Going independent - any advice!

The_Debt_Expert

Indeed, but that's not what was advocated here.

abby1234519

The_Debt_Expert wrote: »

Indeed, but that's not what was advocated here.

I know, I should have phrased it better - I meant that could be a solution if they did want to avoid the preferential treatment situation

sourcrates

abby1234519 wrote: »

I know, I should have phrased it better - I meant that could be a solution if they did want to avoid the preferential treatment situation

There are too schools of thought on the subject of DMP`s, the supported version through a charity such as stepchange, all well and good, but really for newbies who are not very savvy on the inner workings of the debt repayment process, then there is self managed, for people who have listened and learned through forums such as this one.

If you want to run a DMP yourself, you can choose to treat creditors however you want to.

If you want to overpay one account to clear it quicker, you can, or want to make final offers to accounts of your choice, you can.

That is the beauty of self management, you do not have to follow any of the restrictive guidelines stepchange, or others insist you adhere to.

And if creditors dont like it, all they do is sell the debt on to a DCA who wont care two hoots anyway, so you can treat them just the same as the original creditor, so for you its win win.

The_Debt_Expert

sourcrates wrote: »

If you want to run a DMP yourself, you can choose to treat creditors however you want to.

If you want to overpay one account to clear it quicker, you can, or want to make final offers to accounts of your choice, you can.

That is the beauty of self management, you do not have to follow any of the restrictive guidelines stepchange, or others insist you adhere to.

However, it's classed as preferential treatment, which can lead to other creditors being less helpful. And it doesn't clear off the debt any faster, so what's the point? The only arguable benefit I can think of is having less creditors, but if your plan is working fine anyway, so what?

sourcrates

The_Debt_Expert wrote: »

However, it's classed as preferential treatment, which can lead to other creditors being less helpful. And it doesn't clear off the debt any faster, so what's the point? The only arguable benefit I can think of is having less creditors, but if your plan is working fine anyway, so what?

Dont get me wrong, all the debt charities do a great job giving help to people who basically cant help themselves, but most are funded by the creditors, so have to "tow the company line" when offering advice, and in how they operate.

Sorry, i`ve never been a fan of following the rules and sticking to convention, i am 100% on the side of the debtor, the more knowledge you have about the actual debt collection and repayment process, and how it really works, the better.

You can then use this knowledge to your own benefit, you see creditors make enough money out of the punters with high interest credit cards and payday loans etc, i believe that when you get into trouble with your payments, its you who should call the shots, you who should be incharge of your own destiny, not any 3rd party subsidized by the creditors.

Its all about control and empowerment in the end, i believe its you who should tell the creditor how things are going to be, not the other way around.

I have read to many posts on this forum from people unable to afford to buy food, asking questions like this : "Do you think the creditor would mind if i missed my payment this month as i haven't any food in the house ?"

That's simply not acceptable !!

January2015

The_Debt_Expert wrote: »

However, it's classed as preferential treatment, which can lead to other creditors being less helpful. And it doesn't clear off the debt any faster, so what's the point? The only arguable benefit I can think of is having less creditors, but if your plan is working fine anyway, so what?

For some the psychological benefit of reducing the number of creditors is massive. It's not always about the total amount owed, but sometimes is about the number of creditors people feel they are being chased by. There are lots of reasons for managing debt payments differently to those recommended by debt charities.

For example, one of our debts was to a catalogue company. SC allocated them the pro-rata amount from our available budget as per their guidelines. However, if I didn't payment them the balance in full within 6 months of starting our DMP the catalogue company would have added several hundred pounds in buy now pay later (BNPL) interest. I therefore chose to prioritise this creditor by making separate payments as and when I could to clear this debt in full before the BNPL hit the account.

It's not always as clear cut as the rules debt charities impose on people. Those charities are great and I for one cannot thank StepChange enough for starting on the road to clearing our massive debt pile, and for teaching us to manage within a budget. However, once I was on the right road I soon learnt I needed to play the system and creditors to my advantage to suit my particular circumstances. That doesn't mean I am not going to clear my debts, it doesn't mean I will take longer than the forecast end date that StepChange gave me, it just means I control who gets what and when to ensure the best outcome for my family.

fatbelly

You only need to worry about preferential payments if you are going for an insolvency solution like a DRO or bankruptcy. If you are doing that then you do need to treat creditors equally. And the best way to do that is to pay none of them anything.

Anyway let's not be too harsh on Stepchange and Payplan - they are the least worst of the debt management companies. Everyone is influenced by how they are funded.

National_Debtline

Hi

There are some template letters for negotiating with creditors here, which you might find useful. You can reword them to fit your situation and offers.

www.nationaldebtline.org/EW/sampleletters/Pages/default.aspx

James
@natdebtline

abby1234519

The_Debt_Expert wrote: »

However, it's classed as preferential treatment, which can lead to other creditors being less helpful. And it doesn't clear off the debt any faster, so what's the point? The only arguable benefit I can think of is having less creditors, but if your plan is working fine anyway, so what?

Well look at it this way, I can make a settlement offer to the smallest creditor and hopefully be able to settle at 50%. So the first one would be £150 which I can pay out of my savings. I can then use the money I was paying to that creditor to put back into savings. The next debt is £600 so I'd like to be able to settle for £300 and so on and so on. A bit like a debt snowball

I couldn't afford to settle DS debts all at once, so I'd end up paying the whole 12k

Whereas this way, I can settle them one at a time and hopefully end up settling it for around 6k just by doing it in batches