DMP - Full and Final Settlement Advice Pls

giddykipper

Hi there

My lovely parents are downsizing their home in a couple of years and have promised myself and my bro £25k each from the sale of their property.

I was initially toying with the idea of using the £25k as a deposit on a new property, selling my property and paying off the existing mortgage and DMP with the money from the sale.

However, looking into it (and through some advice on here) it seems that creditors are often willing to accept quite low % in full and final settlement of a debt so I'm now wondering if the £25k will cover it!?!

I've been in my DMP for 3 yrs, have paid off £9000 of my debt and owe another £60,000 to pay. If in another 2-3 yrs time (when my parents will sell their house) I've paid off another £9000-£10,000 (if I increase my payments a little) then I'm ooking at around £50,000 of debt left.

So basically I'm wondering if those of you with any experience of F&F settlements think I'll be able to successfully negotiate paying off my DMP with the £25k??

Also, how do I know if I have been served a default notice on my debts?? I got that much correspondence at the beginning of my DMP that I wasn't really sure what meant what I'm afraid.

I carried on paying ALL my minimum payments until the DMP was in place and then started paying the new reduced payments that they'd agreed ..... does that mean I haven't defaulted - or does the fact that I'm on an agreed reduced payment not make any difference? Is it still a default?

Thanks, Jo x

PS/ sorry for the long rambling post!

bottleofred

Hi jo,

Firstly regarding the possibility of any defaults, you'll be able to find out by getting a copy of your credit file. You can do this free online (usually for 30 days), but as soon as you get a copy cancel the free trial to avoid getting charged. Regarding full and final settlements, they can vary greatly from creditor to creditor. I settled some of my debts for 20% of what I owed on a 10K debt, but had to pay almost 45% for smaller debts around and below 1K. The best thing to do when you are in a position to offer is to write or phone the creditors and say you have been offered money by a family member and hope to clear off the debts. Start with an offer of around 20% (put it in writing) and wait to see what happens. If they don't reply take it as a rejection and move on to the other debts. However, they may come back with a counter offer of say 60%, but try to negotiat this down to say 25-30% and then take it from there. Don't however under any circumstances pay the debts until you've received written notification that the amount is as a "full and final settlement" to ensure that they or another debt collector can't come after you in the future for more cash. Also keep all correspondence regarding the settlements.

Good luck and don't let them bully you. The less you pay means the more money saved for something else.