www.iva.co.uk

Hi all.

Over the last few years my debt has gotten out of control. My o/h has lost her job and we relied on credit to live. I now realise I have to do something about this.

I have found out that CCCS get 11% back from creditors. Now, why would the creditor that. Also, why do the creditors tell people to use the CCCS. I do not trust the banks, I never did and I never will. I think they must have a deal whereby the creditor doesn't freeze interest and charges and the CCCS doesn't ask them to. If this is the case it can change the repayment period considerably and makes me think I may be better using a paid for debt management plan company.

My debts are £25K and I can afford around £400 per month.
Assuming the CCCS do not freeze Interesta nd charges and 18% P/A is still applied. I did the calculations. If CCCS do not get interest and charges frozen I will pay approx 182 months totalling £72,800. In turn the CCCS will get £8,008.

Now let's look at the paid for Debt management plan.
Assumptions here are that a charge of 15% per month and 1 month setup fee. There are a number of companies offering this. I also see that a lot of people claim that interest and charges are frozen after 6 months.
The debt management plan would last 81 months, I would pay £32,400 and they would receive £5,200 for managing it.

So if this is the case and I do go for a paid dm plan I would pay £40,400 more to the CCCS and my plan would last 8 years longer.

I realise that this is predicated on a number of assumptions so I need some help.

My question: Has anyone on here actually had interest and charges frozen by the CCCS? I do not want answers from anyone associated with the CCCS just clients please.

Help me to make a decision at this crossroad in my life. I do not trust the banks and I know there is no such thing as a free lunch.

Thanks in advance for your help and sorry for the long message,

Boomer

Hi Boomer - welcome to the forum - someone has been doing their maths! You do not mention IVAs at all where interest is frozen? Best thing you can do is speak to other companies as well as CCCS to look at all your options and understand the facts. As you say - you have an important decision to make at this crossroads so make sure you make the right one.

Agree with Tina - you should explore all of your options and the best place to find companies who will do that with you can be found via www.iva.com

Give one or two companies a ring for some free advice.

Tina,

Thank you for the reply. I am making decisions here at the moment. I don't really want to do an IVA but I appreciate this is an IVA forum. I just want to avoid people trying to force CCCS down my throat. I do not believe that free means better. On the contrary. I think the relationship that the CCCS benefit from with the banks also makes them less likely to be impartial. I know the advisors on here are actual advisors and not just people with an opinion.

I particularly want to hear from anyone with experience of debt management paid or unpaid. I would be interested to know if they are getting debt frozen.

Boomer

Hi there. Unless there are compelling reasons, or the debt is likely to be paid within 5 years, a DMP is not necessarily the way to go. It is an informal arrangement which doesn't, as you know, guarantee anything!

As Tina mentions, it might be worth looking at an IVA, which is over a fixed term and the repayments are worked out on your disposable income.

As suggested, speak to a few companies to comare advice and see who you feel more comfortable with. A good firm will run through all alternatives with you.

Another pit fall with DMPs is that, even if you strike lucky and all of the creditors freeze interest and charges initially, they have a habit of selling toxic debt on and the new owners might not want to adhere to the agreement.

Hi Foggy and Kallis,

I have done the sums. I can nearly afford my debts in full over 5 years.I do not think an IVA is right for me. I am specifically after dmp experience here.

Boomer

That's providing that your creditors freeze interest and charges over the whole period which is by no means guaranteed.

Boomer, I was in an IVA and I joined this forum a year ago, after great advice from the usual suspects on this site, I clearly got to fully understand all the benefits with an IVA. I would really recommend an IVA because I have been in one and completed and my debt was close to what your's is. Good luck what ever you choose to do

Lee,

Who did you do an IA with?

B

Anyone here. Everyone has left me. If an IVA is an option for me who do you recommend?

I went with the personal debt help line, Ian Millington was my IP and he as great, he was really helpful

* They are based in Manchester, but there are loads of IP's on the site, Melenie Giles etc

Hi I got my IVA accepted last thursday the thought of it turned my stomach but fingers crossed in 6 years I will be debt free still with my house? I used Mel Giles and she was so understanding, professional and turned my life around...up to you but what does a conversation with her cost you? good luck!

Speak to a few companies via the link I posted earlier or click on the 'Ask a Question' link on the lefthand side of the page and speak to one of the companies that post on here.