Advice on paying off debt with inheritance, or not

krazyk

I should receive my inheritance early next year of about £55-65k and looking for advice.

I will use this to pay off my debts. I negotiated with all companies to stop all interest and charges so I am not paying any extra than the debt now. I have repayment plans in place and plan to clear 2 of the 3 cards by the end of 2015, leaving only the big one (which has a default). I have a catalogue bill to pay but again no interest on that so plan to carry on the monthly payments as normal. Lastly, I have a PC I've financed but I'm already planning to pay that off monthly 2 months before the interest kicks in (which will mean I pay no more than what it's worth bar a small admin fee). So basically I will continue with my debt repayments as normal as there is no advantage, that I can see, from paying any of them early.

I plan to get a Capital Credit Card (a 'bad credit' one) to start building up my credit again. I vowed to never get a CC as they are the reason why I went into debt in the first place but it seems you need one to get a good credit record. The irony. Anyway, I'll put one or two regular bills on it and set-up a transfer to pay the full amount off each month. Hopefully with this and the removal of the defaults by 2017/18 my credit rating should be at least in the 'good' and allow me to get a mortgage.

Does this sound like a reason plan?

rolls99

When you get the inheritance, PAY OFF the lot. (although you don't say what your total debt is)


Don't leave a penny outstanding, even on the PC.

For the moment, pay what you have to and no more;


When (if) you get the Capital one (or any other card) there's no need to put "a couple" of bills
on to it - in fact don't.


Just use it carefully for petrol or shopping, and pay it off each month and you'll pay no interest.


Whether you spend a tenner a month or a couple of hundred doesn't matter. Clear it and it has the same effect.


Your inheritance is a chance (which a lot of people don't get) to CLEAR your debts - wipe them out totally and forget about them - which will then (even if you have defaults) is a "clean break".

krazyk

Yes that was my thought, pay what I have to so that's currently the plan. There is no advantage to pay off the debts but to continue as per my existing repayment plans.

My thought about the couple of bills on the CC card was just to automate things, nothing more. :-) Thanks for the tip though, noted. :-)

Oh yes, I can't wait to clear them, I've have the debts for many years.