DMP beginning ...what should I expect?

A question about : DMP beginning ...what should I expect?

Hello

I thought I was over the worst having set up a Debt Management Plan and Step Change told me all my creditors were big institutions that they had dealings with and recognised them.

I have debts of about 28K with a plan to pay back over 9 years.

The first piece of correspondence I have had is that Halifax (0 per cent balance transfer about 10 months ago) have rejected the offer.

I am now imagining the others will all do the same especially as I have read here that Halifax and Nat West are not particularly unhelpful.

I naively thought that once Step Change wrote to them all my troubles (or at least the worst of the stress of sleepless nights) would be over. Obviously they are not - times are very tight but I am not getting further into debt with the cards.

So I am less than a month into this and don't know what to expect. Is it a good thing if the debt gets sold to a collection agency?

Do the banks/credit cards not always agree to freeze the interest?

Any advice or anecdotal experience would be appreciated.

Best answers:

• Hi,
  Don't be disheartened by this, its par for the course, creditors often reject payment offers at first, just keep making your payments and they will all fall into line eventually.
  As long as you have shown you are paying all you can then there is no need to worry.
  What you may find happens, is that if a creditor is not happy with your offer, they may at some point sell the debt on to a DCA.
  This is quiet common, all you need do if this happens, is pass any letters you get on to SC, and they will deal with it for you, ie, they will just start paying the new creditor instead.
  Think of it as a dance, and the negotiations are all just moves within that dance, then forget about it, and get on with your life !!!!!!
• Thanks for this. I've been putting it off for six months hoping I could turn things round. On your quote you say "Total debt at LBM - Ј54,000" what does that mean please?
  Thanks again
  Okay got it now...Light Bulb Moment.
  Doesn't feel like that at the moment I must say.
• Hi Danny,
  Creditors donot have to freeze interest but most probably will. Halifax passed me to a dca very quickly, defaulted and interest stopped so all good. Natwest have frozen all my interest and I have a third of my total debt with them so fingers crossed for you. Pop over to the dmp mutual support thread for a read from lots of people in the exact boat that you are. Feel free to ask any questions there is usually someone around who will know the answer.
  Puzz
• You can expect a whole load of letters from your creditors threatening this that and the other. Some will contradict others and all are best either passed on to SC or ignored. If you get calls, give them your SC plan number and ask them politely to deal directly with SC as your agent. Try not to worry too much. At first they will try to scare you into paying. If you haven't got it, they can't have it and as you have taken the positive step of going to SC, there is very little they can do.
  My main piece of advice is not to pay too much every month. You credit file is going to be ruined for at least 6 years so it's best to get all the accounts properly defaulted and recorded as such on your file. That way they will disappear from your file 6 years from that date whether paid off or not. We have found that if you pay too much, especially to BARC, they will record AP markers on your file and never default it. This means your file is ruined for 6 from the date you settle the debt.
  Also, if you pay less, you are much more likely to get a better settlement offer down the line. If you have spare, save it up in a high interest account for that day.
  You might also want to look into whether your debts are enforceable, especially if they were opened before 2007. Again, if they haven't got all the legals right, you can push them for a low amount to settle the debt. Plenty about that on this forum if you search (try searching for CCA Request).
  Good luck.
• what are AP markers please and how i cannot find the DMP thread.
• AP stands for Arrangement to Pay. If your DMP is going to be long, it's better to have defaults marked as they will drop off after 6 years.
  Less than a month in, all you should do is sit back and see how things pan out. If after six months creditors aren't freezing interest, you could write and ask them to reconsider, but there is no point in thinking about that at this stage.
• Danny - DMP Thread's here:
  https://forums.moneysavingexpert.com/...thread&page=39
  I'm glad stepchange have helped you.
  [My siggie relates to CAPUK - much-praised by Martin. No personal experience but I do things like this with others]
  You can really look at cutting down in all sorts of ways, via Old-Style boards on mse and posting up an SOE, so people can help with cost-cutting ways. You'll be surprised and heartened by how quickly you get into OS ways.
  You will get there. Well done for this start.