It did seem expensive... there must be a pretty good profit margin there!
With a guestimated "fair-share" return from the creditors of around £3000 per year to Payplan (based on the monthly DMP contributions), and the insurance premiums of over £2500 per year that are being paid, I think scaredycat is in a pretty good position to expect and demand some incredibly good service.
Wow! £5500 per year for running a debt management plan!!
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
I wondered if any of the experts have any idea if dmps are going to be legalised and when this would help all people greatly who are choosing this way of solving their debt problems. I have been on my dmp for 2 years and all my creditors have frozen interest and charges long may it continue and they are all still with the orogonal creditors apart from i which is with a inhouse dca. There seems to be no consistancy with the creditors and it seems impossible to try and find any logical reasons why they freeze interest with one and not with others.
Regulation of debt management plans would not necessarily result in the automatic freezing of interest.
I have heard that there was much creditor resistance to the idea during recent consultations on the regulation of debt management.
The best hope for this happening is that it is imposed politically (in the interests of overindebted consumers who need some help) as is seems unlikely that the stakeholders in this industry will come to a consensus on the subject.
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
Just out of curiosity what did the creditors object to about the legalisation od these plans surely they would get more back than someone on an iva as part of the debt would not be written off just interest stopped and then they will get all their capital back.
I'm not sure that there will be consistency to that answer from all creditors.
I also don't think they really make the comparison with the return from an IVA... for the majority of people I'm not sure that there is really a genuine realistic choice between one or the other as either one solution or the other will be clearly more appropriate.
In general however I suspect they would like the autonomy to charge interest if they continue to feel it to be appropriate.
I'm sure that they also feel that a debt management plan, as an informal arrangement, is very different to an insolvency and that where a guarantee of interest stopping is required other options that ensure this already exist.
I don't want this to sound anti-creditor; we find that most creditors are very open-minded about making concessions where there is a genuine need and a genuine desire to repay debt as quickly as it reasonably can be. Creditor organisations that do this on a voluntary basis deserve some credit.
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
Thank you for your response. In my case I feel that my creditors have acted very fairly towards me but this isn't always the case. I could have gone down the iva route but chose to do a dmp as i want to pay as much back as I can and at the moment my creditors are making it easy to do so. In the future it things do not go to plan i have not ruled out an iva but would prefer to carry on with this debt soloution I have chosen.
I wonder what the same creditors would say if my fees were £3,000 per year and I provided insurance which cost £2,500 within the framework of an IVA! At this rate, and IVA would produce a quicker and securer return for creditors - through savings on "fees" alone.
I have just written to all our creditors to ask them to freeze the interest - will see what the response is.Renting is not really an option as there are few suitable properties around here and I do not drive, also we only have a few years left on our mortgage. So we could pay more into a DMP once the mortgage is finished.
Let's just keep fingers crossed and see whar will be .... I can not afford to be as stressed as I was last year about it all. Many thanks for the input from you all. I will continue to plage Payplan with my many questions.
You should not have to do this when you have a professional company working for you who are funded by the creditors. I can sense that the very reputable commercial companies who regularly post on this forum bristling as I type.
I agree with you Melanie , but feel I need to prove I am doing as much as I can to repay the debt and that we are doing all we can to do so as quickly as we can.
I too hope that your personal intervention helps though it seems unusual that you find yourself in a position of having to try this.
The situation is a little unusual due to the relatively high debts and monthly contribution levels.
We have been working with a client for a couple of years where the debts totalled near enough £140000 and the monthly contribution is in excess of £2000. Creditors have either proactively, or with a little prompting, agreed to freezing interest or at least making concessions. It's a pretty wide spread of creditors.
I'm sure that most other commercial operators and free operators would be able to report similar cases.
Payplan will be doing very nicely from your case and I think you have every right to expect good progress to be made on your behalf. If you feel that it isn't, a move to another free provider or a commercial operator, accompanied by sourcing cheaper insurance (see Andy's comment previously), might benefit your situation. In switching, the agreements that are already in place could be maintained, with some fresh impetus being added to getting an arrangement in place with the non-responders.
Andrew Graveson
Bright Oak Ltd
UK Debt Management Company
Website: www.brightoak.co.uk
Thank you Andrew.
I have just organised my first annual review for next week. One of our creditors phoned this morning - at my request as it seems there was a hiccup our payments were being eturned! All resolved amicably. I took the opportunity to query by balance as we no longer received statements from them - they had been passed on to RMA Resolve - and to request interest be frozen. I was duly informed they did not know my balance and that I had to contact AMEX who in turn informed me they did not reduce or freeze interest which was currently 24.9%. I feel very sick and totally depressed.