DMP and windfall

Echoecho

Hi there,

This is my first time posting to MSE. I hope that someone might be able to offer a little advice.

I have a DMP with SC, which I am halfway though. I have about 2.5 years to go and paying about £600 a month. Generally speaking the DMP is fine and I get by, however I do find that I really don't have any contingency money so when a car service, birthday or anything unexpected pops up....its a struggle.

I lost my Mum just before Christmas and it has been hard as I haven't had any spare cash to do a few things to lift my mood. My Nan who is in her 90s has said that she would like to give me some money now, as I could benefit from a lump sum and has offered £9000. She has said that she wants me to have £5000, wants £1k to go to each of my children when they are older and has asked for me to be custodian of £2k for my brother who has learning disabilities, should he need anything in the future.

I am nervous about accepting this money for the following reasons.
Would I be obliged to use the money towards my DMP? It would make me much less anxious to have a rainy day fund and know that I could pay for something unexpected if it crops up. I am paying off my DMP well and can see the end in sight, so don't really want to start thinking of settlement.
If I were to pay the money into my bank account, would the bank get wind and insist on me putting the money towards the debts I hold with them (overdrafts and loan)?

Thanks in advance for any help!

sourcrates

No you are not "obliged" to put this money towards your DMP.

A DMP is an unregulated agreement between you and your creditors, there is no windfall clause, it's your money to do with as you choose.

On the other hand, if you owe your bank money, they can take what you owe them from it using the right of set off, did you not open a new account with a bank with whom you have no debt ? You should of done.

Basic first rule of a DMP.

Echoecho

I opened a new basic bank account with Barclays. 2 old accounts with Barclays were closed (small overdrafts remained on them and became creditor accounts on my DMP) also I had a loan with Barclays which became part of my DMP too!

I'd hate for my kids and brothers money to be taken to pay for my past mistakes!

sourcrates

Echoecho wrote: »

I opened a new basic bank account with Barclays. 2 old accounts with Barclays were closed (small overdrafts remained on them and became creditor accounts on my DMP) also I had a loan with Barclays which became part of my DMP too!

I'd hate for my kids and brothers money to be taken to pay for my past mistakes!

Ideally you should open a new basic account with someone you don't owe money to, otherwise it is at risk.

fatbelly

Echoecho wrote: »

I opened a new basic bank account with Barclays. 2 old accounts with Barclays were closed (small overdrafts remained on them and became creditor accounts on my DMP) also I had a loan with Barclays which became part of my DMP too!

I'd hate for my kids and brothers money to be taken to pay for my past mistakes!

You shouldn't be banking with Barclays!

If you want to use the lump sum to clear your debts faster, have a look at the Full & Final Settlement thread

mdnn85

You're not obliged to pay this to your debt management plan however if I were you I would open an account with a bank that you have never owed money to and keep the money there so that you know it's safe.

National_Debtline

Hi there,


I would certainly agree with the other posters about opening a new basic bank account, away from Barclays for this lump sum.


You mentioned that your nan would like you to put £2k aside for your brother and £1k each for the children. Can you clarify, how much would this leave for you personally and how much is owed in your DMP? You are not obligated to use this money for your DMP but could it be a more cost effective solution?


Laura
@natdebtine