Any help would be great on clearing debts

rplummer01

I was hoping I could get some help and advice with my current situation and help to get onto the property ladder.

I started on the debt snow ball in 2004 which spiraled out of control with me having maxed credit cards, loans with of other loans this problem continued until roughly 2006 with me having 2 loans and 1 credit card I reached the end of my tether I was advised by a friend to contact a firm called Debt Free Me help get my outgoings under control.

I have been paying a manageable amount to my creditors with the management firm taking a fee since, last I checked I approx 11000 outstanding.

Whilst this was a bad time for me financially I am in a better place now and I have been saving with some recent PPI payment I have about 6000 set aside which I was hoping to make an offer to my creditors but I don't know how the best way to start with this process or even if it's enough.

Want to get these debts cleared asap as I was hoping to improve my credit score as I'm was planning on trying for a morgage in about a year.

If anyone can help me out I greatly appreciate it.

Ilona

Hi, First of all you need to stop paying a fee charging company to sort out your affairs. Have a look at these free debt management charities, move your account over to one of them. You are throwing money away by using Debt Free Me, this could be going towards paying off your debt.

http://www.payplan.com/
http://www.stepchange.org/#

http://www.moneysavingexpert.com/loans/debt-help-plan

Ilona

Tixy

As Ilona says if you need to continue in a DMP then switch to a free DMP and save yourself the management fee each month.

If you are in a position to make reduced full & final settlement offers to your creditors then you can do this yourself see this factsheet and template letter - http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Don't make settlement offers through your DMP provider - as they will charge you.

Either way I would suggest you give notice to debt free help that you do not wish to continue with them. If your creditors don't accept your settlement offers then you could then either sign up to a free DMP provider or self-manage your own DMP by paying your creditors direct.

LydiaJ

I agree with Ilona and Tixy. The agency is only going to eat up some of your money that could be put to better use.

There are probably all sorts of things you can do to make your money work harder for you and get the things you need more cheaply. Why not start a diary on the debt free diaries sub board, and see if the folks there can encourage you along the way?

rplummer01

Thanks for all the advice, I'm going to look into making offer to my creditors as I have some money available to me at the moment following the guide on the link that Tixy posted.

While the examples on the site show an offer of 4000 against a 10000 debt, but is there any guideline on what creditors accept or is it luck or persistence that get the settlement?

I have 1 loan with Capquest which was formally HSBC at a balance of 7545, a second loan with Halifax of 2612 mad finally a Credit Card with 2441 which totals 12598.

What would you suggest is a reasonable offer to make, when I could get in the religion of 4000 available but I could have some help to get some more from family and friends that are willing to help which could get me up to 6000 at a push.

Thanks all you've given me the drive to get this sorted once and for all.