Paying off DMP running over 13 years old 30 August 2018 at 12:32AM edited 30 November -1 at 1:00AM in Debt-Free Wannabe 37 replies 8.8K views

Debtfreewannabe1

Hi,

In 2005 I entered DMP of over 40k inc all final fees etc I think my actual debt was around 32k. I currently have 17k left. Long story short Bankruptcy & IVA was not for me due to work and potential job loss. Paying at £300 a month (before their £50 fee) it works out I have around 5 years left to pay.

Actual figures are hazy I just buried my head in the sand and just got comfortable paying the £300 a month. My circumstances are changing and im getting married my future wife would like a child and a house. I have been offered cash (family loan) to pay this balance off and been asked to see if i can get full and final figures. Then in turn I pay back that family loan at the rate of £300 a month and hoping to do that in 2 years or less.

I have 3 creditors, Cabot (Egg) 2x Wescot (Lloyds credit card 7 loan)

What are the chances of me offering up to £7200 (£300 x 24) and getting a settlement between the 3. Any success stories? Anything I should watch out for? Should I Just leave the DMP running for another 5 years as none of the debts on my credit file?

LOVEHB

I think as you have been under a dmp for an extended period of time the chances of you settling at partial settlements are high.

I would start in offering 10% of the remaining debt. I managed to get 50% off mine with a bit of back and forth with the creditors but i suspect you are in a better position than me i hadnt been in my dmp for long (18 months). Ive noticed from other posts and research that people who had been in DMPs longer and owed more were managing to get lower partial settlements accepted.

Make sure you get all settlement offers in writing and that they will mark your credit file and partially settled.

Good luck!

fatbelly

You can but try.

£7200 against 17k is 42% which I think may be optimistic, particularly with Lloyds.

There is a thread for these deals, and I think I can link to one poster who successfully achieved a lot of them. Lloyds and Cabot both feature

https://forums.moneysavingexpert.com/showpost.php?p=69978335&postcount=1179

Suseka97

Hi there, you've had good advice so far -but I just wanted to ask a question. You say you're paying £300 per month, less a £50 fee. So have you been using a fee charging company? If so, whatever else you do or don't do - please stop paying someone else to handle your DMP.

You are better off going self-managed and then start your F&F ball rolling. Whether you get good discounts or not, or have to play a slightly longer game - at least you'll be in control and all of your £300 can be thrown at the debt in the meantime.

sourcrates

Agreed, Ditch the fee charging DMC.


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MEM62

Suseka97 wrote: »

Hi there, you've had good advice so far -but I just wanted to ask a question. You say you're paying £300 per month, less a £50 fee. So have you been using a fee charging company? If so, whatever else you do or don't do - please stop paying someone else to handle your DMP.

You are better off going self-managed and then start your F&F ball rolling. Whether you get good discounts or not, or have to play a slightly longer game - at least you'll be in control and all of your £300 can be thrown at the debt in the meantime.

+1 On that.

OP, there is no need to pay someone to manage your DMP. You can do it yourself or there are debt charities that will do it for you. Over the 13 years that this has been running you will have paid the debt management company £7,800 that could have been used to reduce your current debt to less than £10K.

D_M_E

Whatever you decide to do, don't do full and final offers through your DMP provider.

They have been taking a cut of your payments so far and that could have all gone towards your debts with a free provider, probably making your debt free day a lot earlier.

If you do make F&F offers through the DMP provider they will either add on their fee or take a cut of what you offer - as advised above, ditch their services, go self managed then make your F&F offers and, as it's been such a long time I would start around the 10% mark.

Debtfreewannabe1

Thanks for the advice, I will start contacting DCA's.

I have no intention of using the DMP for F&F. Ive just been lazy and put off doing reviews with them.

I just paid the monthly fee for convenience and without the stress.

D_M_E

13 years at £50 a month - that's £7800 SEVEN THOUSAND EIGHT HUNDRED QUID you have paid in fees to the Debt Management company, all of which could have gone towards your debts and brought your debt free date a lot closer.

sourcrates

Debtfreewannabe1 wrote: »

I just paid the monthly fee for convenience and without the stress.

You could of had the same piece of mind for free with a debt charity.

Lesson learned me thinks.

TriggerHappy

Debtfreewannabe1 wrote: »

Hi,

In 2005 I entered DMP of over 40k inc all final fees etc I think my actual debt was around 32k. I currently have 17k left. Long story short Bankruptcy & IVA was not for me due to work and potential job loss. Paying at £300 a month (before their £50 fee) it works out I have around 5 years left to pay.

Actual figures are hazy I just buried my head in the sand and just got comfortable paying the £300 a month. My circumstances are changing and im getting married my future wife would like a child and a house. I have been offered cash (family loan) to pay this balance off and been asked to see if i can get full and final figures. Then in turn I pay back that family loan at the rate of £300 a month and hoping to do that in 2 years or less.

I have 3 creditors, Cabot (Egg) 2x Wescot (Lloyds credit card 7 loan)

What are the chances of me offering up to £7200 (£300 x 24) and getting a settlement between the 3. Any success stories? Anything I should watch out for? Should I Just leave the DMP running for another 5 years as none of the debts on my credit file?

Hiya,

Don't take this the wrong way but yours is a good example of what can happen if you don't take ownership of your DMP and retain a degree of control over your debts while using a company who charges you to look after your affairs.

Leave that company ASAP. Ideally do it yourself, if you're not confident then use a charity like Step change or Christians Against Poverty (CAP). Personally I recommend Step Change.

As you have been making payments for so long, and I'm guessing they're all defaulted long ago, then I would imagine that you'll be able to get a decent reduction. Personally I'd play hard ball a bit and offer 20% and ask them to make a counter offer - expect to settle at maybe 60% though, don't be afraid to make a counter offer...

Good luck