Full and Final Offers

moohound

Snowballing usually involves paying the highest interest debt first, but paying smaller debts off would mean less creditors to deal with, so less work and less stress if you were going to self manage, as well as more money to share out among the others, you have to be careful about treating them fairly and not favouring one above the other though.

Some posters here have long experience of self managing and are very knowledgeable.

moohound

City1 wrote: »

Moohound,


Can I ask? How did you manage to get debt free so quickly?


Regards

The unbelievable patience and infinite kindness of a relative. I take no credit for it. All she wanted in repayment was for it to never happen again and it won't.

Tixy

City1 wrote: »

Insolvency, in what sense? We were looking to do a DMP with stepchange, but after a lot of thought we have decided to do it ourselves. The letter is the one sent out asking for advice, yes.

I meant possibly considering entering an IVA or considering bankruptcy.

City1 wrote: »

Would we be as well saving that £4000, and saving the odd £'s and then "say" in about 3 years start to send F and F letters out.

Also on a 'self managed Dmp', would it be acceptable to pay in a snowball method paying the smaller debt quicker assuming interest is frozen?

In theory in a DMP then you won't have any surplus funds for snowballing. If in practice you are able to put savings aside then it is better to save these for later F&Fs not pay extra to odd debts each month.
Your creditors are more likely to agree to freeze interest (and keep it frozen) if they believe you are paying all you can afford and believe you are treating them all fairly.
If you pay extra to a creditor frequently they may well unfreeze interest.

I'd hang on to the money for now. Once your DMP is up and running and has settled down if you find one creditor is a particular pain or won't freeze interest after a few months and others have then you may want to consider paying off that creditor with the lump sum (whether as F&F or just in full).

City1

That's very good, I could do with one of them!

City1

Tixy wrote: »

I meant possibly considering entering an IVA or considering bankruptcy.



In theory in a DMP then you won't have any surplus funds for snowballing. If in practice you are able to put savings aside then it is better to save these for later F&Fs not pay extra to odd debts each month.
Your creditors are more likely to agree to freeze interest (and keep it frozen) if they believe you are paying all you can afford and believe you are treating them all fairly.
If you pay extra to a creditor frequently they may well unfreeze interest.

I'd hang on to the money for now. Once your DMP is up and running and has settled down if you find one creditor is a particular pain or won't freeze interest after a few months and others have then you may want to consider paying off that creditor with the lump sum (whether as F&F or just in full).

That was the reason we decided against SC, we felt that they were going to take all our surplus to pay our debts. Which we felt would be of detriment to our children.


My wife and I both have our own businesses so as such our income should increase over time, which should mean we can build a nest egg. We felt that with SC we would be working to a too strict budget and our children may suffer.


We know we have got ourselves into this mess, we will get out of it, but it has to be a doable solution for us, whilst treating our creditors fair - (if that makes sense).


Cheers

shinner

I would go on my money steps(national debtline) fill in your details and look at advice. I would also suggest if you are struggling is to set up token payments and let them know you are currently seeking advice. I self managed but only had 4 debts 3 of which with one company. My advice would be to keep in touch with the company's and open your post. I also only ever let them ave my mobile number as a point of contact told them I wasn't able to take personal calls and would actually prefer letters and an email address for me to keep them informed. Xx

Tixy

A lot of people think stepchanges 'allowaces' are pretty generous. One thing to be wary of is if the statemet of affairs you send to creditors shows you with a surplus you are not paying towards your debts, or appears excessive in some areas of expenditure it could mean creditors are less likely to accept your proposals.

If your SoA is going to differ significantly from what stepchange would have prepared for you it may be worth running past one of the charities or even consider posting on here to get people's opinons on how creditors may view it (if you do post on here mention on the post that its what you plan to send to your creditors not necessarily what you spend in each area currently so you get relevant feedback).

City1

Tixy wrote: »

A lot of people think stepchanges 'allowaces' are pretty generous. One thing to be wary of is if the statemet of affairs you send to creditors shows you with a surplus you are not paying towards your debts, or appears excessive in some areas of expenditure it could mean creditors are less likely to accept your proposals.

If your SoA is going to differ significantly from what stepchange would have prepared for you it may be worth running past one of the charities or even consider posting on here to get people's opinons on how creditors may view it (if you do post on here mention on the post that its what you plan to send to your creditors not necessarily what you spend in each area currently so you get relevant feedback).

Stepchange to our knowledge haven't submitted anything, as they are still waiting for some final bits of information that we haven't sent.

sourcrates

It really depends how much money you will have to throw at your debts, as a DMP could take an aweful long time, weras an IVA is for a fixed term (usually) but as you are both buisness people i assume you will have substancial funds to make this go away quicker, just to add to what others have said, if you want to make offers to creditors to clear a debt, it is usual practice to allow the debt to go through the collection process, as an original creditor will be unwilling to accept offers, but a debt collection agency will probebley bite your hand off, but you have to wait until the debts end up with the DCA`s, which could take 5-9 months depending on the creditor, and it may involve you with holding payment to speed the process along.

Tixy

City1 wrote: »

Stepchange to our knowledge haven't submitted anything, as they are still waiting for some final bits of information that we haven't sent.

Sorry I mean if yours will be different to what stepchange would have sent if you had used them.

The debt advice charities generally use industry wide standard figures for many areas of your statement of affairs, which the creditors will be familiar with. You can certainly push these numbers a bit, but for creditors to agree to freeze interest they do need to believe you are paying what you can afford and not spending excessively.