I have setup this blog to hopefully record our progress through our Debt Management Plan (DMP) and our journey from debt to debt-free.

If you have any questions then please let me know however if they are financial questions then can I suggest you speak directly with a free debt management company.

I am recommending the Consumer Credit Counselling Service (CCCS) as I have found numerous forum posts and success stories from people who have been where we are - all the information I could find about the CCCS was excellent and they come highly recommended.

I shall be updating this blog regularly with any information/letters/phone calls I receive from both the CCCS and/or my creditors to hopefully give you some idea of the process involved in a DMP.

I hope this site proves helpful.

Thursday, November 26, 2009

The start of our journey...

After much pondering and worrying about our options I decided to complete a Debt Remedy on the CCCS website.  This requires you to supply some pretty basic financial information such as how much you have coming in and how much you have going out each month along with the balances of your debts.

From this, the site works out your options and presents you with them.  We had the choice of an IVA or a DMP.

An IVA is very strict and can last from 2 - 5 years and is a legally binding agreement.  A DMP is an informal agreement between you and your creditors which can last until the debt is repaid (although normally not more than 10 years).

In a DMP your creditors are not legally required to accept your DMP or to stop/reduce interest and charges on your account however a lot of them do.  For more information look at the CCCS website (a link can be seen in the Useful Links section to the side).

I had my Debt Remedy filled in and simply clicked on the button to proceed with the DMP plan.  This wasn't the first time that I had completed the Debt Remedy only to decide that I could sort my debt out myself - I was wrong.

After a few days I recieved some paperwork from the CCCS in the form of a DMP agreement form to complete and send back with various supporting documents to prove my wifes and my earnings and also copies of statements from our creditors.  The CCCS had calculated that we could afford to repay £547 towards our DMP each month and that the DMP would take a minimum of 9yrs and 7 months to complete.

One of our creditors is a bank who we also use for our current account and so it is recommended to open a new basic account with a bank to whom you have no financial connections - this is so the bank can't suddenly take all of the money out of your account to cover the debt you owe.

Because of this I had to wait for a week while I got another account set up.

I opted to go with The Co-Operative Bank.  Most basic accounts are the same (no overdraft and no cheque book or cheque guarantee card) however quite a few only provide you with a Solo or Electron card which isn't accepted in a lot of places.  The Co-Operative Bank offer a Visa Debit card (this is NOT a credit card) and so this swung it for us.

I now have my bank account open and am just waiting on a Direct Debit/Standing Order switching form to allow me to move my direct debits from my existing bank to my new bank.  It's worth noting that when you start a DMP the CCCS recommend that you cancel all existing direct debits with your creditors - see the CCCS webiste for more information.

Today I have cancelled my creditors direct debits and posted of my Notification Of Debt Management Plan letters.

I'm now just waiting on my wife to get her hands on proof of earnings from her employer and I can send of the DMP agreement form to the CCCS; My DMP is due to start on January 1st 2010.

Further update as and when they happen so please bookmark this page and check back regularly  :)
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