Are debt managment plans a good idea?

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Skint2918
Skint2918 Posts: 11 Forumite
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in Debt-free wannabe
Hi guys need a bit of advice. I've been speaking to a company about a debt managmment plan. I owe around £29000.and done a budget with company and I can pay £1000 a month towards plan with no problem
What is success rate with these plans. And. How likely for creditors to accept. Offer? Just need advise as scared they won't accept then get ballifs around and end up going to court

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  • Skint2918
    Skint2918 Posts: 11 Forumite
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    Quick note company I have spoke to are step change.
  • Carrot007
    Carrot007 Posts: 4,534 Forumite
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    They are great.


    But you will be better off in the long run if you tell the companies you are having issues and stop paying anything until they default you.


    They may not or do it much later on a plan.
  • Willing2Learn
    Willing2Learn Posts: 6,294 Forumite
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    Hi Skint2918 and welcome to the forum :)

    You have posted your thread in the wrong section. (This is a thread for the DFW board) :)

    The Debt Collection Agencies (DCAs) will all accept your DMP (managed by StepChange). Bailiffs would only happen if you were to fail to keep up to your scheduled DMP repayments.

    I believe that people who enter into a DMP with a realistic monthly budget will be successful in their debt-busting endeavours.

    Why not post up your SOA (Statement of Affairs), so that we can give meaningful advice, guidance and support?
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • sourcrates
    sourcrates Posts: 28,878 Ambassador
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    Moved to correct forum.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it 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.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,492 Forumite
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    Note. Bailiffs can only be instructed (on a consumer credit act debt) if there is a defaulted court order.

    OP, a statement of affairs would be useful as I would have expected that your surplus income (£1000 per month) would be enough to meet the contractual payments on 29k of debt unless you have a lot of short term loans in there..
  • MissMollyJ
    MissMollyJ Posts: 85 Forumite
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    I was thinking the same thing - it would be better to just pay it off with the £1000 a month than enter aDMP surely?
    £2 Savers Club 2020 no. 9
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    Skint2918 wrote: »
    Hi guys need a bit of advice. I've been speaking to a company about a debt managmment plan. I owe around £29000.and done a budget with company and I can pay £1000 a month towards plan with no problem
    What is success rate with these plans. And. How likely for creditors to accept. Offer? Just need advise as scared they won't accept then get ballifs around and end up going to court

    Transfer it into this format and post.

    https://www.lemonfool.co.uk/financecalculators/soa.php

    That will give people a chance to assess how realistic the budget is

    Also with the debt details(any defaults, rates etc) assess if there are alternative.
  • Skint2918
    Skint2918 Posts: 11 Forumite
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    Problem. Is I have about 14 creditors. Payday loans. 2 loans. Catolouges and couple credit cards which all monthly payments come over £1000 a month
  • sourcrates
    sourcrates Posts: 28,878 Ambassador
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    edited 7 December 2019 at 5:27PM
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    Skint2918 wrote: »
    I owe around £29000.and have done a budget with stepchange and I can pay £1000 a month towards plan with no problem.
    What is the success rate with these plans. And. How likely for creditors to accept. Offer? Just need advise as scared they won't accept then get ballifs around and end up going to court
    Skint2918 wrote: »
    Problem. Is I have about 14 creditors. Payday loans. 2 loans. Catolouges and couple credit cards which all monthly payments come over £1000 a month


    Hi,

    Creditors have no choice in the matter, they either accept the payment plan, or they don`t, if they don`t, normally all that will happen is the debt will be sold on, the new debt purchasor will gladly accept the DMP offer, again, if they don`t, they will rinse and repeat, thats roughly how the system works.

    Failure rate is fairly low, usually most arrangements continue until repaid, or settled by full and final offers, court action is rare, whats the point if your already paying whats affordable ?

    Fatbelly explains when a bailiff can be involved, above, only in very limited circumstances.

    From what you have said a DMP may be appropriate, completeing the SOA will confirm if this is the case, or not.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it 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.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • fatbelly
    fatbelly Posts: 20,492 Forumite
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    Skint2918 wrote: »
    Problem. Is I have about 14 creditors. Payday loans. 2 loans. Catolouges and couple credit cards which all monthly payments come over £1000 a month

    I suspected that might be the case. High interest, high monthly payments.

    It would still be useful to see a statement of affairs though a DMP may well be the best way out of the mess.

    It almost goes without saying that you do need to work out, and avoid for the future, how you got so tied in to catalogues and payday loans.
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