Inheritance and what to do...

anna_1977

I have been gifted £15k inheritance from family - this was earmarked (by them) to pay off my mortgage.

I owe £26k in debts, I have sent F&F offers to all but most debtors are rejecting offers. I need to reduce my outgoings as I'm not able to make ends meet and am currently paying stepchange £100 a month with a DMP that will take till 2042 to clear.

So...... do I clear as many debts with the £15k as I can and then go on a self managed payment plan with the others keeping the low monthly repayments I currently make. Or do i pay £15k off my mortgage and save £150 a month doing this?

Any advice would be great. I had really hoped to clear my debts but this doesn't look likely.

Thank you for any advice

zenshi

For me....if I couldn’t clear the DMP with that amount, then I would pay it off the mortgage. Then save the £150 savings in a pot to use as settlements when you can

You will be paying interest on the mortgage and not on the DMP

anna_1977

Thanks, my mortgage is only 1.25% so minimal - I'll sit and wait for all the F&F answers to come in before I do anything I think, if I'm only £1k short i can raise that I think

Pixie5740

A DMP until 2042?! Holy cow!

If you have £26k of debt it should be possible to get full and final settlements for most if not all of your debt using that £15k. That's what I would focus on not paying down the mortgage.

HairyHandofDartmoor

If it was me I would pay off the mortgage and then throw the £150 saved towards the debts to pay them off more quickly. Because you probably won't be charged interest on your debts on the DMP.

Imo this would also be respectful towards your relative as it would be using the inheritance in the way that they wished it to be used.

Mahsroh

I think views on this are going to be pretty 50/50.


Personally, I'd put it all towards the debt and with full and final settlements you may get yourself debt free as Pixie said. That would be a massive weight of your shoulders that would otherwise be hanging around you until 2042!

anna_1977

Thanks, it's a hard one - I think I will haggle with F&F's look at the outcome and make the decision from there

Thank you for all your advice

debtfreeforlife

If it were me I'd pay off the debts. BUT then make sure whatever you can afford to pay after that goes on overpaying your mortgage. Otherwise you'll feel like you have nothing to show for your 15k.

fatbelly

F&Fs should work here - Why are the creditors rejecting the offers?

What percentage have you offered?

Are the debts defaulted?

Are they with debt buyers or the original creditor?

[Deleted User]

We were left a generous sum of money by FiL many years ago with the wish that we paid it off the mortgage.

Unfortunately we didn't do that and it was used for debts and to replace my income as I was then a SAHM for four years.

In hindsight, I wish we'd paid off the mortgage with it and now we'd be in a much better place than we are now.

anna_1977

fatbelly wrote: »

F&Fs should work here - Why are the creditors rejecting the offers?

What percentage have you offered? i started at 40% but been rejected and counter offers of 70% have been sent for 2 big ones (Barclaycard now with Link).

Are the debts defaulted? Debts are mainly all defaulted, nearly 2 years ago.

Are they with debt buyers or the original creditor?

there are 9 debts and I think 4 have been old and now with Capquest, Link Financial x2 and Wescot

I'm still waiting to hearing answers from 6. I really wanted to get rid of the debt, just so it's not hanging over my head