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.

Monday, January 18, 2010

CitiBank refused DMP & Managed Loan offer from HSBC

Over the last week I've had 2 letters regarding my DMP.

The first was from HSBC who agreed to accept the reduced payment offer from CCCS providing we signed up for a Managed Loan @ 7%APR for a duration of 80months.

I was happy with this offer as we are currently paying approx 20%APR on our outstanding credit card and overdrafts.

I sent the details to the CCCS who advised me not to accept the offer though!  They explained this as saying that in their experience HSBC would pass the debt on to a debt collection agency (DCA) who would more than likely accept the offer and would mre than likely stop any interest or charges.  Far from me to question CCCS who have a wealth of experience in these matters so I did not take up the loan.

The other letter was from the CCCS themselves who have advised us that CitiBank have refused to accept the reduced payments.  The CCCS advised that they would continue to make the reduced payments anyhow but that CitiBank would also be likely to pass the debt on to a DCA.

The above is a little stressfull as we wanted to avoid DCA's in general as I'm not sure what their powers are in terms of recovering debt - but I guess we'll find out eventually!

That's it for now.  This is the first month of our DMP and so far cashflow has been so much easier.  I've opened a savings account where I can put asside the money for eveything that was agreed on the DMP such as £20 a month of car tax etc and so far it looks like being the first month in a long time that we will actually have stuck to our budget!

Next update as and when I hear anything.