Pay offered amount or save and settle?

wee_student_saver

I've been a bit naughty and haven't paid some creditors for a couple of months, naturally, they are contacting me asking me to pay up.

What I'm wondering is, would it be better to offer them a certain amount per month now, save for a while and then offer a settlement, or, ignore it for a while, save a bit quicker then offer a settlement?

Thanks

brainfreeze

I'm slightly confused by your post. If you can afford to save, why aren't you paying your creditors?

My advice is don't save whilst you have creditors....the interest on the debts is going to be higher than any interest you would get from savings. The only time this is not the case is if you have 0% deals, eg credit cards or buy now pay later offers....but if you have defaulted on payments already (which your post suggests) then the creditors are more than likely within their rights to terminate the 0% arrangements and go straight to whatever the subsequent % rate is.

And finally.....it's never good to ignore your creditors.

wee_student_saver

My idea was instead of paying off £20 per month for my next three lifetimes, to try extra hard to save up a lump sum and make them an offer. If I make the minimum payment every month it will take forever but if I skimp for 3 or 4 months I could make some of them an offer on a reduced amount and get rid of them in one go.

brainfreeze

wee_student_saver wrote: »

My idea was instead of paying off £20 per month for my next three lifetimes, to try extra hard to save up a lump sum and make them an offer. If I make the minimum payment every month it will take forever but if I skimp for 3 or 4 months I could make some of them an offer on a reduced amount and get rid of them in one go.

I can't understand why you would not want to pay them the minimum WHILST you skimp and save for a few months. Do you think that they will assume that you are a problem payer and therefore accept a reduced offer just like that

In one post you are saying

wee_student_saver wrote: »

What I'm wondering is, would it be better to offer them a certain amount per month now, save for a while and then offer a settlement, or, ignore it for a while, save a bit quicker then offer a settlement?

ignoring for a while means interest and charges are being piled (yes I know you can go down the process of reclaiming the charges, but what if before you do that there is a judgement making a certain level of charges legal - you are then lumbered. Everyone who already has charges and is fighting to recover them more than likely didn't intentionally not pay the bills as you are suggesting you will do.

The other point is...your user id suggests you are quite young (possibly I'm mistaken on this point though ) but have you thought what this will do to your credit record. I know that we are all trying to be debt free and that to a lot of us credit records are not a concern, but to someone who is looking to the future and possibly wanting to take out a mortgage for their first home in the not too distant future....mucking about with creditors like this (especially when you can pay) is going to be reflected on your credit record and this will surely affect the offers your are going to be able get when applying for a mortgage.

My advice is pay the creditors whilst skimping - don't save but pay everything to the creditors as and when you can to reduce the interest which is being built up.

brainfreeze

Meant to say...chuck you debt figures in this calculator and see what paying off a few pounds extra a month can do.