DMP's

[anais743]

How succesfull can it be to secure DMP with fees/interest frozen if IVA fails. Anyone out there with any experience of this?

[Oliver]

I would suggest that there was a good chance of securing the freezing on interest and fees in a DMP if you use a professional company or perhaps the CCCS.

[size5]

I concur and the new protocols are worded in such a way that should a DMP not be successful then at least it can be proven that you have tried to reach an informal arrangement with the creditors.

Regards.

[Adam Davies]

Hi
Andrew Graveson of debt management firm Brightoak talks about this in his interview
http://tv.iva.co.uk/default.asp?id=359
Regards

[ladyc]

Hi,

I am in a DMP and all except one creditors have frozen the interest.
The one(Morgan Stanley/Goldfish) has reduced the interest to 3%.
Only problem is putting that interest on will mean it will never finish as my payment to them is approx £3 above the amount of interest that is added each month.
Still, I suppose it's pretty generous of all of the creditors as it costs them to administer the accounts.

[size5]

It is nice to see DMP getting a good review. Whilst undoubtedly it doesn't carry as much weight and legal protection as IVA, the very fact that a lot of respected posters on here provide it as a service should reassure people that it is not as bad as it is sometimes painted.

Regards.

[AlanO]

DMPs have there place and certainly can buy time - just have to bear in mind they are part of a solution not the solution

All the best Alan

www.debtdr.co.uk

[ladyc]

I have to say that I no longer get phone calls or threatening letters from creditors. My only problem with it is that it takes too long to clear my debts. At present mine is due to end June 2030.
I think it is an excellent solution if the debt is not too high and a reasonable amount of repayment can be afforded.
Another advantage is that , if you are able, you can offer a F & F or short settlement at any time.
You could also renegotiate your payments if circumstances changed.
It can be a good thing like all of the options. It is whatever suits you.

[Andrew Graveson]

Hi AlanO,

A slightly cryptic answer there! I'm interested to understand a little deeper your thoughts on this.

In terms of the thread in general....

The vast majority of creditors will consider freezing interest and charges on accounts where someone is doing their level best to repay debts that would otherwise be unaffordable. It's taken as part of the commitment to "treat cases of financial difficulty sympathetically" in the British Banking Association's Code of Conduct.

No responsible DMP company will promise it to an individual in advance as it is in the gift of the creditors.

A DMP doesn't carry the same certainty as an IVA. It does carry a much greater degree of flexibility than an IVA. For example if a property appreciates in value and equity is accessible a full and final offer of settlement could be proposed according to the debtors wishes rather than according to the IVA timetable.

With the recent creditor backlash against IVA's a DMP is also very often the best solution available because an IVA simply isn't available.

Different solutions work best in different scenarios.

[Adam Davies]

Hi
Surely a DMP can be a solution in the right circumstances ????
Regards

[size5]

Intriguing answer I agree. There are scenarios where DMP is the ONLY logical answer, so to make a sweeping generalisation could be open to mis-interpretation, I suspect Alan meant to say that they are not the only solution, which is certainly true.

Andrew, what would you say, in your experience, is the failure rate of DMP's in the first 3 or 4 months and could you put a figure on the success rate re freezing of interest before and after that period?

[AlanO]

Hi Andrew

I believe DMPs are great to ease the pressure and then hopefully enable planning for the future - Sometimes they may be the only viable ongoing solution.

In other circumstances DMP may be the stepping stone to move into a full and final settlement perhaps off property as you mention, or if appropriate IVA or bankruptcy - or increase the payments if difficulties ease to get an early repayment

I see DMP as one of the tools available to get help people get out of debt

All the best Alan

www.debtdr.co.uk

[Andrew Graveson]

Hi size5 and AlanO,

I agree with AlanO's comments; I think we all agree different solutions are best-advised in different scenarios according to unique personal circumstances.

In terms of the drop-out we see no trend amongst our clients to drop out in the first 3 or 4 months. This is perhaps because we're not interested in the hard-sell, spell out the pros and cons in advance, and work hard to set up a payment amount that is fair on creditors and sustainable for our client.

The limited drop-out (or more often single missed payments) that we tend to see focusses on smaller contribution cases. In these instances it only takes an unexpected bank charge or domestic problem with financial consequences to make the monthly payment impossible.

In most instances the majority of creditors will have frozen interest and charges within 6 weeks of the proposal being posted out if the DMP company works the case proactively.

There are exceptions. For example one major UK financial institution will not freeze interest until the contractual payment is four months behind. This creates a strange paradox whereby a DMP company would perhaps best serve their client by distributing monies to the other creditors only to ensure this particular debt gets four months behind as soon as possible. Surely not what the bank intends?!

On the exceptional cases where interest isn't frozen it will generally happen when the debt is sold on. Different financial institutions have different plans as to when they will do this.

Sorry there are't more specific stats in this reply but I do not have them available and wouldn't want to speculate.

[size5]

Fair enough answer, I would also agree that the majority of lenders are very good at freezing for the responsible providers.