dmp to full and final settlement

sillyme70

i have been on a dmp for around 18 months, prior to that i missed no payments, just got into a situation where i could no longer afford the debt payments. All creditors froze interest and ive paid a set monthly fee since. I have now come into a little money, debt stands at £32000, I have £18000.

I asked stepchange my dmp company, they have told me that i can write to all my creditors telling them the amount i have and how much i owe to each creditor and therefore how much i am offering to each one of them, so that they realise its a fair percentage.

Is this the right way to go about it? I am worried about telling them i have this amount and how much each is getting incase they just fight for more (which i dont have) or them thinking i have this money so starting up the interest on the debts again.

My house is coming to a point where it needs work doing, i couldnt afford to do this if i had paid out my lump sum and still had to pay amount to creditors.

My debt free date is over 10 years time

Any advice?

tasha999

Hi there I'm in a similar situation and have been given some good advice on here. I'm sure others with better experience than me will be along soon.

From what I've been told, it is best to start low with your offers to your creditors, £18000 would be around 56% of what you owe. If you we're to start with a lower offer, say 35% and a few accepted then you should be able to pay them off. I'm sure that you can then offer a higher percentage to the others, or accept their counter offers. This is the way I understood it but double check before you do anything

We personally are going to propose a full and final IVA, not sure if this would be right for you with you making an acceptable monthly fee into your DMP, but with a f&f IVA only 75% of the total creditors (by sum owed) have to accept. Good luck with everything

DS4215

2 thoughts:

1). Never admit how much you have available to pay. They will want all of your money and not care about the others

2). Start low (20%), tell them it is a one time offer with money from a third party and wait to see what they say. Some might accept, while others mights negotiate you upwards. But remember you can never go back down....

Monkeyballs

Hi,

I'm just starting out on my DMP and your £18k would just nicely repay my debts , thanks for the offer ;-)

On a serious note, listen to what StepChange have to say and don't be afraid to get back in touch with them if you have any further questions or concerns.

My thoughts would be;

1. How did you get this £18k? If it's redundancy then I wouldn't consider it as it will leave you exposed while looking for another job...

2. I see where DS4215 is coming from with the first comment but consider that a part of getting the DMP set up was sharing your debt details with other creditors. If they didn't have this information then they probably would not have agreed to your payments in the first place... Just be careful, start low and negotiate :-)

3. Is actually point 1 again, don't agree to anything which is going to leave you in an "uncomfortable" financial decision...

Good luck!

lantanna

Hi I wouldn't be telling them how much you have as that will leave you no room for negotiation.

Go in low and be persistent I would start with around 25% and see what happens

sillyme70

thanks for everyones thoughts

i did worry about telling them amounts, but was advised to do so by step change

you see the other option was to continue on with the dmp, and use the money to do the house updates and maybe even a small extension (i work from home and more space would mean a better working environment and potentially more income) but it just seems somehow wrong

the money is from a family member, not redundancy