DMP and early retirement

lifewaiting

Hi

About 15 months ago I entered into a DMP as my unsecured debts had spiralled out of control and my income had reduced due to pay cuts and bonus freezes.
I am currently managing the monthly payments and keeping my priority debts up to date but the DMP has about another 10 years to run.
I have now got the option to take early retirement from my job and draw a smallish annual pension and a lump sum. This is quite an attractive option as tbh, I don't think compulsary redundancy is far away.
If I took the maximum pension lump sum allowable, I would be able to offer a F & F settlement of about 40% of my outstanding debts. Do you think this would be acceptable to my creditors bearing in mind that I would no longer be able to meet the monthly DMP payments unless I got another well paid job. Would they hold it against me that I had voluntarily left my job ? Also, would they look for more in F & F settlement as I have some equity in my house ?
The other alternative is that I could find another job (which will definitely have a lesser salary) and keep up my current DMP until my lump sum savings run out and then I would have to consider selling my house.

Or should I turn down the early retirement option, carry on as I am and hope I dont get made redundant before my actual retirement age and my DMP finishes ?

Superbiatch

I've seen people on here get settlement figures as low as 20% of the original debt, are your debts now with DCA's or still with the original companies you took them out with? You're more likely to get a more reduced settlement figure from a DCA going by what I've read on here.

I think it might just be do-able and seems as though its your best option imo but i'm sure someone with more experience will be along shortly to advise you better than me

lifewaiting

I am not sure how to go about negotiating the lowest possible F & F settlement but will learn quick when the time comes if this is feasible !
I would still have to find another job as my monthly pension wouldn't be enough to live on but I would be debt free (apart from mortgage) and it would be a fresh start.
I suppose my main worry is that if my creditors know I have voluntarily left a well paid job, they might want to try to recoup some of their money by going after the equity in my home. Not sure if they work like that though or if they look at F & F as being a bird in the hand ??

dancingfairy

I don't suppose you have to tell them you opted for early retirement? perhaps you could be vague as to where the funds had come from? You could start with the largest creditor, give them a time limit to accept the offer or not and then say that funds will be offered to another creditor - don't forget you would need to keep some money back to live off and you would need to check the benefit situation carefully as you may not be entitled to any benefits if you get rid of all your early retirment money. I'm not sure but 40% may be quite high if any of the debts have gone to DCA's.
Perhaps its worth phoning one of the debt charities for advice?
It appears to be a good plan on the surface - even if you only get some to settle early,especially if the alternative for them is likely to be less money if you have to find a lower paid job. The only thing that worries me is the pension aspect of it and how you would live when a pensioner.
df

lifewaiting

Thanks DF
I thought maybe I could say that I would be unable to continue my existing payments into my DMP as I will no longer be in full-time employment but that a family member had offered me funds to make F & F settlements offers ?
If they all accepted, my monthly outgoings would be much less but I would still need another job to supplement my pension until the mortgage is paid off.
I wouldn't be any better off financially than I am now but at least I would have the piece of mind that my debts had been cleared - albeit by partial payment.