DMP Mutual Support Thread - Part 12

BeingDebtFreeStartsHere

So......

Customer questionnaires filled in and sent to MBNA for PPI reclaim on two credit cards and one loan.
Letter written to the Co-op to challenge the lack of default on our loan account - will post recorded delivery tomorrow.

Hoping for positive outcomes from both letters!!! Will keep you posted

Take care,

BDFSH x

motivated

Torheb wrote: »

Hi we've contacted SC this week to talk through our options and they think a DMP is or best way forward. We owe £40k and they said we could be debt free in 4 years if all our creditors freeze interest and charges - does I've read through a few of the forums and people seem to have had problems with NatWest and barclaycard but these are the 2 main sources of our debt so I'm worried that if neither freeze interest we'll never be debt free - does anyone have any experience with these companies? Also we have a car in lease purchase due to end next Feb - we will definitely owe excess mileage but what will happen with this charge? I'm really worried about starting the whole thing off it seems so daunting and the thought of all the letters from creditors is making me feel ill before we've even started - is it not as bad as I'm imagining? I know this is our only option really but just was hoping to be as prepared as possible for any negatives - thanks

Hi Torheb

I have just started my DMP journey and can honestly say if you follow the advice from the people on here you will be ok.

I have/had 2 Credit Cards with Barclaycard one with a high balance and a smaller one. I had never missed a payment or been late with a payment.
I contacted them through the online messaging service through our accounts and explained our financial difficulties and that I was in contact with Step Change. I requested they freeze all interest and charges. They were great. Replied within a couple of days saying all interest and charges stopped for the 30 day period which will give us time to work with SC.

I explained that in future they should only contact me via written letter and they accepted this also.

I have not had 1 phone call from creditors (yet) and our DMP is all set up and ready to go starting this week.
MBNA have been exactly the same for us so don't panic.

After a week or so Barclaycard wrote to us again and said all interest and charges stopped from now on :T

MBNA too we've not had one phone call from them. I cannot comment on NatWest I'm afraid.

Even setting up our DMP was easy I sent them screenshots of wage slips and just emailed them creditors account numbers and balances etc. All was so easy I wish I had done it sooner.

good luck
M

January2015

Hi Torheb

I can second what motivated has put in the post above.

Barclaycard can be difficult but as long as your monthly payment is less than 1% of the outstanding balance there policy is not to add interest and charges. They are very strict on this - we were payment 1.03% (Stepchange calculated that figure) and because of the 0.03% that wacked on interest every month. It meant that a chunk of our payment was going to interest and not clearing the debt. To get round the interest and to force a default from BC we went self managed and eventually stopped paying them anything until they defaulted. We also put in a complaint and got all the interest and charges refunded. It's a pain when things like this happen but see them as a challenge and you will {strangely} begin to enjoy such challenges :rotfl:

Definitely contact all creditors in writing and notify them you do not give them permission to contact you by phone and all correspondence regarding the account must be in writing. As long as you don't ignore them then creditors will honour this request.

Gnats Vest stopped all interest and charged immediately for us. They have been excellent all through the DMP. It is only very recently (2 years in) that they have passed the handling of the account to a debt collection agency (DCA). Gnats Vest still own the debt and I still pay Gnats Vest, but all communication is through the DCA. Weird - buts that's how it works.

I should think you would be able to add the excess mileage charge to your DMP when it crops up - it is a debt after all.

In all honesty, there have been no negatives for me since entering a DMP. I sleep better, my marriage is better (because we are both less stressed about money), and we budget for everything. We have savings for car breakdown, appliance breakdown, dentist, optician, etc....all those categories Stepchange allow you to alloccate funds for - we regularly transfer those amounts to our savings.

All creditors have been absolutely fine - even BC were fine, we just didnt agree with their policy, but they were always polite in letters (we did everything by letter/email). DCA's are actually easier to deal with than original creditors in my opinion - they know about DMPs (well more than call centre operatives at creditors).

The best piece of advice I can give anyone entering a DMP is keep visiting this forum - and in particular this thread - and keep posting and chatting. The motivation to keep going and pay down your debts is amazing. We are just over 2 years in and time has flown by so quickly. It hasn't been a drag or a burden. Get your budget right - don't make things so tight you can't have the odd treat. If you try to pay so much to your debts that you are living in poverty you are likely to fail the DMP.

Welcome to the thread by the way :wave:

January2015

BeingDebtFreeStartsHere wrote: »

So......

Customer questionnaires filled in and sent to MBNA for PPI reclaim on two credit cards and one loan.
Letter written to the Co-op to challenge the lack of default on our loan account - will post recorded delivery tomorrow.

Hoping for positive outcomes from both letters!!! Will keep you posted

Take care,

BDFSH x

Oh BDFSH.....I am doing a happy dance for you already re. the PPI claims.....way to go :j:j:j Keep us updated:beer:

Good luck with the default letter - fingers tightly crossed here in January household

Suseka97

motivated wrote: »

Hi Torheb
......After a week or so Barclaycard wrote to us again and said all interest and charges stopped from now on :T
M

Great news and good luck with your DMP journey.

Just one word of advice re Barclaycard, do keep an eye on the payments to them as your DMP changes over time. BC stopped interest on our debts until, after a year or so, the DMP payment to them went over what would have been the standard minimum payment and then they reintroduced interest. We had to push hard until they finally defaulted the debt and the DCA they transferred the account to stopped interest again. It took about 9 months or so for that to happen - so not a massive deal in terms of interest paid, but just keep an eye on them.

January2015

feelsbadman wrote: »

HI,

I have around 35000 in debt and paying around 700pm is quite frankly unsustainable I haven't missed any payments but doom is impending I am pretty much using cards for general things like petrol now. I have some questions I would like to ask before I begin the DMP process.

Will they take 100% of my disposable income after the budget is complete or do they leave me some sort of buffer?

Has anyone put car costs in relating to MOTS and services etc? I seen a guide that says 25pm but my service plan alone is 30pm and I drive around 15000 miles per year to get to work so naturally I believe there will be repair and replacement tyres etc

My concern is that these plans take all of your disposal income and leave little room for any financial shocks.

Can anyone give me an idea of what the structure of such plans are and what they allow?

feelsbadman wrote: »

Hi,

I understand this general principle I meant more do people budget for repairs for cars etc

so if your bills total 1100 and you earn 1500 they will want the full 400?

If you want to see what debt management plan (DMP) figures would look like for you without going to a DMP provider such as Stepchange or Payplan, then you can go to NEDCAB DMP and enter your own situation, e.g. income and expenditure, and it will calculate how much you can afford to pay each creditor. NEDCAB DMP doesn't send your information to any support advisers, nor to creditors....it's just there for people who want to self manage their own DMP - but you could go on and see what the figures look like for your situation and nothing will happen if you don't want to continue with a DMP.

How it works is something like this.

(A) How much do you have coming in
(B) How much must you pay for priority expenses (things like mortage, rent, council tax, utilities, etc.
(C) How much do you need for living costs, e.g. groceries, dentisit, optician, car repairs, etc. etc.

They then use the formula (A) - (B) - (C) = (D)

(D) is what's left to be shared amongst your unsecured creditors

Creditors can't have what you don't have. They can only have a share of what's left after (B) and (C) have been accounted for. Car maintenance is included in (C).

NEDCAB, Stepchange - all DMP providers - have a list of expenses that people are likely to incur. There are upper limits for what is considered reasonabe for each expense. When completing the online forms if you put in too high a figure a message pops up to let you know. Even if the figure needs to be higher than the box thinks is reasonable as long as you can justify why it's high then that's acceptable. For instance maybe vehicle fuel is high because driving is part of your job.

However, I am a bit confused.....in your example where bills total £1,100 and you earn £1,500 - why would you be considering a DMP? In that scenario you can afford the minimum payments for all your debts and a DMP wouldn't be recommended.

I would understand if your income was £1,100 and your bills £1,500.

January2015

Suseka97 wrote: »

Great news and good luck with your DMP journey.

Just one word of advice re Barclaycard, do keep an eye on the payments to them as your DMP changes over time. BC stopped interest on our debts until, after a year or so, the DMP payment to them went over what would have been the standard minimum payment and then they reintroduced interest. We had to push hard until they finally defaulted the debt and the DCA they transferred the account to stopped interest again. It took about 9 months or so for that to happen - so not a massive deal in terms of interest paid, but just keep an eye on them.

Suseska97

BC did that to us and we did the token payment thing for a few months and then no payments. We also wrote to them and asked for all interest and charges to be refunded back to the date of the start of our DMP. They did that....reducing the balance owed. It was several hundred pounds for us. May be worth thinking about asking for this if you haven't asked already.

motivated

Suseka97 wrote: »

Great news and good luck with your DMP journey.

Just one word of advice re Barclaycard, do keep an eye on the payments to them as your DMP changes over time. BC stopped interest on our debts until, after a year or so, the DMP payment to them went over what would have been the standard minimum payment and then they reintroduced interest. We had to push hard until they finally defaulted the debt and the DCA they transferred the account to stopped interest again. It took about 9 months or so for that to happen - so not a massive deal in terms of interest paid, but just keep an eye on them.

Thanks for the heads up Suseka I will definitely be looking out for this one
M

Suseka97

January2015 wrote: »

Suseska97

BC did that to us and we did the token payment thing for a few months and then no payments. We also wrote to them and asked for all interest and charges to be refunded back to the date of the start of our DMP. They did that....reducing the balance owed. It was several hundred pounds for us. May be worth thinking about asking for this if you haven't asked already.

We weren't able to drop to token payments because it was (is) an SC managed DMP, not 'self-managed'. I must admit I was close to considering going self-managed, but then BC handed the debt over to a DCA. Given we are now in our final year, I'm fine to continue the way things are... it's been tough because our monthly payments are high -but if I had my time again I think I would bite the bullet and go it alone. Whilst I really appreciate all that SC did at the outset, the fact is they do not really intervene with interest and charges and having so many DMPers on their books, they really don't have the resources to do more than set the thing up and apportion payments to creditors. I do admire those on here who have gone 'self-managed' -but to me it was just a step too far at the time.

Billy12345

Morning all

Stupid question but hey ho I'm full of them today.

When an account is defaulted (BC actually defaulted I'm excited :-)) does interest automatically stop. I owe a little under £10k to BC and they stopped and backdated interest in November but the amount I'm paying to SC isnt reflected by their balances on Noddle.