Last year we faced up facts and realised we had to sort out our debts, took lots of advice - not all of it good! - and are currently in a DMP with Payplan.
Anyway ,we have our first annual review tomorrow so have been looking out paperwork , preparing any amendments to our I and E , etc. Although are wages have gone up , so have day to day living costs and we can manage to put an extra 50 - 60 in the DMP pot every month.
Then I decided to work out exactly how much we had paid in and what effect this had had on our huge debt. Although we have paid in about £31k our debts have only dropped by 18 1/2 k because only a couple of our creditors have frozen / reduced interest. We have 18 creditors - I wrote to them last week after having requested several times that Payplan contact them to try to get it frozen/reduced.
Our estimated date of completion is March 2013 , but at this rate it will be another 5 years from now I guess.
Anyone any ideas - an IVA is not possible because of the equity we have in our property . Also we could not sell go into rental because of our age - early 50s - and the lack of rental property in the local area.
Any advice warmly received,
Last edited by scaredycat on Thu Jun 03, 2010 1:03 pm, edited 1 time in total.
It may be worth contacting a commercial DMP company. While you would be paying a fee, the commercial company would be more active on your behalf in stopping interest. Some so called debt charities do not seem to make much effort to get interest stopped and given that they are paid commission for collecting debts for the banks, they may not be that bothered how long the DMP lasts.
Andy Davie is an expert on DMPs and I would suggest you speak to him.
Off the top of your head ,would you have a rough idea of what one such company would likely charge in terms of percentage of the amount paid monthly? We are currently paying £2858 monthly but of that £214 is "Cover my payments".Many thanks,
To be honest I am not sure. Some companies charge 10-15% management fees but with your level of contributions it should be possible to negotiate a set fee or a cap. However, even 15% is just over £5,000 which is a lot less than you have been charged in interest and charges while using a 'free' service.
The 'cover my payments' thing seems a bit odd if your jobs are secure and does seem high. I have also found that many of these policies do not cover pre existing conditions or the self employed so it would be worth looking at the validity of the entire policy to see if it would be better to just have the same amount paid off your debts.
Thank you again - we just want to repay what we owe asap. If we were to move to a commercial company, would we "lose" any time - and more importantly do you think they would be in a stronger position to get interest frozen /reduced?
Hi
I think given the fact that you are paying 214 per month to cover your payments you should be able to find a commercial company that can recommend insurance cover and cap their own debt management fees so that the amount you will be paying each month in total will mean that your creditors will be receiving the same amount each month that they are receiving now, with the added benefit of someone working for you rather than for your creditors
Regards
So effectively Andy, a commercial DMP company such as your own could potentially save enough from the policy to cover most if not all of your management fees? Sounds like it is worth considering.
ScaredyCat. I believe that commercial DMP companies do offer a better service when it comes to getting interest and charges stopped. At least when you are paying for a service you can complain if it is not done. Using the so called 'free' sector means they can wash their hands of it and say 'what do you want for nothing'.
I think that there are some commercial companies out there which cap fees at £100 per month - but with a very competitive market out there why not shop around after all the difference will be money which will reduce the capital that you owe to creditors.
Great advice above, on a completely different note if you are paying almost £2858 a month with a mortgage on top and bills then I have to congratulate you both on what has to be amazingly paid jobs. If you're looking for staff my fiance would jump at the opportunity hahahahaha
Thank you all for your advice - we had our first review this morning and are able to up our contributions by £50 a month. Our new Financial statement is being forwarded to all the creditors and they will be asked again to reduce/freeze interest. Interestingly we had two letters from our creditors this morning - both confirming they would freeze the interest. Here's hoping some more of the others will follow suit!
Dave.sr - our jobs are not that well paid - we have just cut back to the absolute basics in an effort to repay what we owe.The prospect of settling our debts is driving us - not to mention the amount of spare cash we wil be able to direct to our pensions!
Last edited by scaredycat on Fri Jun 04, 2010 7:39 pm, edited 1 time in total.