Lump Sum to pay debts whats best way to offer to creditors?

winksharry

Hello Everyone and Happy New Year.

Just to give a brief outline of my position.

I have unsecured debts totaling 26.5k (or close enough) no priority debts. They are made up of one loan lots of credit cards one overdraft and a few payday loans.

I am currently paying minimal amounts to all creditors (£1-£10 per month) and in most instances have been for at least 12 months and in some cases nearer 36 months.

The last year has been a bad one personally suffering severe depression anxiety and a mental breakdown of some-kind. I am now in a better state of mind but unsure if/when i can/will return to full time work (seems doubtful in the next 6 months anyway) previously worked for all my working life i am in my early 30s.

Sorry for that distraction the reason for my post is a family member has kindly offered a lump sum of £9000 (that is the maximum they can afford) on the proviso it pays off my debts.

As far as i can tell from lots of reading i have two realistic options. A lump sum IVA through a company the downside of this is the fee this incurs which i believe comes out of the lump sum of around £3-4k. This would not leave much and i am assuming making creditors very unlikely to accept the offer.

The other option is for me to work out percentage offers on a pro-rata basis to each creditor for a full and final settlement and make these offers in writing at the same time. I appreciate the lump sum is close to only 35% of my total debt. However they are currently not likely to get anything like this amount. I have had brief conversations with some of my creditors recently when changing my addresses with them who have indicated some quite big discounts to be available (not formal but promising and without any negotiation).

So i guess my questions are, should i go for a lump sum IVA? If i should just contact my creditors directly should i offer a lower lump sum to start and work up to the 9k figure? The downside of doing it myself is they all need to agree i believe with the lump sum IVA this is not the case....

To clear this or at least very nearly clear it would release a massive burden on me mentally. I apologise if this is in the wrong section or not a correct questions to ask.


I have another question if that is ok probably not as important at this stage. On my Noddle credit report i have the following entry..

Wageday

£ 187

01/12/2015
Up to date


I am unsure why this is showing as up to date infact the last few months it has the mark of UC (under review). This has confused me totally. This is the only lender i have not been in contact with to agree minimal repayment as they did not reply to emails and have not chased me at all any stage, no idea why this would be?

Thanks for all your help in advance.

John

sourcrates

Hi,

A lump sum IVA will reduce your available pot of cash due to the insolvency fees you will have to pay, it's something to think about, but last resort I would say.
You would need to convince 75% of your creditors, by value of debt, that's it's the best option for them, to be approved.

You should challenge the payday loan debts, written complaint to each lender, as you say you were having problems, there is a culture of loans been wiped, and interest and charges been refunded at the moment, that's something you should explore straight away.

How old are your other accounts ?

If a few years have passed since you opened them, CCA requests should be sent, as there's the possibility of missing paperwork.

You need to do these things first, to determine your next steps !!!

winksharry

Thanks for reply Sourcrates

"You should challenge the payday loan debts, written complaint to each lender, as you say you were having problems, there is a culture of loans been wiped, and interest and charges been refunded at the moment, that's something you should explore straight away."

I should have mentioned but was wary of writing to much that Wonga have i believe already wiped my lending with them (i believe this an automatic thing) Any ideas for a template letter i can send to the others?

"How old are your other accounts ?

If a few years have passed since you opened them, CCA requests should be sent, as there's the possibility of missing paperwork.
"

Thanks for this, i did do a CCA request on most of the older lending a good while back and received all of the paperwork. The only one i should possibly write to is the Barclays loan as that is the biggest debt as was originally a staff loan that must be nearly 10 years old now.

Again thanks for your help

sourcrates

Lots of information here :

http://debtcamel.co.uk/worried-about-debt/payday-loans/

winksharry

that is a very interesting site Sour, i am currently collating all the information i need as i type.

Am i correct in thinking Noddle will display all of my payday loans?

Thanks again

National_Debtline

Hi winksharry


It can be hit and miss as to what information is recorded with which credit reference agency, especially where payday loans are concerned. If you don't find everything you expect to on the Noddle report, it's worth checking in with Experian and Equifax as well - a statutory credit report will cost you £2 with no commitment beyond that.


Dennis
@natdebtline

DoctorLove

Hi Winks,

I'm a long time reader but recent contributor - Sourcrates knows his (her?) stuff!!!

Noddle is pretty good but they don't always include lenders and some can be under their licence name rather than their trading name so it's hard to figure out who is who.

How are you currently making repayments? Is it through a DMP managed by someone like Step Change or have you made agreements on your own?

I defo agree with Sourcrates about challenging your PDL's as you may be able to get a refund on some/all which means they'll either be written off or significantly reduced - you could also get a little more to add to the £9k

Which brings me to my next point... Is the £9k a loan or a gift? You might want to clarify this if you're not sure because being in debt to a bunch of faceless lenders is one thing but ruining a relationship and souring family ties is something WHOLLY different and is a mistake many people on this site have made in the past...

sourcrates

winksharry wrote: »

that is a very interesting site Sour, i am currently collating all the information i need as i type.

Am i correct in thinking Noddle will display all of my payday loans?

Thanks again

As Dennis says, check all three CRA's.

sourcrates

DoctorLove wrote: »

Hi Winks,

I'm a long time reader but recent contributor - Sourcrates knows his (her?) stuff

We had this out at Christmas, lol, defo a he !!!!

winksharry

"How are you currently making repayments? Is it through a DMP managed by someone like Step Change or have you made agreements on your own?"

arrangements on my own

"Which brings me to my next point... Is the £9k a loan or a gift? You might want to clarify this if you're not sure because being in debt to a bunch of faceless lenders is one thing but ruining a relationship and souring family ties is something WHOLLY different and is a mistake many people on this site have made in the past..."

good point it has been confirmed to me it will be a gift and i will not be expected to pay it back.

Thank you all for your help i have tried to quote the replies but failed!

Feel a bit better already tonight will get onto the other agencies to be sure.

Thanks

winksharry

For my own records (to update as i go along)

Have signed upto credit expert (experian) await pin in post.

Signed upto Equifax everything matches with Noddle even the random payday loan which i now have more details for. Interestingly it is the only payday loan that shows up on that report (not sure why?) it also shows as up to date payment wise. At least i can write to them now.

Thanks again for all your help