Debt management companies to AVOID

[sequenci]

that is frightening then. Does that mean that I would have to pay the Nominee's and the Supervisor's fees IN ADDITION to the net debt that I owe to the various companies, in all probability? If so I had better cancel the initial £200 that I have sent to the provider for them to convene a "creditors' meeting" for acceptance/non-acceptance.

 

We've heard of people actually paying more back in the past. One to consider is that if your equity is similar to the debt level your creditors may argue (at the creditor's meeting) that you should simply remortgage and pay them off. The vast majority of IVA's have an equity clause which will expect you to try and remortgage about 4.5 years in anyway.

 

With a debt level of £15k and a monthly instalment of £200 a DMP would take just over 6 years, I feel you would be miles better with a DMP due to the fact that they are way less risky with no implications with the property. Under an IVA you will heavily scrutinised by the Insolvency Practitioner, this could be hassle you could well do without.

[naughtykitten]

One thing that has been mentioned by one of the 'paying' debt management companies is that the free ones such as Payplan or the CCCS tend to pay more proportionately to a certain creditor if the actual creditor funds/sponsors them than if they do not. Is there any truth in that, or would they work on a strictly pro rata basis?

Hello there. The fee-charging firm have told you a lie there, both payplan and cccs work on a strictly pro-rata basis. I can 100% guarantee you that as I work with both firms very closely!

 

>>sequenci is absolutely right! The majority of these companies, if not all of them, do help fund payplan & the cccs, that part is true, but payplan & cccs do work very strictly on a pro rata basis. I have heard, however, that some of the companies that charge a fee have been known to favour some companies over others but this is absolutely hearsay & I don't know how true that is!

 

do you think that payplan and cccs are equally good at e.g. freezing interest.

 

I would say better in my experience of advising HUNDREDS of clients.

 

>>again, I absolutely agree!

 

If you have property I would steer very clear of an IVA, it is VERY likely you will pay 100% of the debt back.

 

We've heard of people actually paying more back in the past. One to consider is that if your equity is similar to the debt level your creditors may argue (at the creditor's meeting) that you should simply remortgage and pay them off. The vast majority of IVA's have an equity clause which will expect you to try and remortgage about 4.5 years in anyway.

 

With a debt level of £15k and a monthly instalment of £200 a DMP would take just over 6 years, I feel you would be miles better with a DMP due to the fact that they are way less risky with no implications with the property. Under an IVA you will heavily scrutinised by the Insolvency Practitioner, this could be hassle you could well do without.

 

>>From my experience I would also advise a DMP over an IVA any day, especially if you own your property, for the reasons sequenci has already gone through. It would also be less risky if you situation were to change again at any point in the future.

[Poor-Credit Borrower]

Test

[Poor-Credit Borrower]

I apologise for my message saying just "Test". Was just testing whether my new password was working!

 

Shall have a further look at the replies by sequenci and naughtykitten, about IVAs versus DMPs so many thanks again.

[marc_30m]

My advice would be to do it yourself. You have far more control and you'll know what's going on with your money.

 

I owed £140,000.00 in unsecured debt. Just wrote to my creditors 14 or so saying I couldn't afford it and interest was frozen immediately. They all accepted my repayment plan with a I&E spreadsheet. They all call every 4-12 months asking for increases and I say yes or no if i can afford it.

 

This has been going on for several years now and if you make your payments you don't get hassled apart from the reviews. I now refuse to provide I&E reports on the grounds that I am a loyal payer of my debts and I'll decide what I can afford not them. Long way to go but getting there.

[Poor-Credit Borrower]

A lot of unsecured debt marc_30m. You have to be very organised to write to all the creditors yourself, but I suppose it only take one letter if written from a decent template.

 

You may well be quite a lot younger than myself. If I do go on to an IVA, I would (or should) be out of debt (except for secured debt) before I retire. Although a DMP might only take 8 years...

[Poor-Credit Borrower]

Hi again, it is almost certain that I will use Payplan or the CCCS then. Yes, will certainly avoid Gregory Pennington or Eurodebt.

 

I have had a phone call from a certain company purporting to offer "debt elimination" or effectively wiping out the debts after, say, 2 years' repayments, but I think the "debt elimination" company is more out to get money for themselves... They claim that certain loans originated before April 2007 are unenforceable, as they invoke the Consumer Credit Act 1974, if not all the i's have been dotted or all the t's crossed - in other words there could be loopholes. Has anyone heard of a company called First Step Finance (Manchester based)?

[forest2]

Hello everyone

 

Thought id offer a little advice on this matter to anyone who cares

 

I work for a finance companies debt managment team and i deal with a company called gregory pennington. My first advice is avoid them as they charge ridculous fees and people rarely realise how worser off they can be with these companies. If you just pay them their monthly charges they will take that and not pay off any of your debts whatsoever but keep you on plans as your paying them.

 

My advice is go with CCCS as they are a registered charity and charge you nothing. Jut make sure you make reasonable payments to them to help pay off your debts and dont be silly to just pay £1.00 token payments as with my company we can only reschedule your account to 300 months as for example if you have a £5000 gross balance to pay and you just offer £1.00 thats not going to fit so my company will not reschedule the account and it will end up as bad debt leading to eventual legal action etc etc etc.

 

If you pay a reasonable amount such as on a £5000 gross balance around £20 a month so it fits for a reschedule as its under 300 months payoff. Once its been rescheduled and you become better off you can pay extra which i would advise you do as you would end up going into pre-paid status which in turn say if you started paying £40 a month your account youve essentailly paid 2 months up front as your contractual payments are still set at £20. So if you fall on hard times again each extra amount you paid will give you that little extra breathing space as your account is infront of payments but even in these hard times i would advise you still paid at least £5 (remember this is on the basis of £5000 debt so adjust to what your debt would be etc) just to keep your account with the debt managment alive and to keep your debt ticking over still.

 

I know this is long winded but i hope it helps someone out there.

[studentatou]

dont be silly to just pay £1.00 token payments

 

So what happens if that IS all you can afford!?!

[sequenci]

So what happens if that IS all you can afford!?!

 

exactly. the payments should be based upon affordability.

[loobyloo85]

I am too with Payplan DMP, and have found their service excellent - have been paying just over a year now, and feel a lot better, plus they do not charge a penny!