Which would you do?

kdallsop

OK, have a number of debts, detailed below approximatly. Will be receiving a sum just under £3k shortly, however, am in a DMP, and have been for some time. Cash has been short, so only been paying it back at a total of £110 a month

I am torn for choices, stay in the DMP, where the whole sum will be spread across the debts, leaving me still in the same position of paying them back, and taking a long long time.

Or, leave the DMP, take about £800 of the sum out, to sort out a couple of other thingsI need to do, car MOT and repairs, tax, and a clear a couple of household bills. Then pay off the two smallest MBNA and Egg debts, clearing them completely, and plowing the remainding £300, and the monthly £110 in to the final one debt.

I am swaying towards the latter, therefore satisfying two defaults, and paying off the other quicker, so, just looking for a bit of advice

Natwest: £7200
MBNA: 1300
Egg: 400

If the whole sum went into the debt under DMP (assuming no reduced payment on either account to clear), would take 55 months to clear off, and would likely not have any defaults satisfied

If came out DMP, cleared off MBNA and Egg, and Paid £300 off Natwest, would take 63 months, so a bit longer, but would have 2 satisfied defaults on my credit record.

What would you do??

Tixy

Hi

Are the debts all still with the original creditors or are any now with debt collectors?

Also how long ago were the defaults on these? As if they are already several years old you may not get much benefit from satisfying them, as they may be gone anyway before you stand a chance of getting any further mainstream credit.

Have you considered trying to offer reduced full & final settlements?

You may want to consider whether

kdallsop

MBNA and Egg are with original creditors, the natwest is with Apex Credit mgmt, two debts rolled into one

would have thought I could get reduced final settlement on the small three, but doubt thy will accept less than half for the Natwest debt!! Unfortunatly, if they would id plough the whole lot into that!!

They are all about 4 years old, maybe slightly older.

Possibly psychological aswell, but I know Id feel alot happier with just the one, but want to make sure I uise the cash wisely

Tixy

I just wonder if it would be worth trying to F&F just the larger one. If they won't accept then you could go with your idea to clear the other 2.

What were the 2 natwest debts? if they were credit agreements (not overdrafts) have you ever considered looking at whether the agreements were correct and enforceable), if they were possibly unenforceable that would highly increase the chances of them accepting a low F&F.

If you do try it, make sure you say in the letter the cash is not yours (relative offering to pay off a debt or something) so that they cannot decline the offer but demand their share of the funds anyway). National debtline have a useful factsheet - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Lucifa73

Couple of thoughts...

• What are the interest implications of coming out of DMP?
• Worth trying for a F&F on the largest debt as then your £110 each month will quickly get rid of the smaller ones

System

Hi kdallsop

I have just been looking into doing a similar thing. HAd a SUPER helpful convo with a lady on National Debt Line today. Tixy is right they are a great help on this.

I'd be up for comparing notes if you'd like to PM me.

Numpty_Monkey

good list of what DCA's might accept if in this post by gonzo
http://forums.moneysavingexpert.com/showpost.php?p=31089645&postcount=7

As long as you inform your DMP provider ( hope its one of theese Non-profit Debt Counsellors' List )of what you are doing they will be ok with you makeing F&F's

kdallsop

Tixy wrote: »

I just wonder if it would be worth trying to F&F just the larger one. If they won't accept then you could go with your idea to clear the other 2.

What were the 2 natwest debts? if they were credit agreements (not overdrafts) have you ever considered looking at whether the agreements were correct and enforceable), if they were possibly unenforceable that would highly increase the chances of them accepting a low F&F.

The natwest was a loan and an overdraft, Apex Credit mgmt have rolled them into one debt now.

What would make the agreements unenforcable??

Couple of thoughts...

• What are the interest implications of coming out of DMP?
• Worth trying for a F&F on the largest debt as then your £110 each month will quickly get rid of the smaller ones

[\QUOTE]

Not sure about interest complications. Didnt think of that one to be honest. Would it change it? I thought I would still be in a DMP on the unpaid debts, just between myself and the creditors, with no 3rd party.

good list of what DCA's might accept if in this post by gonzo
http:/forums.moneysavingexpert.com/...45&postcount=7

As long as you inform your DMP provider ( hope its one of theese Non-profit Debt Counsellors' List )of what you are doing they will be ok with you makeing F&F's

[\QUOTE]

DMP is with Gregory Pennington, started years ago, nevr had any dramas since I started with them, so just left them to it. Now beginning to realise its costing me £30 a month fee, which could go into debt, and will take forever to clear!!

So, any ideas of the chances of them accepting a F&F payment of £2888 on an account of just under £7200??

Tixy

kdallsop wrote: »

The natwest was a loan and an overdraft, Apex Credit mgmt have rolled them into one debt now.

What would make the agreements unenforcable?? - https://forums.moneysavingexpert.com/discussion/2305463 bit of a long topis. Some accounts prior to April 07 do not have legally enforceable credit agreements as they do not have all the legally required terms in the agreements, could affect the loan, not the overdraft).

Couple of thoughts...

• What are the interest implications of coming out of DMP?
• Worth trying for a F&F on the largest debt as then your £110 each month will quickly get rid of the smaller ones

[\QUOTE]

Not sure about interest complications. Didnt think of that one to be honest. Would it change it? I thought I would still be in a DMP on the unpaid debts, just between myself and the creditors, with no 3rd party.

You could still be in a self-managed DMP, however if you paid off the natwest debt with a F&F then you will be paying the £110 just to the other debts, how does this compare to what the original minimum payments would have been? often if you start paying more than that interest is charged again.

good list of what DCA's might accept if in this post by gonzo
http:/forums.moneysavingexpert.com/...45&postcount=7

As long as you inform your DMP provider ( hope its one of theese Non-profit Debt Counsellors' List )of what you are doing they will be ok with you makeing F&F's

[\QUOTE]

DMP is with Gregory Pennington, started years ago, nevr had any dramas since I started with them, so just left them to it. Now beginning to realise its costing me £30 a month fee, which could go into debt, and will take forever to clear!! well I would definitely suggest you cancel this whatever else you do, do you pay £110 of which they take £30 or do you actually pay £140 in total. You can probably self manage now and pay the full £140, if you feel you cannot then you could go for one of the charities.

So, any ideas of the chances of them accepting a F&F payment of £2888 on an account of just under £7200??

That would be a 40% offer so I'd say its worth trying, worse they can do is say no, in which case clear the others and pay apex the £140 per month.

Good luck

kdallsop

Thanks for the advice.

Just spoke to Greg P, they recommended I speak to my creditors first, to get agreements in place, before cancelling. When they asked why, I just said I feel I am able to do it alone now, and the £30 management fee would be better off going to the debt instead of them, explaining, I will be liable for interest on all three of the accounts, that they had agreed to be frozen, so would cost more than £30 a month.

Was I fobbed off??

I didnt tell them i shall be getting a lump sum within the next few days, do I need to??

So, its not cancelled yet, a little confused as to my next step. The lump sum will be in the bank within the next couple of days, so do I:

Send F&F offer to Apex for 30%, to leave room for haggle, and remain in GP until I get an answer, leave after I have a yes/no

Contact all creditors and get a agreement in place for repayment, then leave GP, and deal with cash after

Leave GP as quick as possible, then contact all creditors to set agreements

:undecided

Tixy

kdallsop wrote: »

Leave GP as quick as possible, then contact all creditors to set agreements

:undecided

Personally that would be my choice, but then I'd be reluctant to pay them a single £30 more. If there was no lump sum and you just took over there is no reason to think that the creditors will suddenly start charging interest just because GP are no longer involved.

Aside from the lump sum you would normally just write to the creditor saying something like

GP are no longer managing my debt management plan, I would like to increase my monthly offer to you to x due to the saving I am making by no longer paying GP a fee.
I trust that you will continue to freeze interest & charges on the account as has been agreed and request that all communication from yourselves be in writing.