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 11, 2010

HSBC response to CCCS

We had a very weighty pack from HSBC over the weekend regarding our debts with them and CCCS.

the CCCS had written to them with a combined monthly payment for 2 overdrafts and 1 credit card of £130.54p.

HSBC wrote to us and basically said that they would accept the payment in the form of us taking out a loan to cover the debts we had.  The loan would be over 80months and would be for just over £8k and would cost us just over £10k to repay with an APR of 7%.

I thought this was pretty good!

Our current overdrafts are changed at something like 18% APR and my wife's credit card is 21% APR!

I spoke with the CCCS this morning who suggested that we didn't take out the loan due to the interest being changed.  I pointed out that HSBC are entitle to continue charging us at the current rates while also charging us at least £25 a month on one of the overdrafts which is over the agreed limit!

The guy said the best thing to do would be to scan the offer from HSBC and email it to them and then call back in 2 days time when they have had a chance to have a read.  He said normally the would hope that thhe bigger lenders wouldlsimply stop interest and charges however this is not set in stone.

The other benefit of taking out the loan would be that for the next 80 months (6 years) we would have a good credit record rather than another creditor logging non/late payments.

I'll let you know what the CCCS say when I speak to them however I am very much of the opinion that HSBC are being as fair as they can while also enabling them to make some kind of profit.  I'm not opposed to my creditors making a profit at a fair rate (keep in mind at present the current Bank of England base rate is 0.5%).