what would you do if you got £20k

mrelephant_2

I am currently in debt to sum of £60k and have been paying reduced repayments to my creditors for about 8mths, i keep in regular contact with them by sending income expenditure updates and increase payments when possible.

There is a strong possibility that i may be coming into £20k (if my luck runs ok) from my divorce settlement.

What i would like to know is what should i do with it?

Should i try and agree full and final settlements with my creditors to the lowest possible agreements i can get and use the £20k to pay off as much as i can? ie; i have loans with 7 creditors each ranging from 7K to 23k, i have already had an offer from one of the creditors whom i owe 7k that they would accept 2.5k as a f&f settlement (wish i had the money right now) I also a few months ago i had a f&f offer from my largest creditor of 22k who were willing to accept a settlement of 13.5k.

So my theory is to see how much i could barter down my other creditors and for example if i could manage to pay off say 4 or 5 of the creditors with the 20k and then re-negotiate repayments with the others.

Or

Should i bank the 20k in a high investment account and continue my reduced payments to all my creditors as if i hadn't recieved the 20k?

Constructive advice wanted.

Broken_hearted

You could take a world cruise but the first option sounds better.

Chortle_2

I'd try to negotiate settlements - not sure how it works when you've agreed reduced payments, but I'd imagine your creditors wouldn't be overly impressed if they found out you had £20k stashed in investments whilst saying you can't pay more than you are

Bothered!

I would probably settle those f&f offers first....if they are prepared to write off the rest...your quids in already.

Save a little for yourself as you probably need a break...from stress. then re-arrange the other creditors in order of highest interest priority to try to strike up a deal.

freeclimber

You could also offer a pro rata lump to each creditor, effectively reducing total debt by 20k, and increasing their willingness to continue with the lowered payments, which would then represent a higher percentage per month of the repayments on the outstanding amounts. That way you cannot be accused of favouring one creditor over another.

kathfisch

freeclimber wrote:

You could also offer a pro rata lump to each creditor, effectively reducing total debt by 20k, and increasing their willingness to continue with the lowered payments, which would then represent a higher percentage per month of the repayments on the outstanding amounts. That way you cannot be accused of favouring one creditor over another.

That's what I was thinking, aren't you supposed to treat them all fairly (on a pro rata basis)?

But the offers of f&f settlements are tempting.

Are you with a charity like CCCS or payplan? Maybe they or CAB could advise even if you're not.

oops_a_daisy

give it to me and I'll show you :eek: sorry couldnt resist

first option has got to be the best - barter