Best way to clear DMP at lower rate?

bananah

Hi,
We've decided to sell our house and pay off our DMP, it was a tough decision but the right one, we think.

I'm keen to discover the best way forward for settling the debts, many people have advised that creditors will accept maybe 50% of the original debt. We have paid 1 or 2 off this way, but the banks and major credit cards seem very reluctant to settle at anything less than 100%.

Is this everyone's experience? Are there some tips and tricks we should think about?

Thanks for any advice, the house is on the market now, so hopefully it shouldn't be too long.

DS4215

Don't tell them how much you have, and make them an offer of say 25% as a loan from a family member. See what they respond with. Worst case they turn it down and you increase your offer until it is accepted. Start low and work high.

Tixy

Hi

Certainly if your debts are still owned by creditors it can be harder to get them to accept reduced settlements. They often will just before they sell it on, but some won't negotiate before that point, They'll also look at how much less you are paying than the original repayment and how long in total it would take to repay your debt based on your current DMP repayments (if your payments are relatively high they are less likely to accept a reduced offer, and the shorter the estimated payment period then again the less likey they are to reduce the amount).

How long have you been on your DMP? Have your creditors all issued defaults?

You say they seem reluctant to settle for a reduced amount - have you actually written to offer a reduced F&F? or have you just spoken to them on the phone to see if they might?

bananah

Hi,
Thanks for the replies.
We have sent letters a while ago to Barclays, asking what settlement they would accept - they stated only 100% ('in line with our terms' etc). We haven't been in touch for some time.

Its true that we were paying back quite a lot, and have paid about 30k back thus far, so they may all just be happy with that. Should we write new letters, stating we will pay a certain amount due to a family loan? (e.g. £3,000 of £9,000 etc).

Will the larger banks take less?

thanks,