How to use my PPI

southofthemiddle

I recently came to the long overdue conclusion that I have to sort out my debts. I am in the process of setting up a DMP with Step Change.

While going through all my paperwork I discovered PPI on a loan that'd I'd not previously been aware of. I used the form on this site to make claim, and I've just received notice that I'll be receiving a cheque refund of £2,800. My query is about how best to use this.

I currently have 2 credit cards that are charging very high interest rates. My payout will just about cover these, so my instinct is to use the payout to clear these debts.

However, there is still approx £1,200 left from the loan that generated the PPI claim (Egg). Would it impact my DMP application if I didn't clear this off? The interest on the loan has been frozen.

Or should I just give the entire payout to Step Change to distribute between my various creditors? The interest on the majority of my debts has been frozen which is why I'm keen to clear off the 2 credit cards that are costing me a fortune in interest.

Thanks in advance for any advice.

sourcrates

Clear the cards first as they are, as you say, costing you a small fortune in interest, then cut them up, throw them away, and never use them again !!!!

besswales

i'm sure I've read on this site somewhere that once your dmp is set up that step change would need to distribute to all creditors not to favour one over the other so if you want to clear the credit cards maybe you do so before its set up. I am sure someone will be along shortly who can help more than me. Whatever you decide you will still be paying off some of your debt so good luck on your debt free journey!!!

southofthemiddle

Hmm, that's what I was thinking about the distributing it evenly. Does anyone know if I can stop the DMP apploication process with StepChange and then restart it with the new balances once I've cleared the interest charging credit cards?

southofthemiddle

Sorry to bump, but can anyone give any more advice?