Payplan DMP

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scaredycat

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Post by scaredycat » Mon May 24, 2010 8:39 pm
We entered into a DMP with Payplan last July. We have 18 creditors between us and because we have a lot of equity in our house and a large disposable income , this was our best way forward to repay
our debts. We are paying in £2872 monthly and are estimated to complete by March 2013.We have managed to stick to this although it has not been easy - we have had 2 parents' funerals and other quite major costs to see to but have managed to stay on track - although it has not been easy , but then lessons are to be learned and the most important thing is to repay what we owe.

Anyway , despite several emails to our case worker we are still waiting for 5 creditors to make a decision on our DMP -( on Justabank their status is "PENDING".More worryingly though, only 1 creditor MINT has frozen all interest , 2 - MBNA and HALIFAX - have reduced their interest , but the rest are still charging the full amount!
2 are catalgue debts which have been passed on to Debt Collection Agencies - they are no longer charging for defaults - but the rest are either charging the full amount as before or simply not sending any statements so we do not know what is going on. We have asked Payplan to chase this up for us and they do resend our Financial Stamement and request the interest be frozen or reduced , but we don't seem to be getting anywhere.
I am going to write to all the creditors myself and request they freeze / reduce the interest and send out statements. We have our annual review coming up, but I feel we have hardly chipped away at the debt because of the interest.
Has anyone any advice they can offer?
If we move to a fee paying DMP is there any likelihood that the interest would be frozen then?
Our creditors that have not frozen/ reduced are
AMEX
HBOS
HSBC
CO-OPERATIVE BANK
BARCLAYCARD
ALLIANCE AND GENERAL
NATIONWIDE
Thie first 5 are credit card debt and the remaining 2 are loans.
Any advice would be very welcomed.
 
 

scaredycat

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Post by scaredycat » Mon May 24, 2010 9:14 pm
Thanks, Helen,
It is just so frustrating - we have paid in over £30 K and have probably hardly chipped away at the original debt.
Still , there are always people worse off than ourselves so I will just have to get down to writing letters and hoping that our creditors will be "helpful"
 
 

Shining

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Post by Shining » Mon May 24, 2010 9:18 pm
Did you ever consider an IVA? All interest is stopped and the most you'll ever pay from your disposable income would be 100% of the debt plus IP fees? I do realise it's over 60 months but if your debt was cleared earlier the IVA would conclude earlier. No hassle from creditors and interest definitely frozen?

Having typed all that I now see you have a lot of equity in your property reading again...sorry I should have read correctly in the first instance.
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
 
 

hopefull1

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Post by hopefull1 » Mon May 24, 2010 9:59 pm
Hi

I have been on a dmp for 2 years now with cccs and I must be one of the lucky ones as all my creditors have frozen interest and charges from the off set and i never hear anything from them hopefully this will carry on. Have you been in touch with payplan and asked them to speak to your creditors about freezing interest.

Just a thought you are paying a high ammount per month they may not have stopped interest if you are not paying that much less than the contractual payment. If you don't mind letting us know the ammount you owe and the amount of equity in your property we may be able to help more and advice on the best soloution for you.

Hope this helps
 
 

kallis3

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Post by kallis3 » Mon May 24, 2010 10:12 pm
It may well be that an IVA wouldn't have been accepted as with the high payments, equity and the fact that it will be finished in less than five years, all debts will be paid in full.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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MelanieGiles

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Post by MelanieGiles » Mon May 24, 2010 10:56 pm
If creditors refuse to freeze the interest in the DMP, then you have good grounds to propose an IVA - even if this means that you will end up paying 100p in the £.

Of course there will be costs to pay on top - but you have to balance this against the ongoing interest that is racking up on these debts on a daily basis.

Interesting to see that the DMP company recommended by a lot of creditors cannot seem to get them to freeze interest, when the majority of commercial companies seem to be able to manage this eventually.
Regards, Melanie Giles, Insolvency Practitioner
 
 

scaredycat

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Post by scaredycat » Tue May 25, 2010 7:42 am
We owe in the region of £130K and have £180 K equity in the house.We were told an IVA would not be possible in light of this. We are also paying £214 per month ( within the £2800 odd monthly ) "Cover my Payments" to Payplan as no job is very certain in current climes!
I have contacted Payplan regularly since October requesting chasing up "slow" creditors and to push for freezing of interest and I get a standard reponse that they will forward my Financial Statement and that they can not guarantee that Creditors will freeze or reduce the interest.....
 
 

hopefull1

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Post by hopefull1 » Tue May 25, 2010 8:00 am
Hi

I would speak or write to creditors yourself I have heard that this can sometimes have more of an effect than your dmp company doing it. If you are not satisfied with the service that you are receiving why not look around and talk to a few companies even the ones you have to pay for. As you are already paying more out for a policy paying for a company to help you will not make your dmp last any longer. Are you sure that the cover you are paying for will actually cover the full dmp ammount if you were to loose your job if not it may be better to put this towards your payments. A lot of the time companies sell you policies and convince you that they are correct until you read it properly yourself and find it is exactly the way they said it would be.

God luck and keep us posted
 
 

wannabedj

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Post by wannabedj » Tue May 25, 2010 8:35 am
My girl friend is in a DMP with payplan and she's having the same problem. Not in same volume as scaredycat though. Only 1 of her creditors have frozen interest, the remaining 8 haven't. The payments payplan are making on behalf of my GF don't even cover the minimum payment on these so every month the debt rises. Numerous phonecalls, emails and letters have been sent but never get anything back (unless she's late making a payment).

Plus, I posted this on here a few weeks ago. A friend of mine completed his DMP (not with payplan) before Christmas. He was dead chuffed, after 5 years of graft it was finally over. Then he gets a letter off Loyds saying they have now decided to charge him the interest after it was originally frozen. Complete waste of time. He has decided to do what we all have done in the past and ignore it!
If Football was meant to have been played in the air then God would have put Grass in the Sky
 
 

MelanieGiles

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Post by MelanieGiles » Tue May 25, 2010 8:54 am
If the interest rate is around 15%, you are paying around £1,625 per month in interest before any capital is wiped off your debts. The DMP therefore could go on for many years.

Wouldn't selling your property and moving into rented accomodation be a sensible option to consider?
Regards, Melanie Giles, Insolvency Practitioner
 
 

Andrew Graveson

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Post by Andrew Graveson » Tue May 25, 2010 10:19 am
Hi scaredycat,

Creditors typically agree to freeze interest in a debt management plan as a concession to help people who can no longer manage the contractual repayments.

Given the size of your monthly contribution it would seem that the amount being offered to each creditor must be pretty close to the original contractual payment?

When this happens some lenders feel it is justified to continue to charge interest, albeit some will still freeze interest and others will reduce the amount being charged.

I cannot believe that after 18 months no response at all has been obtained for you from five of the creditors. Even if the response were a rejection this could easily be established by making the effort of a few short phone calls... at least you'd know where you stand.

Payplan seem like they will be doing very nicely out of charging £214 per month to insure a contribution of £2872. I wonder how much you would pay for a similar level of income protection in the open market?
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
 
 

MelanieGiles

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Post by MelanieGiles » Tue May 25, 2010 10:38 am
I thought that Payplan actually funded the cost of these insurance policies themselves?
Regards, Melanie Giles, Insolvency Practitioner
 
 

kallis3

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Post by kallis3 » Tue May 25, 2010 11:27 am
I think it's only the life insurance policies which they pay for, anything else you have to fund yourself as far as I'm aware.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
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Adam Davies

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Post by Adam Davies » Tue May 25, 2010 12:10 pm
Hi
I believe that both policy payments come out of the monthly contribution and are not free.
I know a provider that could cover your payments for approc 112 per month so you do seem to be paying over the odds.
What were your contractual payments to creditors before going into your DMP ?
Regards
Andam Davies
 
 

kallis3

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Post by kallis3 » Tue May 25, 2010 12:20 pm
Apologies, we've just looked at the proposal and it says it comes out of IVA funds.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley.
http://kallis3.blogs.iva.co.uk
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