Full and final, and money laundering

Thinwhiteduke_2

Hi

I'm after some advice please, if anyone can help.
My partner and I have been in a DMP for about 4 years and reduced a debt of over £40k to £19.5, never missing a payment.

We sold our house recently and have moved into rented accommodation, so we have some some money remaining from the sale, £22k.

We want to offer our creditors settlement offers, but we also want to save what we can towards buying a house in the future.
I know that some might think we should pay the debt in full, I understand that it seems a bit underhand, but we had a run of bad luck and this is a chance to salvage something from a bad situation.

We told Payplan that we can offer £7k as a partial settlement, they have asked if we have the funds now, but also asked where it has come from as part of their money laundering checks. What do I say, if I mention we sold our house will they want proof and then question why we can only offer a reduced amount?

Thanks.

FireWyrm

The money is yours to do with as you see fit. It is the proceeds of a sale of your asset and you have absolutely nothing to hide. If you feel you only want to offer £7K all told, then you are perfectly within your rights to do so and any advisor telling you otherwise should be advised to go boil their head. I doubt they would be quite so impertinent anyway.

foolsgold01

Hmmmm - You have sold an asset and owe £19.5k. One could argue that its money you owe rather than its your money.


Honesty is often the best policy but I do appreciate your side of things.


I appreciate this isn't helpful and probably not what you want to hear but if I see you owing a debt which you can pay off, your creditors would probably see the same.


I am not convinced this is something you can hide either as most things are traceable these days. Would you need to update your address and explain the circumstances? It could end up being a bit of a tangled web?


I know what I would do...although appreciate its tough out there but I would want to sleep well at night - something I am struggling with as it is myself!


Something to think about and good luck with what you decide to do.

-taff

I would just do as you've been advised in post 2.

Thinwhiteduke_2

Thanks all for the advice.

Two opposing points of view, and I do see why you're saying that -taff and foolsgold01.

We don't want to get into a mess with this.

Has anyone had a similar experience, or is in the same position?

FireWyrm

There is no 'mess'. They money is yours to do with as you see fit. They are your creditors not your masters. If you feel that £7K is the maximum you have available for this purpose, your creditors can take it or leave it. If they get shirty, just lower your minimum payment to £1 per month which is effectively saying, you'll never get paid, this way, you get something. They have had more than their fair share of interest over the years and probably far more than the original amount ever borrowed. The money from the sale of your primary residence is for future plans and not available at this time, that's all you need to say.

bargainbetty

You are at liberty to ask Payplan/Stepchange for a full account of your current creditors, and then contact each one directly to find out what they may be able to offer as a settlement figure. Explain that you are only able to obtain funds towards settlements, not lump repayments, so if they come up with a figure, you can haggle a bit.

Get the final agreed figure in writing before you pay a penny to them. You need a full and final settlement, not a partial that may be open to further chasing. Tell each one that you are contacting all the others to see if anyone would allow a reduced settlement, and they might be willing to take a smaller lump rather than see someone else get it.

See what happens. Personally, I agree that you should minimise the outlay if you can, but I would also rather be free and clear with whatever I have left than keep it hanging over me to avoid paying up when I have the money to be debt-free.

Your call, and I wish you the best of luck x

Puddylove

Seriously?
People are advising the OP to not repay their debts so they can buy themselves a nice house in the future?

I'd have every sympathy if, due to a change in circumstance, they were unable to repay - and not sure what 'a run of bad luck' means - but if you borrow money, you should repay it.

And if you think lenders/creditors are evil agents of Satan then don't take their cash so readily.

FireWyrm

Puddylove wrote: »

Seriously?
People are advising the OP to not repay their debts so they can buy themselves a nice house in the future?

Dont be ridiculous. The OP has sold their primary and only residence. What they choose to do with THEIR money is non of anyone elses business. They are well within their rights to seek a full and final settlement for any amount that they see fit. In truth, £22K isnt going to go very far in the housing market, but it would be all the same if they chose to use the money for private medical assistance or save it in case of illness.

Puddylove wrote: »

I'd have every sympathy if, due to a change in circumstance, they were unable to repay - and not sure what 'a run of bad luck' means - but if you borrow money, you should repay it.

They have repaid it and then some. Compounded interest over the years on the original sum probably means they have paid the original debt several times over.

Puddylove wrote: »

And if you think lenders/creditors are evil agents of Satan then don't take their cash so readily.

The base rate is .5%, most mainstream creditors are charging in excess of 20% on most forms of lending. They are making an obscene amount of profit.

Puddylove

FireWyrm wrote: »

Dont be ridiculous. The OP has sold their primary and only residence. What they choose to do with THEIR money is non of anyone elses business. They are well within their rights to seek a full and final settlement for any amount that they see fit. In truth, £22K isnt going to go very far in the housing market, but it would be all the same if they chose to use the money for private medical assistance or save it in case of illness.

They have repaid it and then some. Compounded interest over the years on the original sum probably means they have paid the original debt several times over.

The base rate is .5%, most mainstream creditors are charging in excess of 20% on most forms of lending. They are making an obscene amount of profit.

1. It's not all THEIR money, is it - as £19.5k is creditors' cash.

2. They haven't 'repaid it all and then some' as by their OP, they still owe £19.5k.

3. Yes, some credit is at 'obscene' rates - but no one forced them to sign the credit agreement. Personally I think PDL are at 'obscene' rates - would this give me the right to accept one, not repay it and steal the money? No!

I understand that some people think they are 'entitled' to a house, a nice car - and f**k the creditors, but that's theft as much as shoplifting from a big supermarket is ('well, they make obscene profits on their markup').

Urgh. Whatever happened to honesty, and keeping your word?

Giggles_Fairy

They are asking for money laundering purposes which is completed understandable. Be honest and tell them you sold your house, they will most likely want to see the money going into the bank - this is to check you have recieved the money through a legtimate source (i.e not criminal!) and is standard procedure for large sums of money in many organisations.

If they then begin to question why you are only offering 7k instead of more have your reasons ready. Why is it you need to keep 15k? Have you routgoigns increased? Other debts to pay? If it's to put in a savings account for a deposit on a future house this may be seen as not a strong enough reason. As others have said you are not obliged to pay it all off (other than the moral considerations) and your creditors will look at partial settlements. Can you not increase the offer slightly? Maybe offer 10k? Then it is approx 50% of what it left?

Your DMP asvisor should be able to give you the best advice, as they should be a medium between you and the creditors (although I understand it doesn't always work like this!) so be honest and explain your position and ask for their advice.

Also, have you considered the implications of partial settlement? My understanding (but I am sure someone will correct me if I am wrong) is that partially settling them means they will always remain on your credit file showing as partially settled, although the creditor will never pursue you for the funds. So if you intention is to get another mortgage in the future this could then hinder it?