MBNA want more money

[ladyc]

I have a DMP which has just got going. I have two debts with MBNA. I received a letter from them stating that they would not accept the level of payments from the DMP as they were too low and wanted higher amounts that they stated.
I rang them up and agreed I would pay the extra as I didn't want them to pass the debts on to Debt Collectors. I changed the amount of the standing order and advised Payplan. They said I shouldn't have done this and to ring them and tell them they couldn't have it or the DMP will fail as the other creditors will find out and demand more.
I'm just trying to keep things ticking over while I think of what to do next. I don't want charging orders on my home if possible and I don't want debt collectors coming round.
Do you think I could pay MBNA the payplan amount through them and then pay the rest seperately to MBNA direct? Will this still fail? Will it win me some time? Will payplan find out and wash their hands of me? HELP???

[pbeck]

The whole point of having a DMP or an IVA is that you deal with the debt solution provider, not the creditors directly. Payplan are right in saying that you should not be paying creditors outside the DMP as that is perferring one creditor over another and the whole DMP might fall apart.

You should tell Payplan that MBNA are not accepting the DMP proposal that you put forward and see what PAyplan do to resolve it.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[ladyc]

I have told Payplan that MBNA won't accept the offer but they were of the attitude that they could take it or leave it.
My fears are of debt collectors hounding me plus I was horrified to read of the new powers being given to bailiffs. I am afraid of the consequenses if I don't pay.
I realise that it is giving preferential treatment to one creditor over another and if I could afford to pay them all more then I would.
In the end it is me that will have to suffer the consequenses and I would rather squeeze a bit tighter to pay these than have the alternative. What else can I do?

[pbeck]

I suggest that you call MBNA's bluff, tell them that you can't afford to pay more than what was put forward with Payplan, and that if they do not accept it your DMP will fail and you have no alternative but to go bankrupt.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

[Jo Rolland]

Some creditors, MBNA being one of them, will always try to get you to pay more. On the whole MBNA do not pass their accounts to DCA's, they sell the debts on. If you do pay them extra and any other creditors are made aware of this, they will also want larger payments from you as you would be giving MBNA preferential treatment. You should let Payplan deal with MBNA and not deal with them directly.

Jo Rolland
Debt Alternatives
www.debtalternatives.co.uk

[ianmillington]

MBNA's current position seems to be that they don'treally want 3rd parties (DMP companies and the like) involved. Basically they seem to want you to come to your own arrangements with them and recommend you deal with all your other creditors direct as well. The problem is that on many occasions the amount they want in respect of their debt is disproportionate. If your other creditors were to find out about they won't be pleased and could withdraw from the DMP. Payplan are right in what they say. They have promised all the other creditors a pro-rata payment.

To help can you state:

The amount of monthly contribution
The number and value of your creditors in total
The percentage of your total debt represented by MBNA.

Ian

Help is at Hand!

[ladyc]

Hi, I have 12 creditors two of whom are MBNA. I pay £253.95 monthly to payplan. The total debt is £83000. The amount owed in total to MBNA is £7701.
What do you suggest?
I don't want to go Bankrupt or I will loose my home.

[Jo Rolland]

How much equity do you have in your home?

Have you ever reasearched the possibility of an IVA?

Jo Rolland
Debt Alternatives
www.debtalternatives.co.uk

[ladyc]

Hi, I cannot get an IVA as my income is made up of Pensions and benefits. The equity in my house is realistically around £40000. There has been a similar property up for a higher amount for over a year so putting this figure on is more likely to make it saleable.


I think it unlikey that I would be able to borrow more as I already owe £130000 on the property.
My previous figure for MBNA was incorrect. I actually owe them £11533 out of the £83000.
I live in a bungalow as I am disabled. I am not up to giving it all up and going into a hostel.

[ianmillington]

I can understand your desire to keep your home. There are lots of questions that need asking, and a lot of answers will unfortunately beget more questions - a non-exhaustive list is :

How much equity (as asked)
Are any of the £83k creditors secured (presumably not). If not and you were attempt an IVA your other creditors would probably out-vote MBNA.
Do you have a partner? If so do you jointly own your home and does your partner have any debts? Does he/she have an income? Is the contribution you make based solely on your income?

As a general principle, without something more (eg the introduction of equity) I would have difficulty recommending an an IVA to you if your disposable income is only £254 with debts of £83k. The answers you give to the above questions (which I imagine Payplan must have asked you before they recommended the DMP to you) will give us all a clue as to what you ought to be doing.

Regards

ian

PS Sorry I started to reply before you issued your last post - hence I couldn't take into account your last posting. Your circumstances are not straightforward and it will be highly dangerous for you to rely solely on advice from this forum without any one of us having full knowledge of all material facts. You should seek a face to face meeting with an Insolvency Practitioner where your position and all your options must be fully discussed.

For a list of full-time Insolvency Practitioners near you could look here

http://www.insolvency-practitioners.org ... earch.aspx

Hope this helps.



Help is at Hand!

[ladyc]

Sorry I should have said, the debts are joint and my husband and I are receiving Occ Pens IB DLA and a small amount of Pension Credit.
Our income amounts to approx £2000 plus we get £500 per month towards our mortgage. None of the £83000 is secured debt.
Payplan has taken out all but £40 of our DLA.
We would be willing to put a little more and squeeze a bit if we were to feel secure and also see an end. At this moment of time our debts will finish in June 2035. I think we will be long gone by then.

[ianmillington]

It now seems clear that this will involve both of you.

Seriously I do think that you ought to be making an appointment to see an IP practising nearby so you know all the pros and cons of every option. There are things that you will be able to say in a private meeting that you might not wish to on a public forum such as this. Before you do so, get their confirmation that you will not be charged for the initial meeting(anyone who does charge is still in the dark ages).

At this stage I'm not convinced a DMP is your right option. Because of your specific circumstances it may be that sufficient of your creditors would be supportive of you entering into IVAs, but I can't be sure. There is the small dividend issue of course and also there is a general consensus that Insolvency Practitioners ought not be promoting IVAs for people predominently on benefits (the same argument applies for DMPs too)but your case might just be the exception to the rule. You need to fully explore this possibility. To ascertain this you will need a full, in depth, review of your income and expenditure and a breakdown of your creditors as a starter. Also, if your bungalow been modified in any way which would render it difficult for a Bankruptcy Trustee to sell, that might favour an IVA.


Hope this gives you food for thought.

Regards

Ian

Help is at Hand!

[MelanieGiles]

As Payplan also are Insolvency Practitioners, surely they can give you the all rounded advice that you need as they are already acting 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

[Adam Davies]

Hi
Good advice from Ian.
What is for certain is that your current DMP will take at least 25 years to repay and probably much longer than that.You are basically on a neverending treadmill.
I too would suggest a sit down meeting with an IP to discuss all avenues,IVA,bankruptcy,equity release etc etc
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[ladyc]

Thank you all of you. I have enquired re equity release but I don't think they are interested with such a small amount of equity and large mortgage.
I will speak to payplan but so far I hadn't been told about Charging Orders and had no idea that I could loose my home through unsecured debt. I've only learned about this stuff through these forums.
Both my husband and myself are mortified by it all.
I will have to ask for cards on the table,what are our options, I think.
Thanks again. Your support is invaluable.