pay off more, less, same..?

OHNOANOTHERDFW

hi

I am 2 yrs into a dmp and hav reduced debt from 85k to 47k (ignoring 10k loan which creditor has lost CCA for:j), and this includes 1 discounted settlement fron inhouse DCA

I pay 965 a mnth via CCCS . I have a decent job which feels pretty steady (touch wood)..Half creditors frozen intersst and seem very happy to continue forever with the arrangement, 1 reduced to 5.9%, BUT 2 charge high interest...1 22.9% argueing as I pay more than the minimum payment I am a 'normal' customer. with this one i pay £78 a month and get charged £71!. CCCS wont vary payments between creditors...long story....

and finally I have a loan which is in the process of being sold by santander.....since Dec....no news on where yet!

I have savings and investments of £28k, which are predominantly shares from work, emergency money, and premium bonds my auntie left in her will, of which £17k is ready available. I earn negligible interest . I have 5 children and a mortgage with about 15k of equity in it

Should I

1 - CARRY ON as I am, praying for debts to be passed on one day, whereby interest will be reduced / frozen and maybe F+FS discussions occur

2 - PAY OFF APPROX 17K of debt - obviously interest bearing ones going

3 - INCREASE Overall payments by about £100 a month which I could manage by squeezing harder and not putting 'spare' cash into savings

4 - DECREASE Overall payments by about £100 a month, which I could justify with big family...putting exxtra in savings and then hope this stimulates action from creditors

5 - DO SOMTHING DIFFERENT

Thanks

Nargleblast

As you are in a DMP with CCCS then it is only right you should discuss these options with them. Every creditor gets a share of your monthly payment, the amount pro-rata according to the size of the debt. You could ask for a complete review of your DMP, saying you have about £17000 worth of premium bonds you could cash in, and is there any way you can pay off or do full and final offers on some of the debt amounts? Then, if you can do that, your total debt will be down to about £30000 and you can do a fresh budget based on that and of course taking into account the increases in household expenditure over the past year or so.

OHNOANOTHERDFW

thanks nagle....cccs have said previously when I mentioned some spare assets they would advise I pro rata payments to all creditors. To me thats daft if I was going to use it I would give to the highest interest ones

I should have said I wrote to all creditors in nov explaining I have some money gifted from a relative on the basis of a full n final settlement figure and not one of them showed any interest :mad:

Nargleblast

i would go back to CCCS again with the proposal of using the £17 to clear the highest-charging debts and redoing the DMP for the rest. They are absolutely right in saying each creditor should be treated the same, and you shouldn't favour one over another, but in this case if you do rework your DMP for the remaining £30000 of debt, and keep the repayment about the same, then the creditors will suddenly start getting a greatly-increased share of your monthly payment, so they will benefit after all! Have you tried the sticky at the top "ask a CCCS counsellor a question"? Might be worth doing.

OHNOANOTHERDFW

thanks - they have just said they coudlnt advise on which creditors should be paid off, but I should keep them updated etc etc - yes the remaining creditors would receive much more.....part of me thinks thats not a great thing as far less likely to sell on and take f+fs...

part of me also thinks i cant just let the 17k go, so perhaps I will use half and gret rid of H dross:j


aaaaah.... this is tricky

Nargleblast

Don't you want to get rid of as much of the debt as possible? I know the premium bonds offer hope of riches, but the chance of actually winning anything is just that, a chance, and that £17000 is not earning any interest for you, it is just idle money. The decision about which creditors to pay off is ultimately up to you, just keep CCCS informed all the way and work out a revised budget and debt repayment schedule with them. You can always invest in premium bonds again once you are debt free, if that is what you want to do!

OHNOANOTHERDFW

hi nargle i dont care about the chance of winning (gambling got my family here) - thats just my auntie being old skool, I do want to clear the date asap, and my OH now has 2 jobs to try and make this work.....

its just that originally I was advised to hold on to my savings (at the time about 5k) as afgter a while the creditors will get fed up and sell debts on leading to f+fs at discounted rates...and this was the best strategy to get debt free.

I think we pay too much for them to be bothered, and its easy for them to just to get regular steady amounts every month...

indebtinsussex

If it was me I would go back to cccs again and see what they say to do. However if it was me, I would keep about £2,000 back for emergencies and use the rest of pay off my debt

lozzam

I'm impressed that you have another £100 you *could* put into paying off debt. I felt that CCCS squeezed my budget until my pips squeaked so good for you! :beer:

If it was me, I would want to keep some for emergencies, but would otherwise use the rest for F&F settlements where it hurts the most... bearing in mind that when you do increase the payments to other creditors then if they have not defaulted the account they may also decide you are a 'normal' customer and starting adding interest too :mad:

Ultimately, getting debt free asap (without compromising your family security) has to be the goal. That's why we are all on this forum....

OHNOANOTHERDFW

ooooh lozzam, i was with u until you mentioned that as the remaining creditors will receive more each they might move me to 'normal' interest.....gulp. I would hate to push mbna who are 0% and my biggest by far to put me back to whatever standard is these days.....gulp again

my total income will drop by £398in July when my ex no longer pays maintenance for my daughter who leaves education....

this will mean payments reducing significantly to crediotrs....

perhaps I should just bide my time and then see what happens

lozzam

I don't know if they will do that - I haven't got to that position yet!

If you pay off a creditor that is charging you interest, how much extra does that give to the others? If it doesn't increase the amount close to 3% of balance, then it does seem unlikely that they will change anything, and you will be making your money go further, so it is still worth it.

However, as you say, your available income will go down in July, so at that point it will adjust again - may be worth waiting until then so that the next change for remaining creditors does not may much difference IYSWIM.