subject access request?

Tixy

If they refuse to give you the details then you can force them to by sending a subject access request (SAR) under the data protection act with a £10 fee. They legally must then send you all this information within 40 days. Template here - https://www.nationaldebtline.org/EW/sampleletters/sole-letters/Pages/Personal-information-under-the-Data-Protection-Act-(sole-name)-.aspx.
If the DMP company are a member of Demsa you can also report them for breaching their code of conduct but I would do the SAR as well.

The agreements with your creditors are informal agreements, you can vary them if you choose.

If you know who you currently owe money to you would send them a letter to say you are no longer using x debt management company and will be dealing with them direct and that you will be setting up repayments direct to them in due course and ask for a statement/full transaction breakdown.

As you don't know who you owe money to that stage will have to wait until you get the information from the debt collectors.

In the meantime if any creditors write to you then you write back stating the same thing.

sourcrates

Endofdebtonthehorizon wrote: »

I do, I pay £35 per mth to them. My total payment is £112.50 per month
What if they refuse to give me the details of the creditors, won't I be in breach of my agreements if my creditors aren't getting paid when I cancel?
What is a subject access request?

Oh No, please dump them straight away, do not under any circumstances give them access to your 15 grand.

All these companies do is fleece there customers, they are charging you £35 a month to do nothing, basically.

If you can write a letter, and enter simple details on a computer, you can run your own DMP, so , so many people get "persuaded" to enter DMP`s with these fee taking companies, you dont need to pay anyone for this service.

Your best bet now is to stop paying the DMP company, if you pay via DD, cancel it, inform them in writing, that you no longer wish them to "represent" you.

Your creditors will be in touch with you once they haven't been paid, all you need to do is inform them you are looking into the possibility of settling all the accounts, and you will be in touch shortly.
Its then up to you to make individual offers to each creditor, in writing, start at around 30-40% of whats owed to each one, remember, its a game of negotiation to obtain the best settlement.

National_Debtline

Hi Sue

Further to the information provided by the others, a simple way to get an idea of who you currently have debts with is to check your credit reference files. There are 3 main credit reference agencies operating in the UK and some debts may only be registered on one of them so you can check all 3 to get a complete picture. The 3 credit reference agencies are Experian, Equifax and Call Credit.

As far as I’m aware Experian and Equifax offer a free 1 month trial period on their websites providing you cancel the subscription in time, and you can check the Call Credit information for free on www.noddle.co.uk

You can complain about your DMP provider for not providing account information and statements. DMP companies are regulated by the Financial Conduct Authority (FCA) and they need to comply with the regulations laid out in the Consumer Credit Source Book (CONC). Section 8.8 covers DMPs and there are a few points you could reference in a complaint letter e.g.

CONC 8.8.1 A firm in relation to a customer with whom it has entered into a debt management plan must:

(8) provide a statement to the customer at the start of the debt management plan, and at least annually or at the customer's reasonable request, setting out:

(a) a balance showing the amount owed by the customer, including any interest charges at the beginning of the statement period;
(b) fees, charges and other costs applied over the period of the statement, including any upfront fee or deposit, such as an initial arrangement fee, an arrangement fee, any periodic or management or administrative fee, any cancellation fee and any other costs incurred under the contract;

You can see the full document here:
http://fshandbook.info/FS/html/handbook/CONC/8/8


You can complain in writing to the DMP provider and ultimately escalate a complaint to the Financial Ombudsman Service (FOS) if it isn’t resolved.

James
@natdebtline

Endofdebtonthehorizon

Thanks guys I really appreciate your advice, they have supposedly written to me today telling me why they need my £15k up front, I shall take great delight in replying with a 'not only do you not get my money but you can stick your service' type letter, written far more eloquently of course

Depth_Charge

Hi Endofdebt

Following on from others -

Citizens Advice have an award winning and now established online self help debt management plan resource, it does and saves everything, its free, puts you in control, all your money goes to and stays with your creditors. It also has a transfer provider facility with standard letters etc. The National Debtline poster has kindly put up the FCA information and links that is making running your own DMP even easier and acceptable to creditors

CABmoney DIY DMP resources

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

http://cabmoney.org.uk/

CABmoney transfer provider example plan

https://nedcab.cabmoney.org.uk/dmptour2.asp

Might be worth a look, your choice at the end of the day

Best Wishes

DC

happybunny86

I used step change for a debt management plan. They dont charge anything and were absolutely fantastic. Step change obviously knew who my creditors were but due to data protection no company would give them an updated balance. I imagine this would be the same with your company. I used to call/phone/email my creditors every 6 months for an updated balance and update step change on the new balance.
I found going through a charity such as step change easier then negotiating by myself. They had better cut through with my creditors that I was taking paying them back seriously and were able to stop interest on some of my debts. I also struggled to organise money/budget at the time so it was much easier just to pay a lump sum to one place on pay day for all my debts. Hope this is helpful

theoretica

Endofdebtonthehorizon wrote: »

I do, I pay £35 per mth to them. My total payment is £112.50 per month

Depending on whatever you signed they may be planning to claim nearly 1/3 of your £15k too. Worth a fair bit of time to avoid this I think.