Change DMP Company?

[kallis3]

I think a lot of us feel the same!

Glad we have been able to help, any questions we're here to help.

[Andrew Graveson]

Hello mumofthree,

Bright Oak isn't open over the weekend but if you sent an enquiry a response should have been forthcoming today.

You are right about fees; £15 is certainly a very competitive fee from the company you mention. Most debt management plan companies do not feel they are able to provide a quality service for fees set at that level though of course that does not mean necessarily this would be the case for you (and I do hope that it doesn't).

A lot of debt management plan companies set minimum contribution levels for DMP's to avoid this issue of a very large percentage of a monthly payment being taken up by fees. I believe that the "free" DMP providers also apply minimum monthly payments for a case to qualify for their services.

Are you being charged an upfront fee by the new debt management company? This could cause significant issues with previous creditor agreements being cancelled if payments stop while an initial fee is collected.

You also mention that there are a couple of joint accounts which, as they are included in the IVA, you assume will have interest frozen on them. That's not necessarily the case. Certainly you will have no further liability for any new interest if your IVA completes properly, but a partner in a DMP may see interest continue to be added. I'd suggest that you verify whether or not your partners liability is subject to ongoing interest or not.

In common with other comments on this thread I think self-managing is worthy of consideration during the period that a relatively modest debt management plan payment is affordable.

[Bridgewood]

Hi mumofthree,

I only just noticed your posts because, as Lesly_ mentioned, we don’t spend too much time on here at the moment.

I’m not familiar with your particular case, but hopefully we managed to answer all your questions and put your mind at ease when you spoke to us the other day. You mention you’ve gone for a DMP, if you do have any further questions or concerns when the paperwork arrives please don’t hesitate to give your personal financial consultant a call and I’m sure they’ll answer everything for you.

We are also totally confident that we will provide an excellent service to you, even at only £15 per month fee. Our whole proposition is built on the basis of not overcharging for our services, aiming to provide ‘Low fees. Great service’

As Andrew mentions some debt management companies have minimum contribution levels to avoid taking too high a percentage in fees, however we feel this could exclude some lower contribution clients who don’t feel confident approaching their creditors themselves. Of course if they are happy to do this and don't want to pay a management fee we wouldn't suggest otherwise.

For the sake of complete transparency, our standard DMP fee structure is:

1 month’s contribution as a setup fee, with a maximum setup fee of £500 (anything paid above £500 being distributed to creditors in month 1)
15% of on-going contributions as a management fee, with a minimum of £15 and a maximum of £75

[kallis3]

That's pretty good - when I was in a DMP we paid £113 per month on payments of £650 a month.

[Bridgewood]

Hi Kallis,

So circa 17.4% which is pretty common amongst DMP companies, but does feel a lot when you stop and think about it.

Did you also pay 2 months contribution as a set up fee, and was it capped each month or the full £650?

[mumofthree]

Bridgewood .. I am returned the papers today. As stated it is a change of company as I feel that £35 out of the £80 I was paying is a tad too much! At least going with you I get to give the creditors an extra £20 per month along with contributions from my IVA.
Bright Oak .. the creditors on both my IVA and husbands DMP have frozen the interest.
So difficult to know who to go with as there are so many companies out there. thanks all for replying x

[Andrew Graveson]

I'm glad to hear that mumofthree.

Best wishes with everything.

[kallis3]

Hi Bridgewood.

We did the DMP for 18 months with Hamilton Locke and paid no setup fee from what I can remember, the payments and charges didn't alter.

We only changed because the length of time would have been too long and we thought that going with Payplan would mean the creditors got more. It was them who suggested we did an IVA.

[Bridgewood]

Hi Kallis,

Thanks for getting back to me. Certainly interesting because normally Hamilton Locke (based on their current terms aleast) do take the first two months payments as a setup fee and then 17.5% each month as a management fee.

Scary to think but if someone in your situation was charged that it means from the initial £7800 paid in their first year only around £4250 would have been distributed to creditors with the rest going on fees!

Glad you got it sorted though and were suggested to do the IVA, can see your over half way through now so not long until you are completely debt free.

[Bridgewood]

Pleased to hear you had no concerns with the pack we sent Mumofthree.

Did you initial speak with a gentleman called Robin when you called?

I'll make sure we give you a call as soon your paperwork arrives in to ensure the swap from your current company to us goes as smoothly as possible.

[mumofthree]

Hi Bridgewood,
Yes it was Robin. Ive posted the documents today, so hopefully you should have them tomorrow. Current company just had their £80 on the 1st.

[kallis3]

Hi Bridgewood,

We had no complaints about Hamilton Locke, our only gripe was that we could have been in an IVA much sooner and be almost finished!

[MelanieGiles]

Not sure I understand the maths on the post about your DMP Kallis, but now you are in an IVA I suppose it is pretty irrelevant.

[kallis3]

I suppose it is. We paid £650 a month and of that £113 were fees to the company. The rest went to the creditors.