debt management plans, pros&cons?

nlewis1975

Hi there, Iam new to all this but need advice about my money.
Iam currently in debt of £21'000 spread across personal loans, credit cards and an overdraft. Looked into getting a IVA but was advised about going for a debt management plan. I have been reading some horror stories in this forum about DMP. CCJs being issued, banks still after your money, trouble with getting a mortgage, it all sounds awful.
Anyone help me as I really need to know more about DMP are they anygood?
Cheers Nick

Jacks_xxx

:wave: Hiya Nick,

You might get more help and info on the DMP support thread.

http://forums.moneysavingexpert.com/showthread.html?t=454457&page=107

We're doing our own DMP, but we found CCCS ever so helpful when we started out.

http://www.cccs.co.uk/

Welcome to the gang! :beer:

Loe Jacks xxx

Snaggles

The main thing to be aware of with a DMP is that you probably wont be making the minimum payment agreed (because if you could meet all your minimum payments with no problems, you probably wouldn't need a dmp). Therefore, you are technically defaulting on the credit agreements, so it can be a bit of a bumpy ride at first, and you will most likely get letters and phone calls from your creditors (there's a letter you can send to request all contact to be in writing if they start harrassing you by phone though).

It WILL affect your credit rating, a default stays in place for 6 years, and it WILL make it more difficult (but not impossible) to get a mortgage and you might pay over the odds because you will be classed, rightly or wrongly, as a higher risk.

So that's the bad stuff. And remember, if you are unable to make the minimum repayments, all of that will happen anyway, whether or not you are in a DMP.

The good stuff is mainly that someone (ie the CCCS or Payplan) is on your side, negotiating with creditors on your behalf and giving you practical advice. And also, providing you stick to it, they give you a clear path to getting out of debt, with a realistic timescale, although for that period of time, you will have little in the way of disposeable income.

Someone else who has been through it might be able to point out more of the pros and cons, but that's the basics!

Whatever you decide to do, good luck, and if we can help at all, just give us a shout, or post your soa, and we will give you as much support/advice as possible.