Author Topic: Payplan Problem  (Read 3707 times)


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Payplan Problem
« on: Nov 18, 2010, 01:10:08 PM »
Hi Sorry if this has been covered before,
New to forum and like many other users on here it’s good to read and see how other people have managed to take the path to clear their debt.
3 months ago we work out all over credit card bills and overdrafts and the amount came up to 45K. Both myself and my partner are both in full time work and we were paying off all the minimum payments which were coming through the door but like many others worked out that out of the whole amount we were paying for actually only around £20 of a £160 payment on one credit card was actually going towards the balance and the rest was on interest.
We looked into remortgaging but this was not an option as we did not have enough equity in the house to cover the debt owed.
After looking on various forums and speaking to people we decided to go with Payplan as a lot of forum users have used Payplan and this was the company which was most favoured.
We decided to opt for a DMP with the view of hopefully getting Payplan to speak to the banks/credit companies we owed money to and freeze the interest so that we could be debt free in around 6 years.
After all the paperwork was sorted ie - financial plan and outgoings etc to Payplan, this left us with a clean £1000 amount to be distributed around 6 creditors - Lloyds overdraft / Egg Loan / Egg card to name a few.
It has now been 3 months and a financial proposal from Payplan has still not been sent to any of our creditors?!?
The reason being is Payplan could not obtain a balance from one of our Lloyds credit cards, and until this has been achieved, Payplan will not send out a financial proposal to any of the other creditors. Meanwhile even though our £1000 has been distributed among the creditors we owe, they are still ringing us and sending letters asking why we are not paying the full minimum payment each month.
Spoke to Payplan again yesterday and they said they cannot do anything until they receive a balance from Lloyd’s credit card. Spoke to Lloyds today and they will not contact Payplan to give them a balance they want Payplan to ring them!
So we are lost as what to now do.
We went with Payplan to sort out our debt problem as we didn’t want to stick our head in the sandbox and wanted to pay what we owed if Payplan could get the creditors to freeze the interest, but now it seems we are in a worse off position then we were 5 months ago.
Payplans response to this problem, when we said we were receiving letters from our creditors now demanding full payment or a some form of financial proposal or they will have to turn the account over to a debt collecting agency – Payplans response was ‘this will be better as they are easier to communicate with’.
Sorry for the long thread, but just wanted to know if anyone else out there has had a similar experience and what did they do?
Also thinking about going into a DMP alone, and using the templates from debt websites but is this a good way to go and do the credit card lenders/banks see this as an easier option to say no we won’t freeze your interest and help you out??
Any help would be greatly appreciated.   :(

James Falla

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Re: Payplan Problem
« Reply #1 on: Nov 19, 2010, 12:25:30 PM »
Hi there steven4589
Sorry to hear about your experiance with Pay Plan. Generally speaking I hear that they are reasonably good at setting up debt management plans so I am not sure what is going wrong. I would point out that if you are paying £1000 a month towards your creditors, Pay Plan will be receiveing a good return from the creditors. My understanding is that they get 8-10% of everything they collect which is £80-£100 a month so I feel you should be getting better service.
If you feel that you want to go it alone, there is nothing to stop you doing that. You can just cancel the payments to pay plan and contact your creditors yourself. Interms of getting your creditors to freeze interest, basicaly if you do a DMP, they are not legally obliged to do this whether you do the plan yourself or go with a debt management company. If you are offering a reasonable payment each month, some creditors will agree to stop interest straight away and others will want to take more time to review. Unfortunately you just can not guarantee when or if they will freeze extra interest charges and indeed for how long.
Another thought that springs to mind, did you consider an IVA (individual voluntary arrangement) or did Pay Plan discuss this with you? If you owe over £18,000 an IVA can be a sensible option as if the majority of your creditors agree, they are then all legally bound and then unlike a debt management plan, they can not add further interest of charges. However there are other implications so it is not something you can just jump into without doing the proper research.
By all means let us know if you need more advice or help.
Debt Expert & Author