I got in touch with Pennington and today got their letter. They claim I have debts of £12.400. After them doing a income and outgoing flow chart they have informed me that my income is £1300 a month and that I can afford to pay £645 a month to a payment plan. 50% of my income. That will leave me enough to pay my rent and have £90 to live on for a month. God knows what I will do for food and essential bills. Oh the £1300 is before tax, insurance etc. They have informed me that. From the information you have given, we have calculated that after we allow for all your essential day to day living expenses you can realistically afford a monthly payment of £645.00 to repay your creditors and this is the amount you should pay into the payment programme at this time. Your first payment of £645.00 is due to be paid by the 29 April 2010. They then go on to tell me that the first payment is their setting up fee and that I will therefore be 1 month in arrears on the payment programme to start with. Their fees will be deducted each month before they pay any money to my creditors. I have this morning been to the CAB and they have given me a pack to fill in and then advised me to talk to the Debt Advisory Council at Birmingham. The CAB also informed me that from information they have received from others that Penningtons do not make the payment to creditors immediately on receiving payment from me. They make the payments anything up to 30 days later, thereby placing me 2 months in arrears with my creditors. This is what they claim is normal banking procedure because they would be getting interest on my money. I spoke with a friend of mine also last week, (that's why I ended up at the CAB), he said he had a plan with Penningtons and it cost him dearly to get out of but now what he pays to his creditors is off of the balance, he also got all interest stopped for 6 months from his creditors with the open option to talk to them again in 6 months time. He has said it will take him about 3 1/2 years to get clear but it will be worth it in the end. One of his main reasons for telling me not to use Penningtons is that should after I start paying in to a payment plan I should be ill and unable to make the full payments I can be worse off as they will still take their charges and then dump me leaving me to sort it all out myself. After discovering how to sort this out I will not be using Penningtons. And I will be saving money to use towards my debts. Whilst doing this posting I have spoken on the phone (mobile pay as you go O2 with 100 free minutes a month) to 2 companies I owe money to. They have both agreed to cancel any further charges for 3 months whilst I sort out my incoming and outgoings chart. 1 of them has agreed to reduce the amount owed by deducting the last 4 months charges. This company also told me that I should have spoken to them sooner as they can help me get full sound advice. They also informed me that all reputable companies have a department that can assist with regards to debt and can do so even after they have started court action. Wish I had known all this sooner. Hopefully I can now start to sleep easier at night.