How to wipe debt and keep lump sum? - redundancy

geordiejc

I'm being made redundant shortly and receiving ~26k

I have debt management plan and have ~24k debt.

I have a mortgage and a car i'm married and my wife is on maternity leave as we have just had twins.

First priority is getting another job. Is there any way i can wipe my debt and keep my lump sum ?

i know it's a long shot but i want to have my pie and eat it for once.

is there any loopholes or work-arounds which would enable this. i would consider bankrupcy if that would work!

MoneyMission2015

I'm no expert but I would think if you chose the bankruptcy route, they would take the lump sum to pay towards your creditors.


Can you offer full and final settlements to all your creditors? I've read on here people starting off at offering around 30%, although I would imagine most creditors will enter into a negotiation to try and get a bit more.

MAYK7

I may be missing the point completely, so forgive me if there's something I'm not getting... but... I don't see the problem?


You are getting £26jk and you have debts of £24k.


So you could pay off all your debts and have £2k left over?


If the debt is yours - you aren't disputing that you've had the money/ stuff/ you owe it - why would you try and avoid paying it back when you have the money to do it?

sourcrates

geordiejc wrote: »

is there any loopholes or work-arounds which would enable this. i would consider bankrupcy if that would work!

No.

Bankrucy would take all your lump sum, and your house.
There are no loopholes, only the debt solutions laid down in statute by parliament.

They are :

Bankrupcy
IVA
DRO.

Debt management is an informal arrangement.

All of which would be pointless when you have the funds to clear your debts.
You could do full and final settlements, as previously mentioned, depending on age and enforceability of each account, you may be able to settle the lot and have some left over.

geordiejc

@MoneyMission2015
@sourcrates

I'm speaking with the creditors right now forfull/final settlements

For example 2 of my creditors sold the debt to Pra Group - and they are offering 17 / 15% off the balance if i paid now.

some of the accounts are 5 years old so im not sure if this is good?

@MAYK7

Because i want to, im not asking for your moral stance or judgement. Unless you can help me achieve what is in the opening thread please refrain from commenting.

heartbreak_star

Doesn't matter how old the accounts are - it matters when you last made a payment.

Definitely go down the full and final offers route.

HBS x

Karonher

Because i want to, im not asking for your moral stance or judgement. Unless you can help me achieve what is in the opening thread please refrain from commenting.[/QUOTE]


Most people on this board are genuine and looking for help paying off their debts.

Maybe anther board would be better for what you are suggesting.

And it's not for you to decide who can and cannot comment.

EssexHebridean

geordiejc wrote: »

@MAYK7

Because i want to, im not asking for your moral stance or judgement. Unless you can help me achieve what is in the opening thread please refrain from commenting.

MAYK7 made their point perfectly politely and in a civil manner - and I wasn't surprised to see that very point being raised. You have to remember that there are a lot of folk on DFW who have been in debt - in some cases a lot more than the amount you are talking about - and have taken responsibility for that debt and worked hard to pay it off - so seeing someone who seemingly simply wants to be able to shrug off a debt not because they have no way of paying it back, but because they feel that for some reason they shouldn't have to meet their responsibilities, will inevitably grate a bit. I'd be surprised if that is the only response you get stating a similar viewpoint. When posting on a public forum, it is always wise to remember that as well as the answers you want, you may get others that you don't, and perhaps some which tweak your conscience a little.

redux

I wouldn't do anything in a big hurry.

You need most of all to find new work. If that doesn't happen for a short while, you'll be spending into that redundancy sum.

Accept that for a time things may get a bit worse before better again. At the most extreme, if you pay off all those debts straight away at near face value, then you are reducing your flexibility about accepting new jobs, stuck with the first one rather than a better one a few weeks later. Once a new job is secure, that would be the time to address the debts.

But when asking for settlement offers, don't readily volunteer info on how much you've got. From the look of other discussions here, people manage to settle at better than a 15% discount.

Have some tentative chats, saying that you're out of work, may be able to get some help to settle some of these, and maybe go for any that will take 40 to 50%, maybe up to £4000 against £10,000, and then don't rush the rest.

Also, do some thinking about how those debts accrued, where spending could be pared back, whatever the next job salary will be.

MAYK7

I wasn't offering a moral stance or judgement - I was genuinely curious if there was a reason to not do something which seemed to me to be pretty simple based on the information I read.


Have debt - have money - pay debt with money.


Your initial post did not cause me to judge you. But your response definitely did.


It's a given that a lot of financial institutions are inherently evil, and many people are crucified by debts which are worsened through no fault of their own, and remedy and recourse should be available to help those in genuine need.

takman

OP so your posting in the Debt-Free Wannabe forum stating you have £24k debt and £26k on its way!. I personally know a number of people who would be jumping with joy to be in that situation!.

But like other posters have said you really need to be looking at your spending and see why you have gotten into so much debt that you were until recently struggling to repay. If you don't address the issue now you will soon be back in the same situation!