so do I go the stepchange way or go it alone?

traceydc49

You've definitely done the right thing! As crazycatlady said, you'll be very glad you did, it'll take away the worry, in the very near future you will have your light at the end of the tunnel.

andyfromotley

You could easily have done this yourself, sourcrates often posts about this. However, relax, you have made a good decision. Stepchange seem to do an excellent job and take a kot of the hassle out of the process. If you later change your mind its no biggie.

So dont panic, you made a good move.

January2015

andyfromotley wrote: »

You could easily have done this yourself, sourcrates often posts about this.

As someone fairly new to DMP land - I can see the pro's and con's of self managing a DMP.

For me - going down the Stepchange route helped placate my husband that this was a genuinely acceptable route for people with debts. It also meant we had to be disciplined with the budget because someone else (SC) was looking at it.

Ten months down the line - we are managing well. We have hiccups with car problems but then who doesn't have something crop up.

We have already thought about moving to self managed sometime next year. We want at least the first year with SC to learn discipline with our finances. Clearly we have never learnt discipline otherwise we wouldn't be in the mess we are in.

So yes - it can be done yourself, but you must be honest with youself and decide whether you will 'manage' your money on your own DMP from day 1. I suspect starting with a recognised support structure such as SC is going to be better for most people who have run up debts and then as they learn to manage their money THEN they can safely move to self managed DMP land.

backwherewestarted - well done for taking the plunge - seriously the best thing we ever did :beer:

backwherewestarted

I was quite happy to take a loan with one payment so Im hoping this will work in much the same way! I think my biggest worry is if they don't stop the interest and £99 a month is not gonna make much dent in anything! we ll see what occurs its too late now so guess what will be will be!! eeek!

*remember why I came here all those years ago gives me the sounding board I need when no one around me takes me seriously * xx

black_cat

We sought advice from Step Change who recommended that we did the DMP ourselves. We received a pack of information from them and off we went! The worst bit is the phone calls. For a while we only answered calls from numbers we recognised and sent letters to the companies reminding them that we would only communicate in writing, as was our right.

Keep posting and reading on MSE. It was the information and support on here that gave us confidence in the early days. After a while the phone calls stopped - now it's just those wretched PPI companies!

All the best for your DF journey and supporting your parents

canuckinuk

Hi


What are the benefits of doing a DMP yourself instead of going through Stepchange?

backwherewestarted

yeah thats what I keep wondering? thats what gave me a lot of doubts when I kept reading people say they did it themselves rather than Stepchange when at first I thought having someone else deal with it would have been easier! I think thats whats giving me misgivings as Im not sure why some say opt out when you feel able!

Puzzcat

The only real difference is being able to quote a stepchange reference number which most creditors take notice of. I have been in a dmp with sc since 2013 and can't rate them highly enough. But you will still receive calls and have to complain about interest etc, sc don't do that for you.
Puzz

January2015

backwherewestarted wrote: »

yeah thats what I keep wondering? thats what gave me a lot of doubts when I kept reading people say they did it themselves rather than Stepchange when at first I thought having someone else deal with it would have been easier! I think thats whats giving me misgivings as Im not sure why some say opt out when you feel able!

Some people opt to self-manage their DMP because it gives them to option to manipulate the level of payments to individual creditors.

For example Barclaycard are notorious for not zeroing interest and not defaulting. It seems the only way to force their hand is to maintain £1 token payments. This is well below their required level of minimum 1% of the outstanding balance (the level at which they seem to advise they will continue charging interest), and the level at which they will within a few months default the account. Barclaycard have reduced interest for us to 3% but it would be better if it was zero

Stepchange (and other DMP charities/companies) insist on treating all creditors fairly and according to their formula for calculating payments.

If you are young enough to think you may want credit again in the future it's important to get those defaults as quickly as possible as they drop off your credit file after 6 years. For me - I am looking at retirement when my DMP finishes and obtaining credit again is not something I anticipate needing or wanting. However Barclaycard mark my credit file with AP (arrangement to pay). This will stay on my file until the debt is finished and then six years after that. So in my case another 8 years to end of DMP, plus 6 years on credit file = 14 years for a poor credit payment record on my credit file from Barclaycard. The AP marker sits against the payment history part of the record; once the account is cleared it will show as settled, but the AP markers are there on the payment history if creditors want to look for the full 14 years explained above. However, if they would default me it would be gone in 6 years.

Another reason some people choose to self manage is that they can pay creditors slightly less and build up a saving fund so that when they have a sufficient lump sum they can offer one or more creditors a full and final settlement of the debt. They seem to start negotiating at 30% of the debt (or thereabouts) and sometimes have been successful in negotiating discounts of up to 70% of the debt - many people on this forum do report they have achieved significant reductions by offering a lump sum.

We've only been on a DMP since March this year and already one creditor has written and offered 25% discount to clear the debt in full. I don't have the funds, but perhaps if I had been self managed from the start and had this knowledge I could have saved some money and perhaps been in a position to negotiate a higher discount.

Hope all this makes sense.

Sazzie23

backwherewestarted wrote: »

yeah thats what I keep wondering? thats what gave me a lot of doubts when I kept reading people say they did it themselves rather than Stepchange when at first I thought having someone else deal with it would have been easier! I think thats whats giving me misgivings as Im not sure why some say opt out when you feel able!

I've been with SC for nearly 3 years now, and my debt is still going down.
Benefit of SC for me is that it's only one payment to make and budget for, that I know SC will chuck me off if I mess up and that gives me the discipline I need to stick to budget.

I am thinking of going it alone, but that is when my available income goes up a bit and maybe I will need to manipulate my payments to keep the interest off.

Thing is you see I was paying about 70% of my contracted payment to 2 of my 6 creditors, but this meant they were still charging me interest, albeit not the walking 29.9% it had got to pre DMP, however for some debts it would still take me 130years to repay at the rate i started at. Due to some rather unpleasant circumstances my income was reduced and I could barely make the minimum £5 per creditor, but the good side of that was that all interest is currently at 0 and now I have increased payments slightly, I am making nearly a the same impact on my debts as I was when the payment was much higher but with interest.

SC follow a formula, and if you have to deviate from the formula, then probably self managed is the way to go, many in the DMP support thread recommend NEDCAB guided self managed, but I'd suggest, start with SC, then have a look at managing it yourself after a few months when you know what works and what doesn't.

P.s. Prepare yourself for some grim looking letters from creditors, most times they are automated and don't take into account you are on a DMP, if you call creditors they'll usually say it's fine, we know you are DMP just ignore them.