Time to self manage DMP?

My_21k_Blooper

Hi, my first post here but I've lurked for a while before joining and now I have questions about moving from StepChange to a self managed DMP.

Quick backstory - due to various circumstances I accrued over £20k in credit card debt and despite not missing any payments , I made the decision in April of last year to go with a SC DMP to get my finances under control before the credit ran out completely.

Skip forward a year and a bit and I've never been happier .I am paying what I can afford and not worrying about money any more . I found all the creditors were very agreeable (most have now sold on to DCA's anyway) so had little to no stress with any calls or letters from them. DFD as it stands is about 13 years away, which I have no problem with due to the affordability of the payments monthly.

What it is though, is that I found myself a couple of months back getting a bit of a promotion in work and that has yielded me about another £200 a month. I've not updated the budget yet with SC to reflect this, but I find that this £200 is making things even more comfortable and stress free so I would basically like to not have to pay any more towards the debts at this time. I would rather live more comfortably than bring DFD any closer if that makes sense. Especially when there is no interest anymore on the payments.

I'm wondering, because SC will be asking me for my budget soon, is it better if I want to retain the identical payments to the creditors to end agreement with SC and then setup the same payments that I am already? SC were amazing and I would definitely not have been able to set it up myself with the ease that having them do it gave me, but I feel now that I'm dealing with DCA with online accounts it should be easy to self manage with the amount I want to pay.

I've read on this forum that SC insist on all creditors being equal but when you self manage there is far more flexibility. I've read that creditors don't really ask for these budgets its just something SC tend to do to make sure you can afford it

Any thoughts , advice? How did those who managed their own DMP find it?

Thanks!

Suseka97

HI there,

Sounds like you have things well under control here - so good for you.

I was with SC for a little over 4 years and have recently (last month) decided to self-manage the remainder of my DMP. Mainly, as you have said, it gives me the flexibility to pay things differently. In my case I want to lower my payments which have of late become unaffordable -well in my view (perhaps not others). I want to be able to 'live' rather than 'exist'.

Anyway, I think you'll find that creditors (and DCAs) do ask for Income and Expenditure budgets (some even go so far as to ask for proof of your salary - rather cheekily). So whilst self-managing is doable, it isn't necessarily as straightforward as you may imagine. With that said if you are in the right mind-set and ready to take it on yourself, I'd recommend you go for it.

If you hop over to the DMP mutual support thread -it's full to the rafters with lots of advice and experiences of people at different stages of their DMP (both managed and self-managed). It's a long thread (but well worth a read) - however you can search on the word 'self-managed' and it'll highlight some interesting posts.

There are a good few of us who have gone the SM route recently, January 2015 springs to mind, but there are others. It'll give you a taste of what we've encountered and it might help you decide one way or another.

Alternatively - you say you are quite happy with your current level of payment and are comfortable with the remaining term - yes. Well, when you complete your new budget, which you can do online, it's really up to you which entries you update. I know some may disagree with this, but you could consider just keeping those extra £s aside and save them up for a few F&Fs at some point. Just a thought - in my view its not dishonest, just stretching the truth and in the end the money will eventually go to the creditors.

Good luck with whatever route you choose next

Neo187

When I was on mine I found the same thing regarding having extra finance come in from work. What I did was though, was keep the budget the same (maybe increase a little each year), then when months when I could afford it, I targeted some of my smaller creditors and paid them off directly, then updated SC and said I now owed them nothing for that creditor and they updated their distribution payments as such. Felt good seeing the number of creditors come down and then focus on the main big ones.

Remember though, it does feel fantastic to be in control again and not worry about paying debts and people chasing you, but don’t get too conformable! You have a long journey ahead by the sounds of it, to be debt free. Months where you can, overpay and start reducing the debt. 13 years is very long time to self-manage debt. I wouldn’t recommend leaving SC now.

My_21k_Blooper

Thank you responses so far, it all makes sense and has given me a better idea of what I can do. I have no issues with staying with SC if I can keep things as they are so if that's possible I don't need to jump ship just yet.

I like the idea of eliminating the smaller debts like the last poster said, although I did query this with SC once - I had one creditor with £300 which I wanted to pay off , but they advised not to, saying it would be treating the other lenders unfairly to pay off one when they are not getting extra.

Although 13 years sounds a long time (or a long journey to DFD) I'm trying to think of it as a long term monthly bill. We're all gonna be paying bills all our life anyway (most of us) so an extra bill (or 3/4 smaller bills if I self manage eventually) to take care of debt doesn't sound that bad to me, and I am bound to increase payments eventually anyway.

Suseka97

I think that's for the best. As to paying off individual (smaller) creditors from time to time. If you ask SC you'll get the set response about treating all creditors fairly -which is their policy, fair enough. But what you can do is pay them and then just zero the balance on your SC account - honestly, they have so many folks on their books no-one is going to be scrutinising your DMP that closely. It all becomes quite automated after a while -so by zeroing that particular debt, all that happens is your payments to the remaining ones are readjusted.

You really do sound as if you've got the right mind-set and although you may be happy with the 13 year timeframe, if you did manage to squirrel away some money for F&Fs down the line, you'll be no worse off, that's for sure.

Some folks (again, myself included) have sent off CCA requests to creditors - a process by which they need to provide proof the debt is enforceable. Some have had responses saying the debts aren't and they've then offered quite low F&Fs (some in the region of a 90% discount). So that's more food for thought. Again on the DMP thread I mentioned earlier you'll read posts about that too.

Just to add - going down the CCA route, even if proved to be unenforceable, doesn't mean you don't owe. That latter just means the creditor or DCA couldn't take you to court over it. I've sent CCA requests to my remaining DCA owned ones - not because I think for one minute any will come back unenforceable (although that would be great) but because whilst they investigate they have to suspend collection activity. It can take them a while, so I'm using that time as breathing space and to save up some £s for those F&Fs.