DMP - Full and Final Settlement

JJGJ

I owe £33,000 and currently paying off on a DMP - If I were able to get hold of some cash - what kind of full and final settlements would creditors be looking at accepting (DMP been in place for 5 years)

Thanks for any advice

gargrave50

Hi JJGJ, welome to MSE. The general consensus on here is to start at 30% of remaining balance which gives you some room to be negotiated up. Some will settle for 35-50% depending on whether you are dealing with a debt collection agency (DCA) or the original creditor. Generally DCA's buy the debt for pennies in the £ which means they will settle for a lower percentage having bought it for a song. Hope this helps.

sortingmystuffout

Im also in a dmp plan i currently owe £3027 . Am I allowed to contact the creditors myself even when still in the dmp plan to make full and final settlement offers . I want to do it one creditor at a time though . Also am I allowed to ask them to take my defaults off my file if I pay full and final the defaults are 3 and 4 years old. I want to do this os that I can get a mortgage next year can anyone advise

costaerer

i think once youve defaulted, especially so long ago they will not take it off. it will just become a partially settled debt on ur credit file. considerin defaults were 4 yrs ago and defaults wont be shown on credit file after 6 i would just wait slightly longer for mortgage,

sortingmystuffout

hi thanks foe the advice the thing is that my parents own the house that i rent from them they own there own too. they would like me to buy half from them andt they would put the other half down as the deposit. I havent told them about my debts and they would go mad so just wondered if there was a way to get the m off my file but apparently not ill just carry on paying into dmp plan as would rather have it mared as fully satisfied. does anyone know if defaults this age are even taken into account as by next year they willl all be over three years three will be four years old and two will be five years old also my debts never went over £5000 not sure if that helps

Tixy

Whilst you are still in your DMP you credit report may show as 'arrangement to pay' and that will make it difficult to get a mortgage at a reasonable APR. 1 or 2 old defaults where the account has since been settled might not have too much of an effect but its difficult to know until you try. How many defaults do you have in total?

sortingmystuffout

hi i wouldnt try to get a mortgage until the dmp is paid in full which will be next year by then I will only have three satisfied defaults. One for £2500Lloyds one for £1500 orange dont ask me how i have no idea how they think they could charge me that but i guess interest as i stupidly ignored the debt thinking it would go away and the last one again with orange but for £416 pound I have absolutely no recognition of this I dont even remeber getting the default notice and this is not included in my dmp plan as thought I would wait until the others are paid and see if they get in touch first if they dont i'll send a for the cra . For information the dmp plan I am in does not register it on the credit files the credit agencies just update the files each time i have paid would it be worth my while writting a correction of notcie once everything is settled ?

Deep_In_Debt

You can contact the creditors directly to make a F&F but as others have mentioned, you will get a better deal if your debts are with DCA's. When I did a couple of f&f's, the creditors would accept nothing less than 70% whereas the DCA's accepted 45% (although I could have done better on this).

If you do a f&f, make sure that you get the offer in writing before making a payment, and that it is in f&f and that neither they, nor any associate or 3rd party will chase you for the remainder and that your credit files are marked as "satisfied". National Debtline website has a good template letter that you can use for this.

I think that defaults stay on your record for 6 years but I could be wrong.

Good luck.

Deep_In_Debt

It's unlikely a creditor will remove a default even if you have "satisfied" the debt as a default is to show that you have broken the terms of the original agreement by reduced amount. Also, a f&f will not necessarily help you either as it will show that it was a f&f (although I'm not 100% sure on this so could be wrong) Sorry about this, but once you get into a dmp or similar, your credit rating is shot to pieces.

You may be able to get a mortgage on the sub-prime market but unless you are desparate, I'd personally hang fire until your credit files are "clean".

sortingmystuffout

i had the defaults before still be debt free by next year i went into the dmp plan . with the dmp plan i would be paying the full amount that I paid even if i have to pay the full amount i would. The only reason i asked this question is because I have seen a couple of threads where people have manged to get satified defaults removed by writting a polite letter to the creditor. I feel like I am baninging my head against a brcik wall because these debts and defaults only occured because i got made redundant form my jon and had not been there long enough to get any redunance pay . After that I was out of work for 6 months ever scine I have been paying £230 a month into my dmp plan and not got any more debt and my finances are greatly improved it amsases me how being out of work through now fault of your for 6 months can impact your credit field and stop you from getting a good mortgage for another six years its a sad state of affairs . Can anyone give me some positive avice on how to possibly resolve this before the 6 years is up im pretty desperate to get on property ladder as I am 33 not getting any younger lol

sortingmystuffout

ps apologies for the typos writting this on the go lol