Early settlement advice

scazza

Hi all, I have had a DMP for a couple of years now, paying £193 on Lloyds Tsb loan, credit card & overdraft, currently owing about £17,500.

My family have offered to lend me an interest free loan of £8000 to pay this off, & was wondering if this offer may be to small.

Any advise greatly appreciated:beer:

Tixy

I would imagine this might be sufficent, although obviously its impossible to know for sure.
If your debts are with external DCAs they are the people who usually accept really low percentages, and after a couple of years on a DMP I assume that many might be with external dcas.
Were you planning to offer to all creditors at the same time? or doing them one by one?
National debtline has a good factsheet relating to full & final settlements which is worth a read.
In addition remember you are likely to have to negotiate so never off all you can afford to start as you need to be able to increase it a bit if they say no.

scazza

Thankyou for you helpful answer, all of my debt is with Lloys TSB, 2 loans, credit card & an overdraft. I think the 2 loans are in the prosess of going to a external company. I will keep you informed.

scazza

Aarrghh, im so stressed, I called the bank today to settle my overdraft of £217, once I got through they informed me there was an extra £260 added interest, even though my interest has been stopped for the last 18 months, I have been making payments through CCCS, & the guy on the phone couldnt explain why the interest had been added, I asked to speak to a manager, the guy informed me his manager was busy on the other line, & im still waiting for him to call me back.

Please someone HELP!!!!!

DarkConvict

If they had put you on 0% interest they can't just add it all on now, they made an agreement not to charge it so cannot add it. Obviously most banks do interest free for only 6 months and then you need to ring up to renew it, none the less the interest should have been added monthly not just all put on now.

The national debtline factsheet for full and finals is here - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

And a template here - http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6

Tixy

I have heard of this happening before. Arguably the creditors only agree to freeze interest not not charge it at all.
I don't think its common though so imagine you might be able to negotiate.

Were you intending to settle the overdraft in full? if you were trying to do a settlement is always best to be in writing rather than by phone.

scazza

Yes I definatley will be neogotiating, I have been paying this for 18months, if not a little bit longer, if they add this interest, this will bring the balance to more than what it was when i started. And thanks for the advice regarding the letters, I have downloaded a template letter from the national debt line, so I can put in writing that I could offer a final settlement, but after todays problems I dont think that will happen