My companies have all frozen the interest (DMP)

mullery83

I have 11 lenders in my debt management plan.

Before i'm heavily judge I am in debt due to a messy seperation and I am quickly bouncing back.

Now here's the thing, should I plough my excess money into an ISA as I can see little benefit in over paying on my DMP through payplan?


If so what's the current best easy access it appears Santander?

matttye

If you're trying to make your money go further, put it in an ISA or a high interest current account (FlexDirect / Santander 123 / Lloyds Vantage / RBS Vantage).

I personally would rather be debt free sooner.

mullery83

matttye wrote: »

If you're trying to make your money go further, put it in an ISA or a high interest current account (FlexDirect / Santander 123 / Lloyds Vantage / RBS Vantage).

I personally would rather be debt free sooner.

Yeah thats my dillema. ill have to have a good think

matttye

mullery83 wrote: »

Yeah thats my dillema. ill have to have a good think

What I just said is pretty silly actually. If you put money in an ISA / high interest account and let it accrue interest, you can still use the savings + interest to pay off the debt (just a bit further down the line rather than as soon as it comes in) and you will still have made money. Plus you'll have an emergency fund available.

mullery83

matttye wrote: »

What I just said is pretty silly actually. If you put money in an ISA / high interest account and let it accrue interest, you can still use the savings + interest to pay off the debt (just a bit further down the line rather than as soon as it comes in) and you will still have made money. Plus you'll have an emergency fund available.

Thanks Matt I just had a light bulb moment also

NS&I ISA it is i think

wildingb

Just pay off your debts.

I don't know your precise details but the interest on an ISA is tiny. At 3% you are making a grand total of 30 pounds per 1000 invested.

Meanwhile your debt is a weight around your neck.

My advice is save 600 for emergencies then pay that debt off as fast as possible. Until these debts are cleared your financial life is on hold.

bargainbetty

You also have the option of setting up an emergency fund (which is an excellent plan) and then putting the remainder into a savings account with the intention of applying for full and final settlements in a few months time. Where your debts have been sold on to a DCA, you may find that you could obtain a sunstantial reduction on the total debt if you can make a lump sum payment.

Follow the advice on here about doing it though: Write with the offer when you have the money, give them two weeks to respond, tell them you 'can obtain' the money, rather than you already have it, and only make the payment if they agree in writing that the payment will be considered full and final and the account will be closed, and not sold on.

Best of both worlds?

fatbelly

mullery83 wrote: »

Thanks Matt I just had a light bulb moment also

NS&I ISA it is i think

NS&I will not be connected to any of your debts so that is a good choice for your savings pot.

This WILL help you to become debt free as fast as possible - when you have around 30% of the debt balance saved in your ISA you can start to offer full & final settlements on the debts in your dmp.

Factsheet | Full & Final Settlement offers

cross-posted with bargainbetty!

jazza6

Well done you - no-one should judge. Can you tell me how you went about getting the debt management plan as I think I need one desperately.

moohound

jazza6 wrote: »

Well done you - no-one should judge. Can you tell me how you went about getting the debt management plan as I think I need one desperately.

Stop spending

Don't apply for more credit, if you ask for credit you know you cannot pay back it can be fraud.

Get your information together: budget, income, essential outgoing and account numbers and outstanding amounts.

Open a basic bank account with a bank UNCONNECTED from your creditors. Never bank where you have debt.

Call Stepchange - a charity or PayPlan - paid for by the credit industry.

Stepchange would be my choice if I started now.

Good luck with it:)