Full and final settlement help thread

harvey180

I was wondering if I could ask some advice from some of the more experienced members.
I’ve been on a DMP for the last 6 years and have cleared 25,000 of a 57,000 debt that I started with. The debts belong to me and my wife.
I’m managing to make the payments fine, however I’m looking at another 8-9 years to clear the remaining 32,000.

All of the original defaults have disappeared off my and my wife’s credit files and ironically I have a relatively good credit rating at the moment. I am trying to gauge if I should apply for full and final settlements for the remaining debts, most of which have been sold onto the agencies below. I was thinking that I could potentially settle the 32,000 for 50 – 70% of what I owe and then add this to my mortgage (ie perhaps 20 – 23k).

I don’t want to upset my DMP by asking for settlement figures from these companies. (Don’t know if this would actually happen). Also don’t know if there is an advantage to even thinking about this. Just know I would feel better if I could clear the DMP completely.

I turned to MSE when we first realised that things had gone too far and can’t recommend the site more, it got me and my family back on track after realising we had been living life the wrong way.
many thanks in advance
Jonathan

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fatbelly

This crops up a lot. It's one thing using a lump sum to do F&Fs, it's another thing to borrow money to do it and yet another thing to secure that against your house.

Another poster put it nicely so I'll quote them. But I would have used 'dangerous' rather than 'different'

To me this doesn't sound like a good alternative - though others may well have a different viewpoint. If I understand what you are saying correctly, you are thinking of borrowing against your mortgage to pay off your DMP - but that wouldn't mean you have no more debt, just debt of a different kind.

You've done really well so far and whilst I truly appreciate the thought of another 8/9 years is causing you some anxiety - you do have an end date in sight. If the real issue is that you are struggling to manage paying £300 into the DMP, then maybe you need to revisit your I&E with your DMP provider -but I can see that would heighten your concern about the length of time needed to clear the DMP. It's a mindset thing -8/9 years is not the longest DMP journey I've seen on here as long as its manageable of course.

harvey180

fatbelly wrote: »

This crops up a lot. It's one thing using a lump sum to do F&Fs, it's another thing to borrow money to do it and yet another thing to secure that against your house.

Another poster put it nicely so I'll quote them. But I would have used 'dangerous' rather than 'different'

Thanks for the information, I was thinking that negotiating Full and Final might reduce the 32k to closer to 20k and hence save myself some money in the long run.

Someone else suggested picking them off one at a time on Full and Final offers. I dont know how Stepchange would like this who manage my DMP.

Anyone got any experience of trying this approach.

Many thanks,
Jon

[Deleted User]

harvey180 wrote: »

Thanks for the information, I was thinking that negotiating Full and Final might reduce the 32k to closer to 20k and hence save myself some money in the long run.

Someone else suggested picking them off one at a time on Full and Final offers. I dont know how Stepchange would like this who manage my DMP.

Anyone got any experience of trying this approach.

Many thanks,
Jon

Hi Jon/Harvey:hello:

Congratulations on the great amount you've already paid off:T. I can understand you've got to the stage where you're impatient for the debts to be finally gone. I think we all feel like that from time to time, I know I certainly did.

I doubt that SC would sanction the proposals you have put forward to us and that's why a lot of us have decided to self-manage our own DMPs. I shall be eternally grateful to SC for helping me through those first 4 years and I know I just hadn't the knowledge, confidence and courage to go it alone. Now, thanks to the wisdom and encouragement of others on the DMP Support thread I'm handling things myself:j. This is mainly to give myself the flexibility to pay my creditors what I like when I like. This includes making F&F offers. I haven't actually made any yet as I'm still raking together enough money to be able to offer a credible amount:o


Maybe someone else will be along who has successfully negotiated F&Fs with SC.

Good Luck:beer:

January2015

harvey180 wrote: »

Thanks for the information, I was thinking that negotiating Full and Final might reduce the 32k to closer to 20k and hence save myself some money in the long run.

Someone else suggested picking them off one at a time on Full and Final offers. I dont know how Stepchange would like this who manage my DMP.

Anyone got any experience of trying this approach.

Many thanks,
Jon

Pick the debts off one at at time and don't tell SC. It's your DMP. SC just help facilitate it for you. SC don't technically like you treating creditors differently and would say if you have a lump sum you should split it pro rata across your creditors. In real life you can do what you want. If you negotiate a F&F settement with a single creditor then just go onto your online SC account and zero the balance owing on that debt. Then start saving towards the next debt.

Whatever you do - please do not borrow against your home to clear your DMP. Turning unsecured debt into secured debt is not a good idea. You may have several years to go on your DMP but think how much longer that will be paying a secured loan/mortgage. Stick with the DMP

fatbelly

Stepchange don't have to have any say in F&Fs. You can do the negotiating yourself and then let them know what you've done.

The problem is where the money is coming from. It's great if a third party is paying or you've come into a lump sum. But not so good if you're replacing interest free debt with interest bearing debt. And if you're securing the new debt against your house you're moving it to a dangerous place.

DrWatson1

What everyone else says.

You basically have a £32k unsecured debt, presumably at 0% interest.

You're thinking of replacing this with a £20k secured debt, that does charge interest.

I'm gonna hazard a guess that by the time you add the interest onto the £20k, you're going to have to pay more than £32k back, and you're potentially putting your home at risk?

If there is an upside to what you're suggesting, I can't see it.

fatbelly

The other downside is that if you lose your income (illness, job loss etc) then there is a safety net of sorts (Support for Mortgage Interest, SMI) but it only pays on borrowing to buy the property in the first place. If you have raised a further 20k then that won't be covered.

The safety net is not as good as it once was but it still exists

harvey180

carbootcrazy wrote: »

Hi Jon/Harvey:hello:

Congratulations on the great amount you've already paid off:T. I can understand you've got to the stage where you're impatient for the debts to be finally gone. I think we all feel like that from time to time, I know I certainly did.

I doubt that SC would sanction the proposals you have put forward to us and that's why a lot of us have decided to self-manage our own DMPs. I shall be eternally grateful to SC for helping me through those first 4 years and I know I just hadn't the knowledge, confidence and courage to go it alone. Now, thanks to the wisdom and encouragement of others on the DMP Support thread I'm handling things myself:j. This is mainly to give myself the flexibility to pay my creditors what I like when I like. This includes making F&F offers. I haven't actually made any yet as I'm still raking together enough money to be able to offer a credible amount:o


Maybe someone else will be along who has successfully negotiated F&Fs with SC.

Good Luck:beer:

Thanks for the feedback. Looking at your signature you have done really well. I dont know if I am brave enough to go completely alone on my own but do like the thought of tackling these debts one at a time.

If it is possible to just deal with them without getting SC to sanction each Full and Final then I feel comfortable starting down that road.

January2015 thanks for the response, I think that based on your advise I now know that converting unsecured to secure debt is definitely not the way to go. Thanks for the pointer on just going onto the SC site and zeroing the debts.

fatbelly Thanks for all the advise - It never fails to amaze me how the community spirit on this forum unites people. Going to have to read up on SMI looks like something that I should have in place.

Goal for the next week is to get CCA requests sent off. Time to start properly fighting back

thanks everyone and I;ll post my experiences as they unfold.

Jon

fatbelly

SMI is part of the JSA/ESA/Income Support benefits - rapidly all being rolled together in Universal Credit. Hopefully you'll never need it.