F & F or DMP.......help!!!

villarenter30

Long story short - husband self employed, me on incapacity benefit - have four kids - debt around 50k on cards and loans nothing secured - basically husbands business suffering and really can't afford to pay - soa has been cut to the bone literally and ebaying like a demon:eek:-doing everything I can there - have written to all creditors and a few have stopped interest etc but still battling with some - my question is if I stay on a dmp it will take me about 8 to 10 years in which time my credit rating is shot or is it better to try and borrow 10k or so off relatives and make settlement offers - if offers accepted in 6 years all that crap will be off my file and in the meantime we will not be battling trying to make payments.....I just don't know - help....anything appreciated thanks :eek:

Tixy

Hi

Are you already on a DMP? how long for?
The majority of the negative info will be gone from your file in 6years anyway (as your creditors will usually default you in the first few months of a DMP and these defaults will drop off after 6years regardless of if they are fully paid at that point).

Whilst your DMP is predicted to last 8 to 10 years now I assume you are hoping that your husband's business will pick up again? so you should be able to increase payments at some point and bring your DMP end date nearer?

How long have you been on a DMP? to get F&Fs accepted at only 20% could happen - if you've been on a DMP for a while already, debts have already been sold on to 3rd party debt collectors and you have no assets for them to try to go after. If not then I doubt you will get offers that low accepted, or at least not by the majority of your crditors.

villarenter30

What I'm worried about is that we have been struggling for over a year and theres no end at the moment - if the economic forecasts are right for next year - then no I can't see the business picking up next year - thats why I'm thinking of the F & F - if I do manage to get F & F's even partial - does anyone know if the defaults for partial payment will drop off after 6 years please - any help gratefully recieved......please don't shout at me !!!

villarenter30

Sorry to keep on -but can anyone help with the defaults if I do get settlements even partial - will they drop off my credit file in six years - can anyone help with that thanks

InDeepDebt

Most of us don't shout on here and if someone does - ignore them.

Question first - the fact that you are thinking of offering F&Fs makes me think that you have some money saved away - is that correct and how much (we don't shout but we ask personal questions)?

If you get late payments and defaults on your credit file - they will drop off after six years (after they were placed there).

So, are you already on a DMP? How much are you paying your creditors and for how long?

From what I can gather, the longer that you have been on a DMP then the more likely you are to get a reduced settlement figure. If the debt has been sold onto a third party - they are more likely to accept a reduced figure.

However, if we were to play the game according to the book, we would never get enough money put to one side to pay off as a partial payment.

If I had a little nest egg at one side, I'd probably 'hide' that away somewhere - carry on paying the DMP and then, when you think the time is right - send the letter saying that a family friend is willing to lend you £x (which happens to be y%) of the outstanding amount for that creditor. Not sure whether 'hiding' money is naughty or not but after a year or two, some creditors will allow you to do a settlement.

How many creditors do you have? We aim to start writing letters next year. We have 13 creditors in total. I'll be using one of the template letters on here but will be playing one creditor off against another - going in low (say 20%) and saying stuff like "I realise that this settlement figure may be low but please advise me by [date] so that, if you don't accept my offer, I can contact xyz creditor and make an offer to them".

Also, how old are the accounts? If they are old, it may be worth looking into whether there is a valid CCA on the account. If you send off the letter requesting a CCA and don't get one back - the card maybe unenforceable. Now going down that route is very stressful (and I don't fully agree with it - but that's a personal opinion) but, if there isn't a CCA then you may be able to slip that fact into your letter when offering a settlement figure.

Also, any PPI payments on the cards? If so, can you look into whether they could be refunded? The fact that you are on invalidity benefit may mean that you were sold them in error.

Just a few things to think about

villarenter30

Thanks for taking the time to reply in deep debt - we have about 10 creditors - with 54k spread between them - dmp is £360 a month only been 6 mths but no i don't have funds it would be say 3k each off 3 relatives and thats the truth....... to be honest without them probably living with stig of the dump well before now and should have done something probably 18 mths ago which would have stopped all interest which probably totals thousands and would have been a big chunk off debt but hindsight is wonderful