Paying off debt for less than its worth?

wannabedebtfreeby30

Hi all

I am in the fortunate position of having recently come into money; enough to pay off all my debt.

Is it possible to settle the debt with a lump sum for less than you owe to each creditor if they agree to it? Do you have to declare how much cash you actually have legally?

From a moral point of view I suppose I ought to clear the lot but I would love to be able to do something better with the money like travel the world. I won't be able to do much if I spend it all on clearing the debt.

I recognise I am really lucky and perhaps this sounds selfish. But with all the interest I have paid over the years I would not feel guilty to the creditors!!

Any advice; legal, ethical or practical would be gratefully received. I apologise if I have missed an article or something on this, but I've had a scout and could not find anything...

Yours

Wannabedebtfreeby30

billinghamfan

How old are the debts and have they been moved to debt collectors?

wannabedebtfreeby30

Yes, a few were moved to debt collectors. Two have been cleared already (the smaller ones) but there is still one with a debt collector on behalf of HSBC for £650, the rest are direct debts. Most of them date about 10 years now, they are a legacy from my uni days...