Help Needed: Debt Management Plan Or Not???

[gutlessrhyme]

Ok to cut a long story short, i have a credit card which is over the limit every month. My overdraft is over its limit every month. Im getting charges on charges, have about £3500 worth of debt and although im earning a regular wage, it barely gets me by due to all these fees and payment. I have plenty of black marks on my credit file from the past few years.

I spoke to AllClear finance who said they cant offer me a loan, but are willing to put me on a debt management program. I pay them £120 a month, and i am debt free in 3 years. Im aware that this shows on my credit file, as it defaults all of the debts, but the financial advisor there said that it doesnt matter as ive already got defaults on my file, so it doesnt matter if ive got 1 default or 10 defaults, its still going to take 6 years to clear.

So should i go ahead and start this program - change my bank account (i already have another one) and pay £120 a month rather than the £600+ im paying at the moment?

seems like a good idea, but too good to be true?

any advice very welcome

[demon_x_slash]

A lot of these companies are known for taking a huge percentage of the money you give them as 'admin' and 'service fees'. Why pay a company to do it for you when you can do it yourself for free? True, it involves a little more hassle, but is very satisfying.

All the 'charges on charges' you talk about are reclaimable. Go to the bank part of this forum, find the section dedicated to your credit card provider and start reading through. When you question these charges, the account is put 'in dispute', and charges and interest should (in theory) stop until you and your provider have resolved the situation (and you have had a refund).

I would also get a copy of your credit file from every CRA (different ones can hold different information on you) and see if any of those black marks can be cleaned up. Do you have any defaults? If so, did you receive notice of these defaults at the time?

If you are struggling financially, you could try writing to your creditors laying out your circumstances and asking them to accept a reduction in the regular payments you are making. There are templates for this in the sticky at the top of the Debt forum.

Come back if you need any more help

[gutlessrhyme]

yes i was informed about the defaults and have come to accept that there are 2 or 3 defaults on my file which is beyond repair for a fewyears.

Basically i get paid £880 a month. about £150 of that goes staright away in overdraft charges and direct debits bouncing.

I recently reclaimed £800 in charges over the past few years so i cant go for that option.

is there any down side to giving this company £120 a mont for 3 years? like i said my credit file is already beyond repair so a couple more defaults aren't gonna make a difference.

How long winded is it if i do it all myself? are there step by step instructions anywhere? im worried that if i ring them all and tell them i can afford to pay, ill get debt collectors at the door again!

[demon_x_slash]

It's all on this site, and yes, it is possible that some companies will be unreasonable and refuse to accept a reduced payment. But they can also do this with a DMP, so you're in the same boat either way.

I recently reclaimed £800 in charges over the past few years so i cant go for that option.

Why? They're still charging you. It's still unlawful. Each charge you get adds to the lump of debt sitting gloating redly at you in your account.

Take a look at barracad's sticky about debt management; all the template letters are in there. You could print them out, get yourself some business cards and call yourself a Debt Management Agency with no problem - which is the point, I wouldn't be surprised if that's all most DMA's do...

[sequenci]

don't go with a fee charging DMP firm!

do it your self!

[biffinplate]

You could contact the Consumer Credit Counselling service. They are a charity and will offer you best advice for fee. If a debt management plan is suitable their plans are free of charge. CCCS -

[scampjet]

I,ll second that!

We considered paying a for a DMP but decided not to after we saw the Consumer Credit Association website. Iy can all be done yourself and although its a pain it does work eventually. If your are in the same position as we were our creditors we going to take us to court anyway or threatening to. Most companies have an "if your having dificulty making your payments" leaflet and procedure and if they do not treat you sympatheticaly then they are breaking thier own guidelines. Many companies will accept reduced payments if you send them a financial statement and will review this every 3 to six months. Pay them only what you can afford and formaly ask them to suspend interest and charges. You will get lots of phone calls demanding money, but if you stick to your guns they will probably pass the debt on to a collection agency. When they did this to us our payments reduced because only the debt was being paid.......no interest and charges. Once an agreement has been made with the debt company the phone calls should stop. If not. report them and they will stop. Even if they take you to court.......providing that you are seen to be activley trying to do something about it....any court will judge that you are doing all you can. After years of struggling on and trying to please my creditors..........the advice of this site and the CCCs has allowed me to regain control and feel empowered rather than downtrodden. I look forward to creditors letters now so that I can have another go at them.........Just get your facts right and ask for any help you need on here.

[SHERLOCK]

PAYPLAN ARE ALSO A FEE-FREE DMP.

I USE THESE AND THEY DO SEEM TO BE IN MY COURT, THOUGH I DO SOMETIMES WONDER WHEN IT IS CLEAR THEY ARE FUNDED BY THE FINANCIAL SERVICES.

THAT SAID, THEY HAVE BEEN REASONABLE WHEN I MISSED PAYMENTS AND I ONLY GET DCA LETTERS (yeh I friggin' know you're there! ) WHEN I'VE MISSED PAYMENTS,

If you have the time, through the help and templates on these forums you could take control of it yourself, I must admit since finding this site I have OFTEN thought about doing it myself.

THAT IS THE CONFIDENCE THIS SITE, AND THE ADVICE FROM THE PEOPLE WITHIN IT, CAN GIVE YOU

SHERLOCK

[121o121]

Two years ago I was on a debt management plan. I paid a company to run it for me. It was costing £70 a month for them to do this. After three months I informed my creditors that I will be making the repayments from now on not the management company. They were happy with that so I ditched the DMC and ran it myself (saving me money and paying off my creditors earlier too).

Nowadays I'd be more confident to deal with the whole issue myself, but at the time it was a welcomed release for them to negotiate on my behalf.

My sister is currently on a debt managed plan and I've told her to ditch the company and continue making the payments herself, but she won't. She could save a fortune.

[gutlessrhyme]

has anyone got any links? im gonna try attack this one on my own...

[121o121]

National Debtline, for FREE CONFIDENTIAL and INDEPENDENT ADVICE call 0808 808 4000

Here you'll find pretty much all you'll need to know. You can write your own letters to creditors asking them to reduce monthly payments and freeze interest on credit cards. Have a good hunt through them, I'm sure they'll help you.

Good Luck

[demon_x_slash]

Originally Posted by demon_x_slash

It's all on this site...take a look at barracad's sticky about debt management; all the template letters are in there.

Is it bad forum practice to quote yourself?

[gordonf]

I'd also support the views on CCCS, who were brilliant with me when I appraoched them. It's hard work to start in the amount of information you have to provide but they are very knowledge and non judgmental about the situation.

What we've found is that once your creditors know that you are dealing with CCCS their attitude towards collecting the debts changes completely, to the point where they back off to a large degree.

If you haven't already done so, I'd suggest calling them straight away and start the process. It was a great weight off my mind when we spoke and agreed a way forward.

[Gingerheid]

I'll third, forth, fifth... whatever we're at CCCS. On the receiving end their contact often seemed to be presented in a more reasonable and persausive way. Certainly more reasonable and persuasive than a plan from someone charging 25% a month. You're looking at that thinking "Are we getting all the money this person should be giving us from this?". The answer is "no, we should be getting an extra..."

[tinag2003]

Hi everyone, found this site through a friend, certainly glad i did because alot of useful advice, i like many people joined a fee paying debt management company with a promise of peace of mind only to findit has been the most stressful 6 months ever. In particular Lloyds Tsb who after 6 months are still charging me over £30 interest charges even though my debt management company negotiated £11.73 a month which Lloyds accepted. Clearly if i carry on like this i will be paying for the next good number of years. Surely it cannot be legal or morally right for a company to behave in this way, i wonder if any other members have had a similar experience and found a solution. Should my debt management company have got the bank to freeze these charges by now. Needless to say i have now moved to a free debt management company. Tina

[vandermerwe]

Hi folks.

In my view CCCS is marvellous. They saved my sanity this time last year. And yes, they are a charity and every red cent I pay them is distributed to my creditors.

Just a few comments:

Your debts, just like mine, will always be my debts to do with as a wish.

After about four months of sorting out, during which time I sent each creditor a completed CCCS form and then a £1 token payment each month I set up a debit order to CCCS for £xxx per month and for a year now they have distributed this pro rata to each creditor and no hassle from any of them.

Some of my creditors have flogged off my debt to debt collectors, and even THEY have continued to accept the pro rata payments.

It all sounds too good to be true!

CCCS must be effective as one newcomer - an American company - has devoted one whole page of its website to slagging off the CCCS.

No, I don't work for CCCS but must say they featured in "The Sunday Times" Top 100 companies to work for a few months ago.

My only negatives about them:

a) At certain times difficult to get through to by phone (but DMP members have a website contact which is usually answered in 24 hours;

b) Their abominable background music whilst waiting on the phone - not exactly the type a stressed person needs;

c) They will not discuss, in particular, specific debt collectors. Their excuse is "we have to work with them". OK, can't really complain about that. Their telephone staff are absolutely charming - one, obviously elderly, lady even called me "luv".

Van