To DMP or not to DMP?

January2015

gettingtheresometime wrote: »

I still have some way to go but I can see a glimmer of light of a very long tunnel.

Most of my debt has been repaid on an informal dmp plan with the various creditors...without this I think I would have sunk without a trace years ago.

I may be wrong with this but do you have to default on your debts before a dmp can be set up? After all what incentive is there for the creditor to accept the dmp? Will trash your credit rating but I guess you wont be rushing to get more debt any time soon

You don't have to default debts before setting up a DMP.

Credits subscribe to The Lending Code. Where customers evidence financial difficulties they {usually} try to support customers - some freeze interest, some don't. Creditors will require an income/expenditure statement as the evidence. Going through Stepchange - we supplied it to them and they did the liaison with the creditors. Even if creditors don't accept the DMP payment offer (which some say they don't) Stepchange just keep paying them and there is little they can do. If they take you to court the court is likely to agree with Stepchange you are making the best and most realistic payment you can afford. Hence creditors rarely seem to take people on DMP plans to court.

whattodo1967

Hi I can honestly say it is the best thing we did, had similar levels of debt when we began our journey. We didn't really have any issues with creditors all accepted our plan and stopped interest and we actually now have the money to live. Obviously you cant get anymore credit, but for us that was a good thing. Just make sure you give yourself some flexibility in your budget. Good luck on your journey.

officerdibble

Best Thing I ever did:) In 2009 I owed about £18,000 to various loans, overdrafts and credit cards. continually robbing Peter to pay Paul. It took a massive weight off my shoulders although it was initially quite daunting. I now owe £360 and over time its totally changed the way i look at money, as I've had to save up for things rather than stick them on the credit card. Its surprising the amount of extra cash you have doing it this way.

Puzzcat

Hi,
Another massive dmp fan here! I started 2 years ago owing £60k:eek:
Now I am down to a slightly smaller massive £45k:D. Obviously your credit rating gets shot to pieces but that is the price we pay. I also hadn't defaulted on any of my debts pre starting a dmp and I don't feel guilty as I have paid a MASSIVE amount of interest over the past 20 years and will pay the remaining 45k in full hopefully within the next 5-6 years.
Tips...
Find the dmp mutual support thread and get reading!
The lower the payments the more chance of the creditor freezing interest and defaulting the debt, once defaulted it will fall off your credit file 6 years from default date rather than being marked arrangement to pay/dmp stays 6 years after being paid off.
Emergency fund and wriggle room are essential, children are expensive!!!
Budget...
I love my dmp, although I won't miss it when it is finished:rotfl:
Puzz.x

glentoran99

One thing I would change if I ever had to do it over again would be not pay them a penny until they default me, thus building up an emergency fund, and starts the process of credit rebuilding a lot quicker, if you pay them too much it can drag on the damage for a lot longer

dumpyboy

glentoran99 wrote: »

One thing I would change if I ever had to do it over again would be not pay them a penny until they default me, thus building up an emergency fund, and starts the process of credit rebuilding a lot quicker, if you pay them too much it can drag on the damage for a lot longer

Totally agree with this started in 2007 owning 78000 after a fail relationship co habintateing now owe around 3000 , the worst effect is from a creditor that did not freeze the interest for 4 years in to never defaulted and to this day report arrears they the accounts where paid in full, if I had to do it again they would not get w penny till defaulted and interest frozen

National_Debtline

Hi Dizzig


Lots of positive feedback from other posters here, and from a debt advice perspective there are lots of reasons a DMP might make sense in your particular circumstances. As it is an informal solution, it does allow wiggle room in the event of unforeseen circumstances.


Of course creditors can still threaten and take court action etc., but on the whole this is relatively uncommon if you have a reputable organisation like Stepchange involved.


Good luck whatever choices you make.


Dennis
@natdebtline

DebtSlave

glentoran99 wrote: »

One thing I would change if I ever had to do it over again would be not pay them a penny until they default me, thus building up an emergency fund, and starts the process of credit rebuilding a lot quicker, if you pay them too much it can drag on the damage for a lot longer

I agree with this too. I've been in a DMP since 2008 (got four months left) but I have really struggled at times as I had no emergency funds. I wish I had found this forum BEFORE I started the DMP as at the time I was very scared and thought the creditors held a lot more power than they actually did. If I'd realised it was actually me that had control I would have stopped paying and let them default me much sooner and built myself an emergency fund. That said, it was the best thing I ever did and I will be eternally grateful to Payplan for saving me! Good luck on your journey

teekay_tk

I am DMP one year in and it has given me a lot of peace of mind. I will warn you though, and I didn't release to begin with and no one mentioned this to me either when I was going DMP. If you are renting, and hope to move while on DMP then you will have massive problem as DMP most likely will cause defaults on your accounts. A bad credit history with defaults makes is difficult to rent again through agents, although you can rent privately. The area of leads where I live does not have many nice privately advertised accounts so was problem for me. I was lucky a friend was letting out their house and I rented it from them without needing a credit check. Though, this house is a bit small for our family.