Mortgage or other debts

lozzam

Hi all, I've been lurking for years and learning a lot from all you lovely people. I started a DMP in 2005 with unsecured debts of around £180,000 (eek) - they are now around £110,000, continuing to go in the right direction and I am keeping up with the plan.

My (nice) dilemma now is that my mortgage fixed rate is about to come to the end and the SVR means I will be paying a lot less each month. So what to do with the savings? My instinct is to overpay the mortgage as much as possible to ensure I protect my home. Most of the debts in the plan are at 0% interest, and even those that are charging me interest are at a lower rate than the mortgage SVR, so it is better for me to pay the highest interest debt, ie the mortgage.

But it somehow feels morally that I should be paying the DMP debts as the interest has been waived due to the difficulties I got myself into...

What do you think? Mortgage to reduce total debts quickly? Or DMP to pay back the organisations that have already let me off some of my responsibilities?

JamieT1977

pay the mortgage, if you miss payments on that you lose your home so make that your priority.Missing payments on your DMP results in nasty letters at worst......far better than losing your house

Oneday77

Really it is kind of up to you. When was your last review of your SoA on the DMP?

What you could do, assuming you can manage it without diverting it elsewhere is. As long as the mortgage continues to be below what you've been paying save the difference up. Then look at your outstanding creditor amounts and see which ones you could possibly offer F&F payments to after you build up a pot of savings. I would assume most of your debts have been sold on if you have been on a DMP for 5 years. DCAs might be glad to get rid of long term debts.

JamieT1977

Like oneday77 says its up to you, either put it straight into repayments or put it aside every month then use it as a F&F offer.

lozzam

Hadn't thought of that (F&F).

So what percentage of outstanding will be acceptable? I think the lowest debt is around £2500 - do you think I could offer £1000?

Oneday - my last review was in November. If I overpay on my mortgage I want it to be in place and established before the next review. If I save up the savings, then I will need to roll it in the DMP at the review.

Actually as I wrote that I realised what makes most sense...

Take the savings for a few months and pay off the lowest debt(s) with F&F offer. Then move into mortgage overpayments before the next review. Then maybe repeat the pattern next year (or until mortgage starts going up again). Feels a bit sneaky, but does seem to be the way to maximise the use of the mortgage savings.

JamieT1977

lol seems you have worked out a plan for yourself lol.
If you have not heard from a creditor for ages, they are the ones most likely to accept a F&F offer, think I have heard the figure 20-30% banded about.

Oneday77

For the £2500 balance it depends on who owns it, whether it is enforceable and what the initial balance was.
If a DCA owns it, the balance was say £5000 initially then £1000 would be a good shout. Have you done any CCA requests, especially as all your debts are pre-2007. If you found it to be non-enforceable then £1000 would almost certainly be bitten off at the elbow to say yes.
If you un-familliar with CCAs look for the Un-enforceability templates thread one page one or 2 of th eboard.

lozzam

Wow, 20-30% would be fantastic! Definitely worth trying. Many thanks for the advice :beer:

lozzam

If you un-familliar with CCAs look for the Un-enforceability templates thread one page one or 2 of th eboard.

Yep, that's me - will take a look. Would I need to say to the DCA that it was unenforceable or are they likely to know that?

JamieT1977

lozzam wrote: »

Yep, that's me - will take a look. Would I need to say to the DCA that it was unenforceable or are they likely to know that?

Write to each asking for a copy of the CCA (as suggested see the templates thread)

lozzam

Thanks Oneday77, thanks JamieT1977.