DMP Self managed or third party help?

booandboo

So I'd decided a self-managed DMP is my best route to clear my 60ish of credit cards / PayPal credit / very accounts.

Ive spoken to my partner (we share a mortgage) who I live with and my kids and been honest about everything, he is shocked and naturally apprehensive. He is worried about debt collectors coming to the house. For instance we have a sofa and games console from VERy and he cannot see how they would not want to come and get their goods back. Now Im thinking the same? My family uses them and I feel sick having to make my kids aware of all of this. Should I keep paying that creditor until those goods are paid for?

Also he has made me think going via step change may be better as they 'know what they are doing' and may be able to get interest stopped / lowered. He has pointed out, by allowing my debts to default I am accruing charges and interest and though my credit report may be clean quicker, I will have more to pay back.

Any advice would be welcome.

ManyWays

Very doesn't want your sofa or games console back. The hassle of collecting them plus they will sell for peanuts... Also these may not even be on HP contracts, if they were just bought on the Very catalogue account that isnt secured lending and there is no way they can be repossessed.

What is your plan for replacing the lease car when that ends, as DIY or with Stepchange you will not be able to get another  lease. And any HP would be at a very high interest rate.

Is one of you self-employed, the HMRC debt and business loan suggest this. If you are, then you need to talk to Payplan, not Stepchange. PP have the same sort of DMP as Stepchange but PP tend to be pushier about an IVA. 

booandboo

ManyWays said:

Very doesn't want your sofa or games console back. The hassle of collecting them plus they will sell for peanuts... Also these may not even be on HP contracts, if they were just bought on the Very catalogue account that isnt secured lending and there is no way they can be repossessed.

What is your plan for replacing the lease car when that ends, as DIY or with Stepchange you will not be able to get another  lease. And any HP would be at a very high interest rate.

Is one of you self-employed, the HMRC debt and business loan suggest this. If you are, then you need to talk to Payplan, not Stepchange. PP have the same sort of DMP as Stepchange but PP tend to be pushier about an IVA. 

Thankyou thats reassuring to know, this is all feels so wrong and the opposite of what I am used too!

The car lease has 2 years left so aswell as our emergency fund we thought to put away 100 a month towards a car, in a few months he will be 200ish a month better off as student finance paid so he will save that too and have a few grand towards a runaround.

I am self employed yes and paying all my HMRC debt. My partner also HMRC debt due to overtime tax not being calculated correctly, but again in an agreement with HMRC.

Would you advice Payplan rather than self managed?

Brie

I agree that VERY doesn't want your stuff back.  They'd get next to nothing for used goods.   And they won't be sending around collectors either.  If they, or anyone else, did you simply don't let them in as they have no right to enter your property.  So don't worry about that.

I suggest that you stop making any payments to any of your non priority creditors.  You could write to your creditors and tell them that you can't afford anything and need to come to an agreement which includes them stopping any fees/interest.  Once everything has defaulted you can start you DMP.   In the meantime put any money that you've paid monthly on these debts into your emergency fund - always nice to have a pillow if you need one!!!

And I agree with your husband (sorry about that!) to talk to someone who does DMP regularly.  StepChange is one of the best known but they have occasionally pushed people to start a DMP quickly than is actually helpful.  NationalDebtline is another big charity that could help.  There's also Citizen's Advice (assuming your local has debt advisers) as well as Christians Against Poverty (CAP) and Community Money Advice (CMA).  These last 3 do the thinking bit of the job and write a lot of the letters and then will let you get on with doing the DIY DMP.   The good thing about using one of these agencies, even if just at the beginning, is not just to get their knowledge but they will also support you AND creditors know that they are serious and then also that you are serious about handling the debts.  

The other thing I suggest is having a read of the DebtCamel website - it's one of the best debt sites in the country and lays things out nice and clearly.  Great to refer back to as well if you forget something.

Debt Management Plan (DMP) - how does it work · Debt Camel

Best of luck, I'm glad that you've taken the big step to get things sorted.  

sourcrates

The one thing you must do is save an emergency fund, that will be essential going forwards.

You should start this straight away, by stopping payments to creditors, and putting that money aside.

People has some very mixed ideas on creditors rights, rest assured no one will be coming for the PlayStation or the sofa, imagine the logistics involved with doing that.

Step change won`t help if you are self employed, so as mentioned above, you can go to Pay plan, or DIY.

The advantage of defaulting first is twofold, one, its stops interest from being added, and two, it gives a clear 6 year window till your credit file recovers. The thinking behind this is that any interest added before default, will be offset by settlement offers at a much later stage in the process.

You can start a DMP without defaulting, normally defaults will follow after a time, or you may get AP markers instead, but honestly your credit file should be the least of your worries at present.

fatbelly

Tbh it sounds like you are getting debt advice from someone who is not used to debt advice.

Doorstep visits are rare and ineffective, which is why they don't often happen. A bailiff would require a defaulted court order and if you follow advice you won't ever see a court claim on normal debts.

Stepchange and Payplan are ok in that they do not charge a fee but tend to rush people into dmps and do like an IVA. They are no quicker in getting creditors to run through their processes and may even be slower than the diy route

So you get 3 months of interest & charges. So what? You can save greater than that with affordability complaints settlement deals and maybe other angles down the line.

Rob5342

Stepchange and Payplan don't do anything you can't do yourself. They are no more effective in getting creditors to stop payments and can actually make things worse by rushing people into dmps before they have defaulted and giving you extra hoops to jump through. They are funded by the creditors which puts them in an awkward position so they often favour action that benefits the creditors rather than you. They have their uses but should be used with caution. Some people use them to get started if they can live with their rigid approach and move to managing it themselves when they are more familiar with the process and want more flexibility.