A reader asked: I have a Debt Management Plan where I still owe 17k to 10 creditors. I have been paying for ten years at £150 a month, so it will end in about 8 years. Most of the debts have gone from my credit record but a few are marked as “on a DMP”. I want to pay off the debts and improve my credit rating. I have been offered about 7k by a relative, so I could offer all my DMP creditors … [Read more...]
You may prefer to look at Debt Camel's Guide to DMPs. That has links to the most important articles, covering DMP advantages and disadvantages, the different ways you can set one up, things that can happen in a DMP and how to decide if one is the right option for you.
DMPs can be useful if you have a temporary financial problem for a few months or a year or two, or as a long term way of clearing you debts, but you need to be wary of DMPs that will go on for too long.
A typical payment arrangement is an agreement to repay a credit card, catalogue or loan in affordable monthly amounts. This is also called an arrangement to pay. The key points are: an arrangement is needed if you can't afford the normal debt repayments; do not offer more than you can afford; ask the lender (or the debt collector) to freeze interest and not add any charges; it … [Read more...]
If interest is frozen on your debts, you will be able to pay them off much more quickly. But what if a creditor refuses to do this? Or has been adding interest and charges for years, even though you are in a DMP or they know you are in financial difficulty? This article has template letters you can use to ask the creditor to change their mind and stop adding interest and charges. And to ask … [Read more...]
A reader asks: Help! I have just been made redundant and I don't know how I am going manage, especially as we have debts. I'm only getting a few weeks redundancy pay. What should I do? Every week in 2018 seems to bring more news of shops and other businesses closing down. And it's not just the big names like House of Fraser and Carillion - when one firm shuts, its suppliers and small local … [Read more...]
On 11 April the Harrington Brooks/One Advice group of companies were put into administration. They are a major commercial provider of debt solutions and the same day it was announced that their clients were being transferred to two Think Money brands: their Debt Management Plan (DMP) clients have been transferred to Gregory Pennington Ltd; their Individual Voluntary Arrangement (IVA) … [Read more...]
Setting up a Debt Management Plan (DMP) is a great way to escape from payday loans and then you can also ask the payday lenders for refunds by making affordability complaints. But what if you are already in a DMP? Here you can still make affordability complaints. This article looks at some of the questions people have about this. Should my DMP carry on paying a lender if I complain? Yes. It's … [Read more...]
A reader asked if it is OK to reduce your debt management payments when you need to? This is a common problem for people in Debt Management Plans (DMPs) in 2017: inflation is at a four year high, fueled by the weakness of the pound after the Brexit vote, which increased the price of imports; Britain is in the grip of a pay squeeze, heading for the worst decade of income growth for over … [Read more...]
What happens if you inherit money when you are in debt management or one of the three forms of insolvency: Debt Relief Order (DRO), bankruptcy or IVA? The answers are surprisingly different... Inheriting in a DMP This is the easiest case. Any money you inherit comes to you, not to your creditors or your DMP firm. It doesn't matter if the person dies before your DMP started or during your … [Read more...]
It is common where a couple both have debts for a interlocking IVAs to be proposed. The couple may think of this as being a joint IVA but legally it is two separate IVA agreements with a single budget - income and expenditure - and a single monthly payment being made. That may work well, but it's important to look at each person as an individual as well. There is no reason why both partners … [Read more...]
A reader has asked how Full & Final settlements (F&Fs) would affect her credit rating which is currently looking good as her debts were all defaulted and have dropped off her credit record. A full and final settlement happens when the creditors agrees to accept an amount which is less that the total owed to settle a debt, and agrees that the debtor will not be pursued for the remainder. … [Read more...]