DMP - paying creditors early

Jane_E_B

Hi All, We are currently in the middle of a DMP, but we are starting to get letters through from creditors offering us to pay half and the account will be settled. However as I understand it, our records will show that the debt was settled, but partially paid.

Seems too good to be true, if we are fortunate enough to be in a position to pay some of them. But is this going to affect our credit rating later down the line and will we regret not paying the debt in full? Or should I stop over thinking it and pay what we can?

Thanks for any help or advice if anyone has done something similar.

National_Debtline

Hi Jane

Welcome to MSE. Usually creditors will mark your credit report as a partial settlement when you have come to an agreement to pay a reduced amount to settle the debt. If there is already a default registered on your credit report, the debt is going to drop off 6 years after the date of the default. That may mean even if a partial settlement is registered the debt could be dropping off in the not too distant future.


If there is no default registered, the debt will drop off 6 years after the date of the partial settlement.

Also bear in mind if you do settle your debts you need to be fair to all of your creditors. Everyone needs to be offered a fair share of the lump sum you have available. If you only pay off some of your debts your remaining creditors could become difficult to deal with.

Susie
@natdebtline