want to speed up my debt free journey

gettingtheresometime

The last 6 years have been a financial nightmare....had my LBM (though to a certain extent it was switched on for me lol) and as a result I've got a number of payment agreements in place.

All good - payments all up to date - balances slowly coming down.

This is all well and good but I want to enjoy life and I can't do that whilst I owe these debts.

So my next years resolution is to pay off one of the smaller debts (£1500) by the end of next year but will this cause problems with my other creditors and,assuming it doesn't, what's the best way of doing this?

(By this is I mean yes I will have to make overpayments but I don't want to commit myself to a higher payment each month just in case an unexpected bill comes in.)

Bobarella

Hi
I'm afraid I don't know about DMps but there are a lot of people who do. I really hope you find a way of doing what you want as I agree paying things off quicker does make you feel better. Good luck with it.

Bobarella

moohound

Are you thinking of saving up and making a full and final payment?

bargainbetty

Rather than making overpayments to a debt, which may cause an issue with other creditors if discovered, save any surplus for a full and final settlement payment and do one at a time.

You may be able to reduce the sums due by offering 50% as a one-off to debt collectors, but ensure that you get an agreement in writing that the debt will be marked as settled and that the debt will not be sold on half paid.

gettingtheresometime

bargainbetty wrote: »

Rather than making overpayments to a debt, which may cause an issue with other creditors if discovered, save any surplus for a full and final settlement payment and do one at a time.

You may be able to reduce the sums due by offering 50% as a one-off to debt collectors, but ensure that you get an agreement in writing that the debt will be marked as settled and that the debt will not be sold on half paid.

I haven't got a DMP as such more agreements with the CC Companies to pay X amount until the debt is cleared. Some debts are with debt collection companies but again they have accepted a monthly payment and as long as I keep to this, they don't seem to have an issue.

So the best way forward would be to save the overpayment and then when the savings match the balance just pay it off? Won't the other creditor get a little suspicious though when the debt disappears?

tealady

Hi
If you want to pay them all in full then I would suggest snowballing. That is paying the maximum you can to the one with the highest interest rate and making minimum payments to the rest. When the 1st debt is cleared go onto the next one.
If you put up your SOA we may be able to stretch the budget for you so you have more money spare to pay off your creditors

bargainbetty

gettingtheresometime wrote: »

I haven't got a DMP as such more agreements with the CC Companies to pay X amount until the debt is cleared. Some debts are with debt collection companies but again they have accepted a monthly payment and as long as I keep to this, they don't seem to have an issue.

So the best way forward would be to save the overpayment and then when the savings match the balance just pay it off? Won't the other creditor get a little suspicious though when the debt disappears?

Other creditors don't see the total of the debt on your credit file, just that an arrangement has been completed. Once a debt is cleared, contact each of your creditors (you really have a self-managed DMP here) and split the completed payment sum between them. You will continue to pay the same amount each month, but the creditors all get a little bit more. As each debt clears, you throw that money at the others.

gettingtheresometime

tealady wrote: »

Hi
If you want to pay them all in full then I would suggest snowballing. That is paying the maximum you can to the one with the highest interest rate and making minimum payments to the rest. When the 1st debt is cleared go onto the next one.
If you put up your SOA we may be able to stretch the budget for you so you have more money spare to pay off your creditors

Thanks tealady but I've been a member of MSE for a long time (have only just restarted using this username for personal reasons) so I know all about snowballing etc. Luckily most of the debts are on lowish or at 0% - its just the amounts that are getting me down

I've not got alot of spare cash after the minimum repayments and any overpayments are basically money that I've saved through the 2nd purse challenge

bargainbetty wrote: »

Other creditors don't see the total of the debt on your credit file, just that an arrangement has been completed. Once a debt is cleared, contact each of your creditors (you really have a self-managed DMP here) and split the completed payment sum between them. You will continue to pay the same amount each month, but the creditors all get a little bit more. As each debt clears, you throw that money at the others.

Thanks barganbetty I was concerned that I might be kicking a hornet's nest if I favoured one creditor over another - how likely is this to happen? It was always my intention to use the money from one cleared debt to repay another ......which is part of the reason why I wanted to focus on one particular debt