DMP & Mutual Support Thread - Part 11

Sazzie23

Boldhoof wrote: »

Thanks to all for the responses.
Is there another free credit check we can use, given that Noodle is having some issues.

I think you can get a free trial with experian but you have to remember to cancel or it costs £14 a month.

Sazzie23

Sleepysophie wrote: »

Hi, its the first time I have posted on here so I hope its in the right place. I am concerned that I may have been given some bad advice by taking out a DMP. This is because I pay a monthly amount over to the DMP and they liaise with my creditors and this way all the hassle and worry is supposed to be releaved from me.
So far so good right?
Only its not working.
The problem is that some creditors have not accepted the DMP proposed as they argue that the money being offered to them is more than the minimum payment they are requesting so they wont agree to the DMP. The charity I am paying the DMP to tells me that I am just to ignore this and continue to make the payment to them each month and they will send the payment on regardless. The payment doesn't reach some of my creditors in time - just missing the due by date by one or two days some months and then they will receive two payments in the next payment month and because they haven't agreed to the DMP they are charging me £12 for a late payment every time this happens.
On the other hand, I have a creditor (a loan) who has accepted the DMP but who has put a DEFAULT status on my credit account because I am paying £43 less per month than I should do againt the original agreed repayment. This default will remain on the credit account for 6 years which means the thought of me ever getting into a position where I will get a 0% option from any CC provider in the next 6 years is zero...so I will never be able to switch these higher rate cards to anything cheaper and I am still paying interest and charges each time my payment via the DMP arrives a couple of days out of cilter with their due dates.
I have been paying the DMP for 14 months now and have paid £15,000 against the original debt of £48,000. I was advised this would be the best way forward for me. I am incurring £12 late fees like no-ones business and a Default on my credit report. Only 2 creditors have actually stopped the interest and charges accruing on my account so, I am not really any further forward than I would have been without a DMP.
I also now have limited options since my credit rating went from 900 (prior to DMP) to 450 (now) so I have nowhere to 'manage' my money off to a lower rate.
I have tried to explain all this to the DMP charity but I don't think I am making myself clear? They don't seem to suggest any solution and just keep telling me to pay them and not to worry?

Have I been given bad advice? Was a DMP the right way for me to go?

Hi Sophie, like most of the regulars on here, I'm pretty happy with my DMP, but I think it depends on your expectations.

I think your post says you are with a charity, so long as it's free that's probably ok. The idea that DMP providers free or otherwise is only partly true, since a DMP doesn't stop creditors messing with your head by 'rejecting' your offer and charging interest and fees, and your credit rating will bounce to the floor due to defaults or AP markers.

The good news is that if you decide a DMP isn't for you, you can get out of it, as it's a non binding agreement on both sides.

Reality is that if you dont keep your contractual payments to a creditor, they can default you. Defaults are ok and will disappear. From your credit file after 6 years, don't be afraid of a default, it usually means interest has stopped and the creditor acknowledges repayment of the debt is likely to be slow. The creditor might sell your debt to a DCA, or debt collector, again most will accept the DMP terms, the occasional one kicks off, but here is the key,

CREDITORS CAN'T GET WHAT YOU HAVEN'T GOT.

So what does that mean, well in practice, a creditor has to accept that you have reasonable outgoings, e.g. Mortgage and rent, council tax, utilities etc, and only after your priority debts are satisfied do the unsecured debts get a look in. If a creditor disagrees with this, they could take you to county court for a CCJ, but most debt advisors say this isn't worth their while, since courts also do an income and expenditure assessment and they could end up with less of a repayment plus a court bill. This is why DMP providers say just ignore the rejected offer letters and pay the assigned amount. You do also have to a bit of a thick skin to ignore phone calls and/or default letters that they have to send you by law.

How do you feel so far, still thinking you did the wrong thing? Is it making sense at all?

Oh and I forgot to say, just ask the creditors who are getting late payment to move the repayment date, or insist that they do, and then write and ask them to refund the charges which are clearly unreasonable and contrary to the lending code.

Sleepysophie

Thank you for your help. I am with Stepchange already. I don't pay for my DMP. But should I be paying these £12 late fees? I havent been because I don't have the extra money to pay them after I have paid the DMP payment so they are wracking up plus mad interest? Well, I say "mad" its not like a pay day loan interest amount but its mad compared to what I was used to before the DMP started.....?I will look back through previous posts but I did look for a similar situation to mine before adding the comment. Maybe need to look again...
Thanks

Sleepysophie

Sazzie23 this sounds good. I have already managed to change the payment date with one credit card who were great. The other is saying I need to pay the arrears before they can change the payment date so I am going to write it all down and send it off to them in a letter because sometimes I think it just depends who you get on the phone at the time you're asking. Hopefully a letter will get a better response.
I just sometimes wonder whether I should have done the DMP on my own so that I could have tried to manage it better but there is some security in telling the creditors that StepChange is dealing with your debts as they are so well known by all the creditors.
Thanks again for your comments. Feeling a little better now.

Sazzie23

Sleepysophie wrote: »

Sazzie23 this sounds good. I have already managed to change the payment date with one credit card who were great. The other is saying I need to pay the arrears before they can change the payment date so I am going to write it all down and send it off to them in a letter because sometimes I think it just depends who you get on the phone at the time you're asking. Hopefully a letter will get a better response.
I just sometimes wonder whether I should have done the DMP on my own so that I could have tried to manage it better but there is some security in telling the creditors that StepChange is dealing with your debts as they are so well known by all the creditors.
Thanks again for your comments. Feeling a little better now.

Have a good read through this thread, and number 9 and 10 if you get time. There are quite a few self managed, some of whom started off with SC. there are benefits of self managed and if you can be disciplined enough to do it properly it seems to work pretty well most of the time.
I stay with SC because I can't be trusted to do it on my own and having SC makes me behave , but being on a DMP has really changed my spending habits and hopefully when I am debt free I will be able to sustain debt freedom.
Main thing is now you are on the right road with writing to them to get the charges refunded. Don't rush it anything until you are happy with what to do.

Growurown

Sazzie23 wrote: »

I stay with SC because I can't be trusted to do it on my own and having SC makes me behave

I agree! I behaved a lot better when I was with SC, but we went self managed this time last year, and we haven't cleared OH's Halifax card debt as much as I would have liked. However circumstances at the time meant that self managed was going to be better for us, so I don't regret it.

My car goes in for it's MOT next week. I am concerned about getting a big bill to get it through. I've already had to buy four new tyres. Well I had that covered from my emergency fund. It's just that my last DMP payment goes out at the end of November and the last thing I want to do is to have to reduce it to pay for car repairs.:(

racht

Boldhoof wrote: »

Thanks to all for the responses.
Is there another free credit check we can use, given that Noodle is having some issues.

I've started using Clearscore which is another free one- this comes from Equifax. Glad I did as had incorrect financial connections which has now been sorted- the only thing I have noticed is I've been getting more spam emails and post offering credit cards etc since joining!!!!

blisteringblue

racht wrote: »

I've started using Clearscore which is another free one- this comes from Equifax. Glad I did as had incorrect financial connections which has now been sorted- the only thing I have noticed is I've been getting more spam emails and post offering credit cards etc since joining!!!!

Not suprising, no such thing as "free" anything these days. They will be making money from it.

racht

Sleepysophie wrote: »

Sazzie23 this sounds good. I have already managed to change the payment date with one credit card who were great. The other is saying I need to pay the arrears before they can change the payment date so I am going to write it all down and send it off to them in a letter because sometimes I think it just depends who you get on the phone at the time you're asking. Hopefully a letter will get a better response.
I just sometimes wonder whether I should have done the DMP on my own so that I could have tried to manage it better but there is some security in telling the creditors that StepChange is dealing with your debts as they are so well known by all the creditors.
Thanks again for your comments. Feeling a little better now.

Hi- it may be worth writing to some of your creditors asking for them to stop charges- you can find template/sample letters on National Debtline website and also ask them to change the payment date at the same time. I used one of the template letters to get Very to stop charging interest/fees when they were still charging at first.

blisteringblue

Oooh Signature update day and almost at 30% paid. Happy Days. 36 months and counting .....