Full vs Partial Payment of Debts

AlinDebt

Hi,

I'm on a debt management plans with debts currently around £23,000.

However, I have come into a significant amount of money which means I can pay it off.

Should I just pay it off in full or can I still negotiate with my creditors to get a reduced payment.

If I do the latter, will this affect my credit rating if I want to apply for a mortgage etc in the future?

It would be nice to pay less than the full whack of my debts but don't want it to affect me in the future?

Thanks!

MovingForwards

How old are your debts?
If still on your credit history how long until the 6 years are up and they drop off?
How many years time do you want to be applying for a mortgage?

Once the above is considered....

If debts are not showing on your credit history then F&F them without hesitation.

If debts are dropping off in a couple of years, f&f them.

If debts are going to show for another 4 or 5 years and you want a mortgage in a year, consider full settlement as that will look better to a future mortgage company.

That's the stance I have taken.

Willing2Learn

Hi AlinDebt and welcome to the forum

An account that has either been defaulted or marked with an AP marker can be considered toxic data. The account would likely still be toxic even after it is either partially cleared or fully satisfied. That is because a defaulted or AP marked account signifies that the original credit agreement has been broken. Having said that, a lender might prefer to see the accounts fully settled...

Edit: And just to add to MovingForwards reply. If the accounts are old, then if it were me, I would submit a CCA request for each applicable account, to determine whether your creditors have compliant paperwork.