CCCS biased?

[tygar]

Hi

So I decided to deal with my debt problems and phoned the Consumer Credit Councelling Service for independent advice.(as per leaflet from Barclaycard). The very helpful counsellor went through my I&E with me and posted all the documents to me. Their reccommendation was that I go on an 8 year DMP (yipee!) through them. I thought that was fair enough at least I would pay back everything I owe.
I then came here and the general mood seems to be that DMPs are either too lenghty or risky (creditors can reject it anytime) and that an IVA is the way to go. I have been looking at IVAs and calling various firms.

What I find odd is that they all say an IVA is their reccommendation for me. When I query as to why they differ from the CCCS, I am told that the CCCS is sponsored by financial institutions and they act in the bank's interests i.e reccommend for the method that returns the most money to the creditors although it may not be best for the debtor. Is this true? If so it is very worrying and misleading of them as they give the impression of being unbiased. At the very least it explains why the leaflet I got from Barclays reccommended I speak to them rather than Citizens Advice.I don't know.........am curious of the truth though!

Thanks for your time and a wonderful forum!

[mish1953]

tygar
I beleive that CCCS mainly used DMPs and thats where there main expertese lies, they have only recently startd to use IVA's .
I got advice from PAyPlan which was also free .. found them to be very helpful .

After getting advice I decided that I should go BR , PayPlan agreed which helped me make my decision.

slainte
Mish

[sonyse2t5]

Any DMP that last for 8 years you should seek other altenatives.DMP are for 2 or three years.SHORT TERM SOLUTION. Creditors grow impatient in any time beyond 2 to 3 years and will sometimes ADD interest back on - your 8 years of DMP could be 10 years.

If you have a house, they will be eyeing it like an eagle on a barn mouse. They might after 2 years secure a legal interest on it - so that you can't sell it unless they get informed and the proceeds will go to them.

An IVA or BR are sure things and a give you a lasting peace of mind.

[MelanieGiles]

CCCS now also offer IVAs as well as DMPs and have their own in-house insolvency practitioner. It might be worth giving her a ring and asking her why her firm believes that an 8 year DMP is better for you than an IVA.

Debt advisors and insolvency practitioners should merely advise on options and not provide recommendations. The choice as to which way forward should be firmly left with the client, and if the advice is good enough the decision ought to be fairly simple.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[emma_t]

Hi Tygar

I approached the CCCS for advice a couple of months ago and at first found them helpful. When I had decided that an iva was the route I wanted to take, I kept with them as they had just started doing ivas in April of this year.
I was then passed around lots of advisors all of whom kept jumbling and changing my figures and it was so confusing and I lost confidence in them altogether. I never actually got to speak to the IP who wrote my proposal!!!
Thats when i found this forum (THANK GOD!!) and realised how crucial it was to submit a realistic proposal that you can live with for the next 5 years, and if this is not right at the start it is a nightmare leaving people in more of a mess than they started with.
I felt it was so important to have a good IP that you have full confidence in, as don't forget you have to deal with them for the next 5 years.
After posting on here (and reading hundreds of others) I was so impressed by Melanie Giles that I approached her to see if she could help me. I must say I have been very happy so far (apart from the postal strike causing a slight delay, which was unavoidable!!) with the advice and help i have been given and the speed in which matters have progressed.
If my iva is approved (fingers, toes and everything else crossed) I know I will have had the best advice and will be supported for the duration of the iva, which I believe to be very important.
Please get some other opinions as if you have misgivings about the advice you have recieved so far, it is probably not right for you.
Maybe speaking out of turn here, but check out Melanie's website and at least have a chat with Tina (she is lovely and really helpful).
I have also found this forum great for asking questions you are not sure of.

Blimy I am rambling - sorry about that!!
Good Luck
Emma

[Shining]

I'll second everything that Emma has said in respect of Tina and Melanie, what wonderful, calm, non-judgemental and friendly people. In irrational moments, they can make things feel so much better.

[Andrew Graveson]

Hello tygar,
DMP's have their place amongst different types of debt solution. In my opinion however where an IVA is available (in a form that is realistic and affordable) the majority of people would be better advised to go into an IVA.
Of course for the majority of people with debt concerns an IVA is simply not available. This may be because the debt level isn't high enough, too much debt is with one anti-IVA creditor, contributions at the required level cannot be funded etc etc.
The criticism of the CCCS is that their independence is compromised due to their reliance on creditor funding. For example they had very little to say during the recent criticism of penalty bank charges while other debt management companies were campaigning on behalf of their clients. We've also had clients come to us because they have been unhappy with delays in processing cases and/or unrealistic contribution level requirements at CCCS.
However if you are served well by CCCS the key benefit is that all of your contribution goes towards clearing your debts. A commercial DMP company will make charges for representing you and administering your case. This could mean that it takes longer to clear the debt.
One general statement that is made frequently on the site is that the creditors are always free to change their mind on contribution levels during the course of a DMP and demand more money. This statement is factually true. In reality we have not had a single case where agreement has been reached with a creditor and they come back subsequently looking for more. DMP's are technically vulnerable in this respect, but it's not a vulnerability we've seen creditors exploit.

Andrew Graveson
Independent Mortgage Broker & MD Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[tygar]

One general statement that is made frequently on the site is that the creditors are always free to change their mind on contribution levels during the course of a DMP and demand more money. This statement is factually true. In reality we have not had a single case where agreement has been reached with a creditor and they come back subsequently looking for more. DMP's are technically vulnerable in this respect, but it's not a vulnerability we've seen creditors exploit.

Hello & thanks for your replies.
I am really interested by the above which I quoted from Andrew Graveson. When I spoke to CCCS they explained that DMPs allow me the flexibility of increasing my payments when I can and thereby reducing the length of time I take to make these repayments. I really want to pay back as much as I can but was worried about one of my creditors taking further action while I do this.

Is it true that financial institutions rarely pursue a person on a DMP? That is my biggest worry about them.

The CCCS suggested I go on a DMP with them as most financial institutions accept DMP proposals when submitted by them. Is this true?

They even said that Barclays (my biggest creditor) have an agreement with CCCS that the bank,once it accepts the DMP,will open a new basic account for me which is run separate from my debts.
I am in a job where my wages are guaranteed to rise by £10000 over the next 2 years hence I could reduce my proposed 8 year DMP by putting in this additional income when it becomes available.Also I plan on hammering the overtime when I can get it reducing the term even more.
I have read on here that if you work hard in an IVA or get a windfall where you manage to pay back 100p/£ to your creditors,you are liable for the IP fees. Is this not a disincentive for someone to work extra hard and try and pay back all they owe? Why do the overtime,take that promotion or accept that family loan if it results in you paying more?
From the information I have a DMP seems more flexible and less intrusive and more proactive than an IVA,am I wrong?

I'm so confused! At the moment I have not defaulted with any of my creditors but need to do something soon. Just concerned about creditors changing their minds and chasing me.

Any info would be appreciated.

[sonyse2t5]

Depending on your debt size a DMP may be better, You ought to say what your debt is. Size is everything in this business.

CCC seems to reinvent itself with new add-on to its core service of taking debtors reduced payment and paying creditors. Their IVA service are just kneejerk reaction to the explosion of IVAs in the market and I doubt they have the man power or/and years of experience so to speak...they are so stretched with their DMP core service.

As for the offer of a basic account opening facility on your behalf it is more of a gimmick. Who wants a basic Bank account with Barc - it doesn't even offer a debitcard facility (solo/visa electron/masetro) Really, I am unimpressed with that Barclays and CCC deal.

What CCC should say is to guaranteer interest freeze throughout your DMP peiod. I doubt if they want to comment on that as they have no powers to to do that.

Any increase in your payment later as your earnings increase could be accompanied by interest charges added on later - you never know when-if lenders perceive you can pay more then maybe you can afford some reduced interest??

Creditors can and will change their minds - they always say in their correspondence -" a temporary arrangement put in place to reduce your payment" or "the bank will show some flexibility" then offer you a consolidatory loan at 13.3% interest -HSBC and TSB are known to love that line.

In a IVA you might be asked to pay more as you can afford it as in a DMP, but I'll be surprised if you will end up paying 100% of your debt in an IVA, there is always some element of debt written off.

[tygar]

Hello

Thanks for the response. Below is my info as worked out on the expenditure summary from the CCCS.

Total income - £1408
Total expenses - £841
Surplus - £567
TOTAL DEBT (APPROX) - £56000
Approx Repayment time - 8.5 years

This does not take into account the future pay rises or overtime.

Thanks for your help!

[MelanieGiles]

You will rarely find someone who will advise you that it is better for you to offer a DMP to your creditors over an IVA if you fit the IVA criteria, but at the end of the day that is your choice.

Some statistics to perhaps bear in mind. 80% of IVA proposals presented to creditors are accepted, and a similar number of DMP's do not eventually succeed to pay of the debts. Make your own mind up as to which is the securest option for you!


Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[tygar]

You will rarely find someone who will advise you that it is better for you to offer a DMP to your creditors over an IVA if you fit the IVA criteria, but at the end of the day that is your choice.

Some statistics to perhaps bear in mind. 80% of IVA proposals presented to creditors are accepted, and a similar number of DMP's do not eventually succeed to pay of the debts. Make your own mind up as to which is the securest option for you!

Hello Again!

I just looked at MY OWN figures and realised that with total creditor agreement and no interest I would have to pay around £930 a month to repay what I owe in 5 years![:0] That's about £400/month more than I can afford now with no security or peace of mind! Sorry everyone,I am bit thick at times.[B)]This will never work.

This (rather slow) realisation and the above qoute from Melanie has just convinced me that CCCS is biased. That is my opinion. I have now made my decision - IVA is the way to go.

Thank you everyone.

[tygar]

So that sounds like 40p to the pound-(567/1408)*100 - to creditors/IP Fees.

Hello again![B)]

Somebody PLEASE explain to me this Pence in the Pound buisness! The above quote just confused me.Is it the ratio of net income to disposable income? I thought it was worked out as the ratio of total value of IVA monthly payments (minus IP fees) to total debt.

I must have got the wrong end.....someone please enlighten me.[V]

[MelanieGiles]

You are correct Tyger, and I feel that the dividend you could offer would be in the region of 46p - which is a very good offer. I base this on 60 monthly payment of £565, having allowed for IP fees, costs and VAT of approximately £8,000.

Good luck in your search for the right solution.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[sonyse2t5]

I did typo errors...

I meant to say....60 months of payment of 565 =£33,900

No fees added
33,900/56,000=60 pence to the pound before IP fees,cost vat etc.

When Fees added of £8k
25,900/56000 =46 pence to the pound

The only think I will say to support a DMP is that most lenders will not default you on the credit referene and record it as satisfactory in so far as they accept the reduced DMP payment. So you credit reference will look OK thjroughout your DMP.

In an IVA for Equaifax, they will make a default entry every month for 6 years in affect bring it down to poor standard and you can't have any credit and may be turned down on mobile contracts etc.

RBS/Natwest Bank treat IVA the same as Bankruptcy. DMP have no such detriment status. Credit reference entry doesn't have a 'DMP entry' as if you have not entered into one.

Your name will be in a insolvency register for six years and people can look you up, but they have to know the list exist.