Your views and questions.

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By royston
#201961 I was wondering if anyone can clarify exactly what freezing interest actually entails.

My various creditors are just deducting the money I pay each month through PayPlan off the actual amount owed. However, I do note that there is a box at the end of each month's statements which still shows interest accrueing. On one of my statements beneath this box it says 'We have made a specific payment arrangement with you. Please continue to make your agreed payments until your arrangement ends. The payment information in the Summary section above will apply again when you have finished making your agreed payments.'

Am I to understand from this note that once I've cleared the credit card debt they will then expect me to continue paying off the interest that's built up? Is that what freezing interest actually means? :?
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By Yogi Bear
#201972
royston wrote:My various creditors are just deducting the money I pay each month through PayPlan off the actual amount owed. However, I do note that there is a box at the end of each month's statements which still shows interest accrueing. On one of my statements beneath this box it says 'We have made a specific payment arrangement with you. Please continue to make your agreed payments until your arrangement ends. The payment information in the Summary section above will apply again when you have finished making your agreed payments.'

I think you probably need to clarify this with Payplan: I haven't actually come across this particular form of wording. It may just mean that the creditor has agreed to freeze interest whilever there is an arrangement in force to accept reduced payments, but will revert to adding interest once again as and when the arrangement ends - but in that case, interest shouldn't be shown as accruing on the statements. :?

However, in more general terms, "freezing" interest normally means that no further interest is added to the outstanding balance on the account and thus all payments will reduce the total still owing by the amount of the payment.
By royston
#201988
Yogi Bear wrote:
royston wrote:My various creditors are just deducting the money I pay each month through PayPlan off the actual amount owed. However, I do note that there is a box at the end of each month's statements which still shows interest accrueing. On one of my statements beneath this box it says 'We have made a specific payment arrangement with you. Please continue to make your agreed payments until your arrangement ends. The payment information in the Summary section above will apply again when you have finished making your agreed payments.'

I think you probably need to clarify this with Payplan: I haven't actually come across this particular form of wording. It may just mean that the creditor has agreed to freeze interest whilever there is an arrangement in force to accept reduced payments, but will revert to adding interest once again as and when the arrangement ends - but in that case, interest shouldn't be shown as accruing on the statements. :?

However, in more general terms, "freezing" interest normally means that no further interest is added to the outstanding balance on the account and thus all payments will reduce the total still owing by the amount of the payment.


Thanks Yogi.

I will ask PayPlan about this. When I asked PayPlan about interest being frozen by companies not long after I started my DMP they did say that it was still early days and sometimes it can take a while for interest to be actually frozen. I have been fortunate that it has already happened in most cases, but the company who have the wording on the bottom of their statement can be a bit awkward I believe. My wife also has a card with them and hers is for a higher amount than mine, but she hasn't actually used her card for quite a long time. You'd have thought that would have made them more amenable in regard to freezing interest in her case as it should have been obvious that she had discontinued using it.

Still, these companies seem to be a law unto themselves. I'll wait until next month and if the interest has gone up again I'll ask PayPlan to query it and also write a letter to them myself, and my wife will do so as well.
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By DuffNCustard
#202268 That's one of the disadvantages of a DMP - it is totally voluntary and cerditors can continue charging interest.

Being rather wet behind the ears when I started my DMP I foolishly thought that the FSA guidelines and codes of conduct that they are all supposed to follow - like treating folks in financial difficulties sympathetically actually have some weight. Well I learned my lesson the hard way - my experience is that they can do what they dam well like and they do.

That said the creditors with whom I have personal loans accepted my DMP eventually and didn't go for CCJS, and the others with whom I have credit card debts did all freeze my interest - they are not adding any charges to my account at all. With the excepion of MBNA who continue to apply interest and Halifax who stopped interest for nearly a year and are now charging it.

EGG and CAHOOT were I have to say absolutely brilliant and after the initial palaver told me that they would freeze interest until I had cleared my debt.

The other 2 massaged the figures so that the minimum amount I pay each month puts the account 'OK' and as this amount covers interest and a bit of principle I don't hear a peep out of them. The CCCS have sent them umpteen 'freeze the interest' request letters - I think they must be used for bog paper when they get them

None of them has ever confirmed in writing that they will freeze interest.

Some of them have confirmed in writing acceptance of my offer of payment - but have stipulated a time period (all have renewed though), others have not

All of them are accepting the money though.

Then it started to worry me what might happen at the end of my DMP in 3 years time - might the creditors decide to lump me with a massive interest hit - so I called the CCCS in a flap - they told me that they obtain letters from the creditors that the debt is fully paid and all is hunky-dory. They also assured me that they would handle the negotiations if any were necessary.

I just keep praying that the new legislation that will allow a DMP to be imposed as a legally binding agreement (which also includes interest freezing or other 'deals'), will be implemented within the next 3 years to cover me.
By royston
#202284
DuffNCustard wrote:That's one of the disadvantages of a DMP - it is totally voluntary and cerditors can continue charging interest.

Being rather wet behind the ears when I started my DMP I foolishly thought that the FSA guidelines and codes of conduct that they are all supposed to follow - like treating folks in financial difficulties sympathetically actually have some weight. Well I learned my lesson the hard way - my experience is that they can do what they dam well like and they do.

That said the creditors with whom I have personal loans accepted my DMP eventually and didn't go for CCJS, and the others with whom I have credit card debts did all freeze my interest - they are not adding any charges to my account at all. With the excepion of MBNA who continue to apply interest and Halifax who stopped interest for nearly a year and are now charging it.

EGG and CAHOOT were I have to say absolutely brilliant and after the initial palaver told me that they would freeze interest until I had cleared my debt.

The other 2 massaged the figures so that the minimum amount I pay each month puts the account 'OK' and as this amount covers interest and a bit of principle I don't hear a peep out of them. The CCCS have sent them umpteen 'freeze the interest' request letters - I think they must be used for bog paper when they get them

None of them has ever confirmed in writing that they will freeze interest.

Some of them have confirmed in writing acceptance of my offer of payment - but have stipulated a time period (all have renewed though), others have not

All of them are accepting the money though.

Then it started to worry me what might happen at the end of my DMP in 3 years time - might the creditors decide to lump me with a massive interest hit - so I called the CCCS in a flap - they told me that they obtain letters from the creditors that the debt is fully paid and all is hunky-dory. They also assured me that they would handle the negotiations if any were necessary.

I just keep praying that the new legislation that will allow a DMP to be imposed as a legally binding agreement (which also includes interest freezing or other 'deals'), will be implemented within the next 3 years to cover me.


The Company that I started the thread about seem to be being a bit crafty. They appear to be taking my payments off of the actual amount owed but the summary box I mentioned is where they are accruing the interest at present. At the top of my Statements each month they confirm that I am on a reduced payment arrangement and that they will not add interest or charges to the account whilst I keep up my payments. Reading between the lines they are going to keep the interest racking up and then go for it when the actual amount owed has been repaid. What they obviously are doing is very underhand and it's the next thing on my 'To Do List' to be sorted!
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By deej
#202290 it is really underhand. I hope you get it sorted, It makes me laugh as this it what RBS did to me whilst on my IVA.(which failed)
On my credit report I noticed that they continued to add late payment charges and interest to my debt so that if/when my iva failed then they could pursue me for the debt plus interest. :cry: :roll:


deej x
By chandjay
#202296 I never bother about how much interest that they charge(or late payment fees) as they are NEVER going to get them. It's same with the court costs with a CCJ... they will never get them. I tell my creditors to DO THE MATHS.
I owe £1200 to my LEAST creditor(I have 25) and I pay £8 per month. That's less than £100 per year. Even with NO interest/charges it would take me over 12 years to pay back..... but I'm 57 years old, so I'd be 70 years old when it was paid back...BUT ... when I'm 65, I will become an OAP, so the £8 per month will have to be reduced, so it may well take me 15-16-18 years to pay the £1200 back. How much do you think £8 or £6 or £5 (whatever I'm paying) will be worth in 18 years time... ABSOLUTE BUTTONS. ... And before anyone says that my payments will go up every year, then they're wrong. As fast as my wages go up so will inflation, so it will cancel any pay increase out. I'm afraid what my creditors get NOW they will get FOREVER.
By royston
#202304
chandjay wrote:I never bother about how much interest that they charge(or late payment fees) as they are NEVER going to get them. It's same with the court costs with a CCJ... they will never get them. I tell my creditors to DO THE MATHS.
I owe £1200 to my LEAST creditor(I have 25) and I pay £8 per month. That's less than £100 per year. Even with NO interest/charges it would take me over 12 years to pay back..... but I'm 57 years old, so I'd be 70 years old when it was paid back...BUT ... when I'm 65, I will become an OAP, so the £8 per month will have to be reduced, so it may well take me 15-16-18 years to pay the £1200 back. How much do you think £8 or £6 or £5 (whatever I'm paying) will be worth in 18 years time... ABSOLUTE BUTTONS. ... And before anyone says that my payments will go up every year, then they're wrong. As fast as my wages go up so will inflation, so it will cancel any pay increase out. I'm afraid what my creditors get NOW they will get FOREVER.


The thing is you are in a position where this has little or no effect on your life as you aren't a property owner. Those of us who are can't be quite so relaxed and cavalier about the years ahead.

I'm older than you and far more likely to have problems ahead if I want to look on the dark side. If things did go downhill then I'd have to look at things more seriously than you for my own security in old age.
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By Yogi Bear
#202307 Yeah - you do have to look at all the angles and consider your options in the light of your individual circumstances. While you can't factor in too many "what ifs", owning property is still a fairly major consideration when doing a DMP.
By chandjay
#202310 I couldn't agree more. I am always saying that I am in a BRILLIANT position as regards my debt. I have NOTHING(I made sure of that) so my creditors can only get what I offer them.... plus .... I have the ultimate trump card - I can always petition for my personal bankruptcy. I haven't done this so far as I feel an obligation to pay my debts back(after all, I've had the money) ... BUT... it's on MY terms.
You are quite right... owning property is a very different ball game altogether

Incidentally, I wasn't being "cavalier"....I was telling the TRUTH about my situation.
By Butts
#202315 I have had a few creditors who have restarted interest charges after a lull of 1 years grace.

I am expecting the trickle to become an avalanche when my reduced payments start to kick in (see post on other page)

Perhaps we could do with a wave of Zimbabwe type inflation to wipe all our debts out !!!!

Hyper Inflation where are you when needed - this would help House Owners as well :mrgreen:

Dreaming on from my new bolthole.
By royston
#202707 I've now found out more about my query regarding the amount that seems to increase each month on my Credit Card Statement. Apparently each month that I don't meet the minimum payment this shortfall is added onto an ongoing amount kept separate from the actual balance being paid off.

In other words, they aren't charging interest but they are keeping a running total that increases and when I eventually pay off the balance they then expect the shortfall total owed to be paid off! As the shortfall is currently at just under £2,000 and I've not been in a DMP for long, I can't imagine what I'll owe them after a few years!!

It just goes to show that it pays to examine a Statement carefully and not just take for granted that its all sweetness and light with these Companies. I'm sure that there are others out there in a similar position that just don't realise what is going on.
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By scotcrew
#202710 It really is a disincentive when they pile on interest in a DMP, with the end never in sight. It is no wonder that many give up and bite the bankruptcy bullet. You would think that the creditors would give incentives for those on DMP’s as they will more often get a greater return than someone going BR. Pity we can’t just give them a pound of flesh too, I could do with losing a couple of stones! :roll: