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Consolidating debt

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A friend has recommended Payplan Plus.  She said it was a Government scheme.  It takes over your credit card debts (especially ones with expired interest-free deals) and discusses with you a payment plan, interest-free based on your needs both commitments and social.
She said she used them.and.is.now credit-card free.
Is this genuine or a scam?
Will it affect my good credit rating?
Thanks
Linda
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Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    If you don't repay your debts according to the agreement, you'll fall into default and it won't matter what credit rating you have. 

    PayPlan just provides advice with how to manage your debts, It doesn't take them over or pay them for you.

    Visit the DFW boards for advice on your debts as a whole. Defaulting may have been the right solution for your friend, but you might have other needs.
  • Linsomer
    Linsomer Posts: 25 Forumite
    Third Anniversary 10 Posts
    Thanks for getting back so quickly but confused by your reply.
    They did take over my friend's credit cards and paid off the balances.  She then paid them an agreed amount, interest and fee free, each month and thus, without interest of around 21%, was able to discharge her debts more quickly.
    Of course now she is inundated with credit card offers but with no monthly payments, can now save and therefore has no need for a credit card.
    I should say that we are both pensioners, don't own our own homes but still have very high credit scores.
    Does anyone else have a similar experience.of this company which stat snit is a government approved scheme?
  • Have you done your due dilligence on Payplan Plus? 
  • Linsomer
    Linsomer Posts: 25 Forumite
    Third Anniversary 10 Posts
    I shall do that but wanted to know whether other forumites had used them
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 1 June 2022 at 12:49PM
    Linsomer said:
    Thanks for getting back so quickly but confused by your reply.
    They did take over my friend's credit cards and paid off the balances.  She then paid them an agreed amount, interest and fee free, each month and thus, without interest of around 21%, was able to discharge her debts more quickly.
    They don't 'take' over' your debt. They just help you manage them.. They're still your debts and you still need to make payments towards them, even if that means giving PayPlan the money to distribute it for you.

    Your high credit scores don't matter. Once you default on debts, your credit worthiness is in the toilet. So you need to establish if your credit worthiness is important to you or not. It may not be, especially if you're not a home owner so can't have a charge put against your property or have remortgage concerns
  • Linsomer
    Linsomer Posts: 25 Forumite
    Third Anniversary 10 Posts
    I wouldn't be defaulting.
    My friend's experience, once she had agreed monthly amount with Payplan, her credit card statements then showed 0 balance.
    This is not a default, but cards paid off in full
  • impoverishedtraveller
    impoverishedtraveller Posts: 81 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    edited 1 June 2022 at 1:53PM
    You really don’t seem to be grasping what the scheme is.

    You can’t pay lower than your minimum payments on your credit agreements and keep a good credit history.

    Your friend may indeed have used payplan and now be debt free, but this comes at the expense of a trashed credit history.

    You can’t have your cake and eat it.
  • Brie
    Brie Posts: 14,477 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Might be a good idea to give some details about the debts you are trying to deal with so that we can give some specific advice.  But as per a previous poster that might be best on the debt board as you'll get some focused advice.
    I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards.  If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

    "Never retract, never explain, never apologise; get things done and let them howl.”  Nellie McClung
    ⭐️🏅😇
  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Must admit I've never heard of this company, but from what I've been able to find online they are a (kosher, I'm sure), debt management company, helping you sort out payment plans, DMPs, IVAs, whatever.  These type of arrangements are not at all uncommon, but will trash your credit record.
    Linsomer said:
    I wouldn't be defaulting.
    My friend's experience, once she had agreed monthly amount with Payplan, her credit card statements then showed 0 balance.
    This is not a default, but cards paid off in full
    This is the bit I'm struggling with.  If I understand what you're saying, your friend had credit card debts, arranged to make a monthly payment to Payplan, then her credit cards were immediately cleared?  Doesn't make sense.  The only two ways I can see this happening are (a) Payplan persuaded the card companies to write off the debts - unlikely, I would imagine, and would trash your credit record if it did happen.  Or (b), Payplan themselves paid off all the cards for your friend, then she repays them in instalments.  I suppose this could happen, but what incentive is there for Payplan to effectively give your friend an interest-free loan?
    I guess a sensible first port of call would be to check out the company.  Ask your friend for the contact details/website, and check them out.  Be very wary of fake copy-cat websites.  Check that they are, at an absolute minimum, properly registered on Companies House, the FCA and the ICO.  Once you're happy that the company is at least properly registered, and that you're looking at their genuine website, read - very thoroughly and carefully - their terms & conditions.  That should allow you to make a more informed decision.
  • Linsomer
    Linsomer Posts: 25 Forumite
    Third Anniversary 10 Posts
    I'm not in debt, just my 0% balance transfer deal on 1 card coming to an end and other one already finished. Im trying to avoid paying high interest rates
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