Moving DMP provider and the gap between payments.

SpicyTomato

Hi, 

In November of last year, sadly before finding this forum, I took out a DMP with a company who charge a £50 monthly fee. They have been helpful, but since understanding I could have set one up for free, I'd want for that fee to go toward my debt. 

Whilst arranging a DMP has been the best thing I've done for myself, I jumped in without waiting for any defaults or allowing a small emergency fund to accumulate and have had a few sticky situations arise since (unexpected car fault, dentist etc), made it through, but possibly made things a little harder on myself than could have been.

Since reading this forum and contacting stepchange, I'm keen to end my current fee-charging DMP and arrange one with StepChange. I've got my account set up, just a case of hitting 'go' at the right time. 

I've let my creditors know I'm ending my current dmp and I'm arranging a new one via stepchange just to avoid any crossover/confusion between the plans. 

Several of my debts have not yet defaulted, I believe only 1 of 8 has in 7 months.

What I'd like to do is end my current DMP. Sit for 3 months, save a small emergency fund, see if any of my debts default and then get going with the DMP via StepChange. 

Through people's experience and understanding of DMPs here, does this seem reasonable? Can I expect any big issues with my current creditors doing this? Or any issues setting up the new DMP with stepchange? 

Last thing I want to do is rock the boat when my intention is to make things better for myself and actually pay off more toward my debt. 

Any advice or thoughts appreciated.

Thank you in advance  

fatbelly

Yes that seems a good plan.

Given the reticence of many creditors to issue defaults, you may have to wait more than 3 months.

That gives you time to build up a bigger fund. Think of it as a fighting fund, from which one day you may be able to offer a settlement deal

Rob5342

I'd manage it myself to be honest, then you can start paying the defaulted one now and start paying the others as they default. Stepchange just make the whole process a lot more difficult.

sourcrates

Sit as long as you need too, let your accounts get sold on, and hopefully defaulted, get that emergency/settlement fund looking a bit more healthy.

In the vast majority of cases, collection activity will re-start, and you`ll get a few calls/letters etc asking you to call them, nothing to worry about.

Give it a few months and see who`s writing to you, bin off the leeches straight away, in fact I`d be tempted to lodge a formal complaint with them about the fee`s they have charged you, did they tell you free plans were available? 

They should have done so, companies like that just profit from your misery, I detest them.

SpicyTomato

Thanks all for the replies. I'll sit tight and see what communications come my way.

Barclaycard is one that has defaulted, but it disappeared from their online banking last month following the notice of default - so I'm not sure what's happening with it. I'm anticipating I'll get a letter eventually with further information or payment request.

I've now given notice to my current DMP provider. They didn't advise me that there was free options available and I only researched because I'd become irritated with their poor communication once i'd settled into the DMP (very helpful at first, not so much later on) and lack of updates. When I then initially approached them about moving to a free dmp provider anout 6 weeks ago, they put me off citing issues with the free services and that I'm free to try another company but might have a job on my hands getting the creditors to accept a DMP again. Whilst I'm not sure if there's any truth in creditors not considering another DMP, it sounds like people move to self managed frequently and are successful in agreeing payments so I don't see why using another provider would hinder me & so feel it was a scare tactic to remain at this point.

I've also read a lot on this forum the last 2 weeks so I'm feeling more confident in my choice to move. I'll look into to raising an official complaint. 

Thanks again for your help. 

Rob5342

The Barclaycard has probably been sold, I expect you'll get a letter from whoever they sold it too soon, mosrly likely PRA.

The DMP company is just trying to scare you to try and squeeze even more money out of you. With DMPs you just tell the creditor what they'll be getting and they can either like it or lump it, that's all that DMP companies do.

sourcrates

They don`t want to lose their source of income, so they will say anything to retain you, lenders take whatever you pay them, if they don`t like it, they sell the debt on and it becomes someone else's problem.

Payments are decided by your available budget, nothing more, no matter who sets up the DMP, the criteria is just the same, an offer of payment is made, backed up by a copy of your budget, same process no matter who does it.

pmartin86

SpicyTomato said:

they put me off citing issues with the free services and that I'm free to try another company but might have a job on my hands getting the creditors to accept a DMP again.

I don't normaly comment on these threads, but these sort of tactics utterly infurate me, and honestly in these cases the "DMP" copanies that act like this are  worse than any creditor.

Think of it from a logical perspective - which is how its looked at, to crediots you are just a number, thats all you will ever be and thats all you want to be.

You (legitimatly) tell them you can afford "x" per month, their choice is "x per month pays off debt in y months" or "Spend X in legal fees to try and get a little more"

No court will ever make you pay more than you have, you literaly cannot get blood from a stone. Once you accept this mindeset, it gets easier.

As much as creditors and debt collectors want you to think otherwise, YOU are in control, you cannot pay what you do not have, its as simple as that.

Good luck onm your journey, and make life as awkward as possibile for the "current" DMP company.

SpicyTomato

Update -

I received a letter from Barclaycard yesterday and the debt has been bought by PRA as Rob suggested it might have. Very easily set up a payment with them. 

I actually feel a little happier having had the barclaycard letter come through, appreciate other creditors might not be so easy or quick with the defaults/transferring of debts but makes me feel more comfortable sitting and waiting for other defaults for a little while.

Through further communication with my current DMP, they've agreed to end it at no notice. I'm still proceeding with a complaint regarding fees already paid. 

Thanks for the advice and well wishes, I'm glad I posted. 

Rob5342

Barclaycard were brilliant with me. They defaulted quickly, backdated the default to the day they had been informed by Stepchange that I was starting a DMP, and they put  friendly covering letters in with their official notices. Unfortunately they are not all like that, Virgin were appalling in the way they treated me and didn't default me for about 18 months. Hold out though as you'll be glad you did in the long run. It's surprising how fast it goes, it didn't seem like long ago that I was starting a DMP but now I'm half way through the six years until my old Barclaycard debt drops off my credit report.