Debt Settlement

ThePriceisRight

Hi,

This is my first post. I'm hoping for some advice.

My husband is currently in a Debt Management Plan (with the CCCS), and has been paying a minimal amount towards debts (that currently stand at in excess of 40k) for 8 years. Quite frankly, I would have thought they had given up all hope of getting their money back by now, but apparently not!

The CCCS have suggested that he enter an IVA as a way of paying something more towards the debts. This would run for 5 years and if he had access to any more money (ie equity in a property or something) he may have to pay a lump sum at the end. The figure suggested for the IVA is for my husband to try and pay 15% of the debt, over 5 years.

We want to look at trying to offer the creditors a lump sum each, to settle the debts now. We may have access (from relatives) to enough money to offer in a lump sum, the same amount or more than they will get over a five year period from the IVA. There is no equity in our property, so in five years time, it is unlikely they will get any more.

The CCCS will approach the companies for us, but take a 15% charge for doing this. This is money that could go to the creditors, so we'd rather not pay.

I guess my questions are these;

After 8 years in a DMP, will they think that it is better to take a lump sum if we offer one? I would have thought that 8 years in a DMP clearly indicates we have no way of paying the full amount of the debt.

Should we let the CCCS approach the creditors for us, or attempt the negotiations ourselves?

If we should do it ourselves, how should we go about this?

What sort of percentage figure should we offer as a lump sum payment?

If they agree, what do we need to do (get everything in writing of course!) to cover our backs?

I have been with my husband for seven years, and always known about his debt but it has been the absolute bane of our lives. We would dearly love to try and get rid of it!

Thanks in advance, to anyone who might be able to offer us some advice!

TakingControl

If you are in a DMP already, why not try F&F settlements on a pro rata basis instead? I did this and cut my DFD by 2 years. :j

Tixy

If you are going down the F&F route then I would say negotiate this yourself and save yourself the fees - factsheet with info on how to do this and how to calculate what to offer each creditor on the national debtline website.

However as the money would come from relatives then I would adjust the letter to say this (that way if they refuse the F&F they cannot turn round and expect lump sums towards what you owe).

So put in something like 'this money is being offered to me by a relative on the condition that it clears the debt in full. This offer will remain valid until X date and after that will be withdrawn (or will be offered to other creditors).

ThePriceisRight

Thanks guys, it is such a minefield, we're terrified of saying or doing the wrong thing and making things worse not better. Off to draft a F&F letter now... )