Making an offer to part pay dmp??

Learning2Budget · 7 April 2014 at 8:38PM

My husband has been made redundant. He gets a settlement of approx 5k. We have 19k left outstanding on our dmp. Is it worth offering this as a final payment or do we hold onto it so we know we can pay a lump sum at the end?
Feeling very confused at the minute. L2B.x

Tixy · 8 April 2014 at 1:03PM

You could try offering it to your creditors explaining the situation and that you will otherwise need to reduce your payments (if that is the case). It would be quite a low settlement but might be something they'd entertain if you'd otherwise be looking at only token payments or a much longer DMP.

But will you be able to manage financially if you pay that to your debts? I'd think first about whether you can manage all your priority outgoings for a few months ahead without that lump sum.

National_Debtline · 8 April 2014 at 3:24PM

Hello there,

If you can spare some of the lump-sum, you may be able to approach your creditors to see if any would consider a 'full & final settlement'. In return for having a lump-sum payment, the creditor agrees to write off the rest of the debt.

We have a fact sheet and sample letter which you can find here: https://www.nationaldebtline.org/EW/factsheets/Pages/24%20EW%20Full%20and%20final%20settlement%20offers/Default.aspx

Best wishes,

David @ NDL.

Learning2Budget · 8 April 2014 at 9:25PM

Thanks. Will look at our budget and talk to my husband.
L2B.x

Learning2Budget · 15 April 2014 at 9:01PM

Have discussed this with OH and have sat and worked out budget.
These are our figures, they all defaulted in 2008 apart from Barclaycard who I need to write to and ask for a change to default.
Apex £6149.44
Blair 4096.96
Marlin 2607.78
Blair 2293.14
Cahoot 2182.64
Barclaycard 1120.12
Barclaycard 925.51

We have £4.5k to offer and then our dmp will drop at present to token payments whilst we find out if oh is entitled to any benefits.
Will they laugh at us or will any accept. We were well on track to paying off all our debt within 3 years until oh was made redundant.
Trying to find a way to end this.
L2B.x

Learning2Budget · 22 April 2014 at 7:57PM

Budget updated with stepchange. £35 a month is all I can afford (in repayments) whilst I find out what/if any benefits my oh will receive.
Also waiting to see if he gets a payout soon so that I can offer F&F instead of payment over 36 years!!!!
L2B.x

unicorn1984 · 23 April 2014 at 1:12PM

Call them and offer them a settlement of 40% of the balance, that way you can clear off the top 3 for just over 5k (Apex £2,459.78, Blair £1,638.78 and Marlin £1,043.11)
I work in DM and we get settlements accepted all the time for 40% of the balance. Some creditors can be plain awkward and will say they can only accept the full amount, but then you can just tell them that your partner has been made redundant and they will only get token payments from here on out. They may change their minds.

If the highest 3 accept then you have cleared off £12,854 worth of debt with 5k.... then the rest can get token payments until you are in a better position to increase your monthly payments and clear the rest of quicker? If the highest 3 wont accept, then try clearing some of the others, but make sure you really hammer home to them the fact that your partner has no income and paint a really bleak picture, they may decide its better to cut their losses and accept a small settlement than have to accept a few pounds per month. They can only say no.

Good luck!

Learning2Budget · 23 April 2014 at 9:29PM

Thanks Unicorn. Really appreciate the advice.xxx

double_mummy · 23 April 2014 at 10:26PM

personally i would go in lower than unicorn i would go in at 20% for each which comes to a total of 3877 this then gives you around 700 to play with and increase offers if needs be

write up an new SOA and include it within the settlement letter make sure it shows only £1 per creditor available and tell them of your situation and tell that if they do not accept they will be getting £1 per month. show the others on there as well and say that you are making the same offer of 20% to each. Those who accept will get paid those who dont will get £1 per month. make sure you get each acceptance in writing before paying anything including that they will not sell on the remaining balance

also just as a side point are you using a free DMP? if not this may help

Learning2Budget · 24 April 2014 at 6:37AM

Yes we are but thankyou double mummy. L2B.x

Learning2Budget · 3 June 2014 at 9:44PM

Well we spoke to stepchange who said a settlement of 23% would not work. They wanted us to do a lump sum iva. However I have now found that we are entitled to tax credits and esa. So this means we could increase our payments back up and hopefully clear our debt in 4 years. Without having to go down an insolvency route. I personally prefer to do this and know we are going to cleaar our debts ourselves. So will use the money for a lump sum pay off towards the end of our plan. Feeling happier but thanks for the advice and support. L2B.x

Making an offer to part pay dmp??

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