Payment Plans

[AC1975]

Hi can anyone be kind enough to let me know that if I enter into informal voluntary payment plans with some of my creditors will that prevent me from seeking a formal debt management plan or an IVA at a later date?

Thanks in advance!

[Skippy]

Hi and welcome to the forum.

No, if you enter into a DMP with your creditors this won't stop you from changing to an IVA later on.

Is there any reason that you don't want to consider an IVA straight away?

BTW I love the quote from Blackadder!

[AC1975]

Thanks. Blackadder is my favourite comedy of all time, never ever fails to make me laugh. Something that is an asset during times of finanical problems. Anyway I can't consider an IVA straightaway because I need to open a Co-Op basic bank account and transfer my monthly salary there (waiting for passport renewal before I can do that). The reason I need to do that is that I have £7000 overdraft with another bank and I'm assuming if they get wind of impending iva etc they may keep my salary! Including the overdraft I owe around £20k and could pay £350 a month for the next 5 years. I'm also worried that if the IVA offer is refused(im assuming that is more likely to be refused than a debt management plan)the creditors could apply for ccjs...

[size5]

If £350 is a true reflection of your disposable income, and I assume you have taken professional help on this, hopefully from an IP firm, then like as not creditors would prefer the informal DMP anyway as you could clear your debt through a DMP in around 5 and 3/4 years, assuming interest freeze.

Do take time to seek 2 or 3 opinions before you proceed though.

Regards.

[AC1975]

many thanks. I haven't spoken to anyone yet about this, just gathering the very useful information from this site (the site and folk here are a godsend).

I'm keen on clearing my debts fully and would prefer the DMP route as long as interest is frozen. I was thinking of contacting the CCCS as Halifax said they won't consider any long term debt management plans without a proposal from them (currently been placed on a 3 month payment plan).Is this correct? Just a couple more questions

a) once I open my new bank account and transfer my salary there and cancel all direct debits should I contact Natwest straightaway and explain to them what I'm proposing?

b)What would happen if any of my creditors refused a reasonable DMP? would that reflect badly on them if they applied for a CCJ? Or is it unlikely for them to refuse a fair DMP in light of the fact that they could be paid a lesser amounts if I went through the IVA process?

[size5]

What Halifax have indicated to you is their preferred way for you to go, i.e an organistaion that is funded by creditor donations. They have no recourse in law to refuse payments made by a 3rd party on your behalf, as long as that payment can be proven to be fair and reasonable.

There shouldn't be a need to contact Natwest, your chosen provider will do that for you.

Creditors are generally very reasonable in accepting DMP's for the very reason you have indicated, i.e they get their money back, albeit over a slightly longer period. If it didn't work, which is unlikely, then I am sure your provider would then be more than happy to look at an IVA for you. However, as you have not taken advice as yet, then I recommend that you do as soon as you can, I often find that many people inadvertently exaggerate their ability to repay in a noble attempt to play fair with their creditors. If you therefore commit yourself to something unaffordable then it won't do you much good in the long run, so a professional pair of eyes to look at things for you cannot be a bad thing.

Regards.

[AC1975]

Size5 many thanks for all your help and the valuable information! Much appreciated!

[size5]

My pleasure, post any time if you have any further questions.

Regards.

[kallis3]

Just to add a little to this, I did a DMP for 18 months and then changed to an IVA with no problems at all.

[AC1975]

I haven't contacted CCCS/Payplan yet as I wanted to have the basic bank account set up (now set up) as well as wait for after my payday next tuesday(bank is one of my creditors). However I have had contacts with one of my creditors and informed them I'll be making reduced payments next week and that I was seeking a DMP. they have been fine and have set me up on a temporary 3 mth debt management plan with reduced payments on 2 cards and one loan. I have a few questions for the learned and generous here

a)will it cause any problems if I pay the reduced payments next week but the actual cccs payments I am seeking to pay them will be half that amount. Or should I insist that I can only pay £50 from the offset? Will the higher amount bind me on some way? The reason that I want to pay them the higher amount is that it will buy me more time before they get more aggressive).

b)am currently on a personal dmp with rbs paying £100 per month on a card. I missed last month's payment (have made 10 monthly payments already). Will a default on an exising DMP make affect the likelihood of them accepting a DMP from CCCS?

c)I have 2 cards and one personal loan with a creditor but they are dealing the loan and cards separately (with 3 contacts). For administrative purpose, can I/CCCS not ask them to combine the 3 loans into one and have one contact point?

d)I have 3 payday loans which i intend to pay off on the 28th October (i dont want these to be added onto the DMP as they tend to get the most aggressive when they clock on about the DMP. I would rather keep these hidden from DMP and pay them off in one go through family help - not big amounts). Is this a bad idea? Can other creditors find out about these payments?

Many thanks