Debt Settlement Companies Help

craighughes173

Hi

I currently have a debt management plan with stepchange and am totally confused by what is going on. i want my debts to be paid off. However there are charges still being put on to my accounts and it seems like i am still in the trap of never paying off my debt. The estimated date is over 8 years. But I actually owe more this month than last so i cannot see this.

I have tried to phone a number of times and have not got through - as large number of calls being dealt with! i have been talking to an advisor from a debt settlement company - who in the plan they offer will pay my debts off in 5 years.

This seems too good to be true - and i have seen alot of information about not going through a fee charging company. However, if there if i pay less than the amount i owe via there negotiations for settlement and they take their fee from that - how is there a fee a there is no cost to me??

For example 36,000 debt reduced to 26,000 = 60 payments of 445 - leaves me paying off less and the debt being sorted.

i have been informed that stepchange have some kind of funding from the banking sector (i dont know if this is true) but it seems like i am still going to be stuck in a trap. which i will be if interest is still charged.

The "cost" of me doing this is 11,000 however it seems that this cost is from the creditors. I pay 10,000 less and they still get paid - how is this paying a fee?
Also - what is to stop me doing this myself i.e after i have entered in to the contract and the creditors have agreed, cancel the agreement and pay the full monthly amount amount myself and clear the debt quicker.

Any advice welcome

sourcrates

craighughes173 wrote: »

Hi

I currently have a debt management plan with stepchange and am totally confused by what is going on. i want my debts to be paid off. However there are charges still being put on to my accounts and it seems like i am still in the trap of never paying off my debt. The estimated date is over 8 years. But I actually owe more this month than last so i cannot see this.

I have tried to phone a number of times and have not got through - as large number of calls being dealt with! i have been talking to an advisor from a debt settlement company - who in the plan they offer will pay my debts off in 5 years.

This seems too good to be true - and i have seen alot of information about not going through a fee charging company. However, if there if i pay less than the amount i owe via there negotiations for settlement and they take their fee from that - how is there a fee a there is no cost to me??

For example 36,000 debt reduced to 26,000 = 60 payments of 445 - leaves me paying off less and the debt being sorted.

i have been informed that stepchange have some kind of funding from the banking sector (i dont know if this is true) but it seems like i am still going to be stuck in a trap. which i will be if interest is still charged.

The "cost" of me doing this is 11,000 however it seems that this cost is from the creditors. I pay 10,000 less and they still get paid - how is this paying a fee?
Also - what is to stop me doing this myself i.e after i have entered in to the contract and the creditors have agreed, cancel the agreement and pay the full monthly amount amount myself and clear the debt quicker.

Any advice welcome

Hi,
Sorry to hear your unhappy with your DMP.

Creditors are under no obligation to stop interest or charges, its all down to negotiation, if you are still having interest added, then you should write to the creditor concerned, and complain about it, you should not use this as an excuse to line the pockets of any 3rd party debt management company.

Some of these limited companies are charging there clients up to 90% of there monthly payment in fees, which is a complete disgrace, and should not be allowed, thus prolonging the time they are in debt, by many years.

There are ways and means of getting interest stopped, sometimes a written complaint is sufficient, other times you may need to reduce the amount you are paying a creditor, to get interest stopped, you can best do this by self managing your DMP, its really simple to do, and puts you back in control of things.

Using a 3rd party debt management company who will charge you extortionate fees, and greatly prolong the time you are in debt, is certainly NOT the way to tackle your debt problem !!!!!

Tixy

craighughes173 wrote: »

i have been talking to an advisor from a debt settlement company - who in the plan they offer will pay my debts off in 5 years.

Please don't use any of these debt settlement companies. All the advice and press relating to them is negative. You'll end up paying far more in fees, are more likely to end up with creditors taking court action against you and with absolutely no guarantee that your creditors will agree to these offered settlements.

If the company you are speaking to are listed on the first post by Zerdi, and that is how you found this thread to post on, then even more reason to avoid them.


This other thread is one example of people posting in relation to debt settlement companies. https://forums.moneysavingexpert.com/discussion/4733437

DorisTrousers

craighughes173 wrote: »

Hi

I currently have a debt management plan with stepchange and am totally confused by what is going on. i want my debts to be paid off. However there are charges still being put on to my accounts and it seems like i am still in the trap of never paying off my debt. The estimated date is over 8 years. But I actually owe more this month than last so i cannot see this.

I have tried to phone a number of times and have not got through - as large number of calls being dealt with! i have been talking to an advisor from a debt settlement company - who in the plan they offer will pay my debts off in 5 years.

This seems too good to be true - and i have seen alot of information about not going through a fee charging company. However, if there if i pay less than the amount i owe via there negotiations for settlement and they take their fee from that - how is there a fee a there is no cost to me??

For example 36,000 debt reduced to 26,000 = 60 payments of 445 - leaves me paying off less and the debt being sorted.

i have been informed that stepchange have some kind of funding from the banking sector (i dont know if this is true) but it seems like i am still going to be stuck in a trap. which i will be if interest is still charged.

The "cost" of me doing this is 11,000 however it seems that this cost is from the creditors. I pay 10,000 less and they still get paid - how is this paying a fee?
Also - what is to stop me doing this myself i.e after i have entered in to the contract and the creditors have agreed, cancel the agreement and pay the full monthly amount amount myself and clear the debt quicker.

Any advice welcome

Do not countenance debt settlement under any circumstances. It seems that every company that enters that market ends up going bust, and you lose your money.

Unfortunately, your DMP is not working, so it is reasonable to consider your next step. Are you able to do an IVA? Have you discussed this with anyone? Do you have any reason why you could not go Bankrupt? Have you discussed this with anyone?

SC are funded by creditors, and their income depends on how much they collect as they receive a percentage. This has led to accusations, from some, of them being in the pocket of their paymasters, creditors, or somehow being not impartial. Whether that is a fair accusation or not is another matter.

The trend within the debt advice industry, whether fee paying or not, is definitely moving away from DMP's as being the port of first call, mainly because of the reason you have stated which is that they are useless if creditors do not agree. Other solutions, such as BR, IVA, DRO or even self help are cumulatively far out-stripping DMP's now. Most organisations within the industry will have statistics available that will illustrate that point, or not as the case may be. StepChange, and I have their latest statistics on my desk, do not do so. This is a huge mistake, in my opinion, as it undoubtedly leads to suspicion of their motives. Overall, this is probably not fair, but only they can change that.

By the way, the top list is really a bit of a red herring. Most of those organisations have simply decided not to look at DMP's and concentrate on insolvencies, for which they will have a different regulator.

craighughes173

Hello

I am 36k in debt and have gone through step change and am on a DMP. I have been looking at Debt settlement options with a company. I have been infored that they can reduce debt by settling debt at a lower rate and also take their payment from these savings.

the figures look like:
36000 debt
10000 saving
60xpayments of 445 = debt cleared

However - only 250 (approx) is actually going to pay this meaning the debt must be being settled for a lot less than this.

I have filled in all forms as i want to get cleared but am not totally convinced as seems to good to be true.

Stepchange are a Charity agreed, but they are funded somewhat by the creditors - I am still having interest being put on my accounts and feel like I am in they same trap but with different people. There is a 5 year plan to get out of debt - step change i am on at least 8.

I have always been advised again t these FEE charging companies - but how can there be a fee if you pay less than you borrowed and they claim their fees form the negotiations??

Any experiences with these companies or opinions would be great. also any advice?
Can i negotiate myself ? what is there to stop me cancelling the agreement after they have negotiated and then pay the full amount myself directly ?

Thanks

Time_to_face_the_music

craighughes173 wrote: »

Hello

I am 36k in debt and have gone through step change and am on a DMP. I have been looking at Debt settlement options with a company. I have been infored that they can reduce debt by settling debt at a lower rate and also take their payment from these savings.

the figures look like:
36000 debt
10000 saving
60xpayments of 445 = debt cleared

However - only 250 (approx) is actually going to pay this meaning the debt must be being settled for a lot less than this.

I have filled in all forms as i want to get cleared but am not totally convinced as seems to good to be true.

Stepchange are a Charity agreed, but they are funded somewhat by the creditors - I am still having interest being put on my accounts and feel like I am in they same trap but with different people. There is a 5 year plan to get out of debt - step change i am on at least 8.

I have always been advised again t these FEE charging companies - but how can there be a fee if you pay less than you borrowed and they claim their fees form the negotiations??

Any experiences with these companies or opinions would be great. also any advice?
Can i negotiate myself ? what is there to stop me cancelling the agreement after they have negotiated and then pay the full amount myself directly ?

Thanks

Simple answer: Not with a barge pole!

These companies do not pay your creditors, they try to prove the debt unenforceable then get lower settlements but in the meantime they keep ALL of the money you pay them. Check out the fees they charge or share the name of the company and someone will check for you.

You can check if your debt is unenforceable by sending CCA requests yourself. A lot depends on the dates the debts were taken out, pre-2007 makes it sometimes difficult for creditors to come up with the correct paperwork.

Read on these forums about other people who have used companies like this and you will always find it ends in tears, often with large amounts of money paid and never being able to recover it. Please don't do it.

TTFTM x