Step Change, DMP & debt collectors

Feral_Moon

If you have a DMP plan with Step Change, is it normal for them to be paying a portion of your monthly payment to a debt collector rather than just creditors?

Someone I know is on a DMP and has just received a letter from Lowells debt collectors offering an early settlement if they immediately pay 50% of their total debt to them. My first response was to bin the letter and have no contact whatsoever, but I'm told that Step Change have been paying them on their behalf via their DMP.

Surely this can't be right?

glentoran99

If they have 50% and want to settle then they should go for it, could even negotiate a better discount


The creditor has sold the debt to the debt collector so that's who gets paid through the DMP

Feral_Moon

glentoran99 wrote: »

If they have 50% and want to settle then they should go for it, could even negotiate a better discount


The creditor has sold the debt to the debt collector so that's who gets paid through the DMP

Well a) they can't afford to pay the 50% otherwise if they could they wouldn't be on a DMP;

And b) surely Step Change wouldn't allow them to favour one creditor over another by paying them off outside of the DMP?

glentoran99

Feral_Moon wrote: »

Well a) they can't afford to pay the 50% otherwise if they could they wouldn't be on a DMP;

And b) surely Step Change wouldn't allow them to favour one creditor over another by paying them off outside of the DMP?

a) no need for the sarcasm, its possible that someone could have the cash for a low settlement, gift, inheritance, creative dmp budgeting, etc etc


A dmp in its very nature is flexible and you can do it if you want, If they could get the 50% (or bigger discount) they just inform stepchange to remove them, all the other creditors then get more,

fatbelly

Feral_Moon wrote: »

If you have a DMP plan with Step Change, is it normal for them to be paying a portion of your monthly payment to a debt collector rather than just creditors?

Someone I know is on a DMP and has just received a letter from Lowells debt collectors offering an early settlement if they immediately pay 50% of their total debt to them. My first response was to bin the letter and have no contact whatsoever, but I'm told that Step Change have been paying them on their behalf via their DMP.

Surely this can't be right?

Lowell are a debt buyer, not a collector. They will be the correct organisation to pay.

Two thoughts come to mind:

If Lowell are offering 50% settlement they would actually settle for less.

If Lowell are offering 50% settlement there could be something dodgy about the debt. Maybe it is unenforceable. Or the dmp is unrealistically long, like 10 or 20 years.

sourcrates

Feral_Moon wrote: »

If you have a DMP plan with Step Change, is it normal for them to be paying a portion of your monthly payment to a debt collector rather than just creditors?

Someone I know is on a DMP and has just received a letter from Lowells debt collectors offering an early settlement if they immediately pay 50% of their total debt to them. My first response was to bin the letter and have no contact whatsoever, but I'm told that Step Change have been paying them on their behalf via their DMP.

Surely this can't be right?

More often than not original creditors choose to cut there losses and sell on delinquent debts, as said, Lowell are a specialist debt buyer, when they buy these accounts, they then become the creditor.

They are after a quick turnover, hence the offer, in reality, they will of paid very little for the account, so as Fatbelly says, would more than likley settle for between 30/40%.

Your freind may want to send a CCA request to Lowell, see what responce they get to that.

Feral_Moon

sourcrates wrote: »

More often than not original creditors choose to cut there losses and sell on delinquent debts, as said, Lowell are a specialist debt buyer, when they buy these accounts, they then become the creditor.

They are after a quick turnover, hence the offer, in reality, they will of paid very little for the account, so as Fatbelly says, would more than likley settle for between 30/40%.

Your freind may want to send a CCA request to Lowell, see what responce they get to that.

Thanks, I'll pass on the info :beer: