Time and debt reduction

sourcrates

changeforbetter wrote: »

Thanks for the replies above, very helpful and appreciated.

I did have one additional thought on this though (which may apply to others in similar cases).

One thing that could possibly reduce the time, is making a later Final Settlement offer (if I could get anything close to a lump sum at any point)?

I guess that's how many look to shorten the final push in DMPs?

Yes that can work for you.

Usually works best with old debts that have been bounced around various DCA's for a number of years though.

Although saying that debt collectors are always looking for a quick profit, dosent work that well with original creditors though, not much incentive for them to take an offer, as they normally can't be bothered and just wash there hands of the whole thing, by selling your debt on.

changeforbetter

sourcrates wrote: »

Yes that can work for you.

Usually works best with old debts that have been bounced around various DCA's for a number of years though.

Although saying that debt collectors are always looking for a quick profit, dosent work that well with original creditors though, not much incentive for them to take an offer, as they normally can't be bothered and just wash there hands of the whole thing, by selling your debt on.

Thanks for that advice, hopefully I'll need it in future!

As I've mentioned elsewhere, my other strategy is to try and throw the occasional lump at the debt, to also reduce it. Both of these strategies of course dependent on what I can bring in income wise. (crosses fingers).

abby1234519

Google Vertex's debt reduction spreadsheet

It shows you how long a snowball will take and also you can enter where you might for example receive a bonus 4 x a year to see how that affects the DFD

National_Debtline

Hi changeforbetter


It may be that Stepchange have suggested the more flexible, albeit longer, DMP option for now as they are aware your occasional flurries of extra income could help reduce the duration of your plan in the long term. Even though you are told a notional duration e.g. "11 years" at the start of a DMP, there will be very few people whose circumstances remain utterly static over that period, so it is always a qualified estimate, nothing more. It's a lot easier to begin on a DMP and later switch to an IVA than vice versa.


Good luck tackling your debt, whatever the route.


Dennis
@natdebtline

changeforbetter

National_Debtline wrote: »

Hi changeforbetter


It may be that Stepchange have suggested the more flexible, albeit longer, DMP option for now as they are aware your occasional flurries of extra income could help reduce the duration of your plan in the long term. Even though you are told a notional duration e.g. "11 years" at the start of a DMP, there will be very few people whose circumstances remain utterly static over that period, so it is always a qualified estimate, nothing more. It's a lot easier to begin on a DMP and later switch to an IVA than vice versa.


Good luck tackling your debt, whatever the route.


Dennis
@natdebtline

A good point, thanks. That may have been an aspect of the advice, yes, as they are aware my work is often short term and contracted yes. (It also makes my income calculations rather complicated!) I suppose this often goes for contracted professionals in many careers. My aim/dream is to have a particularly good year and make a real dent in the full amount I owe - that would probably need me to be employed by about 4 or 5 different contracts, when I usually scrape a max of 2 in a year. But, it wouldn't be an impossibility in future.

Muttipops

Does the nature of your work mean that you have to always be available for work contracts at short notice, or can you have another job too, a sort of evening type thing that wouldn't interfere with day job, but pays for the basics of life?
I am sure you have tried all to get out of debt and thought of many solutions to increase income; what sparked me off thinking was that some contract work goes in cycles and lean years and that instead of waiting for it to pick up, which sometimes it isn't going to for a while, another job might help tide things over.
I hate to think of you with this weight of debt on your mind.

changeforbetter

Muttipops wrote: »

Does the nature of your work mean that you have to always be available for work contracts at short notice, or can you have another job too, a sort of evening type thing that wouldn't interfere with day job, but pays for the basics of life?
I am sure you have tried all to get out of debt and thought of many solutions to increase income; what sparked me off thinking was that some contract work goes in cycles and lean years and that instead of waiting for it to pick up, which sometimes it isn't going to for a while, another job might help tide things over.
I hate to think of you with this weight of debt on your mind.

You are actually spot on, as this is something I am trying to develop, basically additional self-employed work. So far, that has been slow and generally very little in terms of income. But, it's certainly something I am considering and trying to develop. Thanks for the supportive ideas, I think it's definitely something anyone on long term debt plans should consider.

enthusiasticsaver

I think you need to look at it as a mortgage or very long loan/tax and maybe keep some of your additional income aside to offer F and F settlements further down the line to get rid of it quicker. Making lump sum reductions will also reduce the term obviously so although it is 11 years at the outset it is rare that the term stays static due to changing circumstances over that period of time. How old are you?

changeforbetter

enthusiasticsaver wrote: »

I think you need to look at it as a mortgage or very long loan/tax and maybe keep some of your additional income aside to offer F and F settlements further down the line to get rid of it quicker. Making lump sum reductions will also reduce the term obviously so although it is 11 years at the outset it is rare that the term stays static due to changing circumstances over that period of time. How old are you?

I'm 46 (though sometimes feel about 10 years older than that) :undecided

It was thinking about being so much closer to official retirement kind of ages that partly stopped me in my tracks in terms of the DFD predictions!

I agree with your suggestions you posted, about strategies to reduce this time for sure, many thanks.

beckstar1975

I started off with £62k debt in a DMP estimating it would take 21 years to pay off, we were only paying about £180 a month if memory serves. Whilst soul destroying we only now have 7 more payments to make having upped it significantly, the big difference was we knew we would have more income available when the kids were out of nursery (were paying £2k a month on fees) - else we wouldn't have even been allowed to start a DMP.

You will surely have an annual review each year so it may be in a year or two if things hasn't really changed that they recommend another debt solution for you?

Good luck, starting is the hardest bit