Debt Managemt Plan query

Grumpelstiltskin

OK So how much each month are they charging you?

Surely you would like that amount to be paying your debts off instead of lining their pockets?

There is nothing to stop you canceling and going with one of the charities, surely  that would be better?

sourcrates

Argh stop paying Money Wellness now, today, your just throwing your money away.

Go to stepchange if you can`t deal with matters yourself, there is no excuse for you to continue using them, its crazy paying a debt company to pay a debt company.......there is a distinct irony there.

RAS

Yikes. An IVA is very rarely the solution. And of course Gregory Pennington were IVA central but maybe the fees are now getting less interesting.

What fees are they charging (just out of interest so we can help other people in the future).

PayPlan and Stepchange offer the exact same service at nil cost. At least talk to them.

All three have a bit of a problem with delivery. You need to go to your credit records (all three) and check that they debts actually have a default recorded against them. That means creditors do not add more fees and interest and your credit record clears in 6 years even if you've not paid the whole debt off.

If you've got any AP or delinquent markers do come back here as they damage your credit record for much longer.

ManyWays

Did they not tell you at your last annual review that you could stop paying the charges? If they didnt, I suggest you complain as they are receiving goverment funding. 

universallyuncredited

There's been lots of questions and advice given. Let me give some more information that would seem pertinent to some of the questions.

The dmp has been active for about 12 years. It started when a house we owned was let and the tenant trashed it and didn't pay rent. We ended up selling at way below what we paid and hence.had a large shortfall.  At the same time our first child was born who is disabled. I left work to be the primary carer at home.

The balance on our dmp is about £55k. We put all our CC and a loan into it at the same time.

As our income was severely reduced the dmp was a lifeline and so we just let it run.  Yes there were fees, but financially we had no way to clear this debt with fees or without, so we just let it continue.

Our credit files are now pretty good. The individual debts have been sold and resold so many times, and so much times has passed that any defaults are now cleared.  The only adverse credit on my file is missed payment in 2 years. That's it.

My disabled child is now nearly at a point where I can return to work, hence the potential change in circumstances.

From the replies it would seem my best course of action is now to switch to a free dmp or self administer and start clearing this debt now we are ( potentially) going to have an extra wage coming in.

As for the FWG we didn't select them to manage our plan.  I can't even recall who we went with as the company has changed hands so many times, but yes, they do charge a lot.  We pay £140 a month, of which £42 is their fee. Our plan currently has a 555 year term if we continue as we are.

Grumpelstiltskin

So £500 a year in fees, if it has been the same for 10 years that's £5000.  Please cancel now, just think how much sooner you would be clear if that amount of money had gone off your debts.

Some of your debts may be unenforceable because they are so old. Don't rush into starting paying again, when you have a final account from the company come back here with a completed SOA giving details of the debts and we can give you more advice.

universallyuncredited

Grumpelstiltskin said:

So £500 a year in fees, if it has been the same for 10 years that's £5000.  Please cancel now, just think how much sooner you would be clear if that amount of money had gone off your debts.

Some of your debts may be unenforceable because they are so old. Don't rush into starting paying again, when you have a final account from the company come back here with a completed SOA giving details of the debts and we can give you more advice.

Thankyou. I'm curious though. Why would any of my debts be unenforceable if I've acknowledged and paid it consistently for 10 years?

sourcrates

You should have been told there was a free alternative available, if it was me, I would submit an official written compliant to Money wellness, alleging that their fees have not only added to your indebtedness, but also lengthened the time you will be in debt.

This goes against the ethos of treating those in debt fairly.

I would ask that they refund the £5000 you have paid in fees, and add simple interest at 8% to the pot.

If they refuse, I would then take it to the FOS, who will decide who is right or wrong based on fairness to both sides.

I dislike Debt Management Companies more than I do debt collectors, as all they do is profit from your misery.

Grumpelstiltskin

Have you ever requested CCAs ( Consumer Credit Agreements ) On any of the credit cards or loans?

If they can't be produced then no court action can be taken so no need to pay them.

What we advise is to stop paying the and request CCAs, if they do produce valid ones then you can make affordable payments if they can't you just stop paying.

 With such a large amount of debt affordability would normally come into play but these debts may be too old to think about that.

RAS

universallyuncredited said:

Hello.

I've been in a dmp for a number of years, paying all my disposable income into it which amounts to about £140 a month.

My situation is potentially going to change and my disposable may go as high as £1000 a month..........

Any advice appreciated.

A lot has changed in the debt collection world in the last decade. A good many of the practices in which debt collectors used to engage are now banned or discouraged, although some of them look for wriggle room. 

Your current plan really is not helpful to you, and yours.

Do not increase your payments towards the debts when your income increases.

The basic of the debt collection industry is that they pay 5-30% of the book value and try and extract more than they paid for it from the debtor. So many will have already made a profit from you. 

When your surplus increases, feed some into an emergency fund so you can cover white,goods clapping out, etc. Put a little into your family budget for bigger ticket items; teens cost more than toddlers to take on holiday etc.

And put the rest into a fighting fund.

Then send CCA requests to all the credit card debts. If the debts have been sold repeatedly, some of the creditors will have lost the legal documents needed to enforce the debt. It's impossible to guess who's going to fail and who succeed in finding the papers. Give them a month and then stop paying.

You are also in the realms where creditors might start offering discounted settlement figures because the debt is so old. This is when you do not want to be managed by any DMP provider. It's quite possible that even if every CCA is found, you could still clear all this debt for £15-20k, maybe less, using discounted settlements.

Shift across to self management, and you can start to take advantage of this once you've got some money in the fighting fund. Do not just accept every offer. If they want £1200, offer £800 and see what happens. Maybe they'll come back with £890, and you can afford that.

Best of luck. Because your deserve some.