Paying off debts

Sunaandmartin

Hi Everyone
I’m new to the Forum, and would like some advise on clearing some debts I have, but I’m unsure the best way to do it? My background is, in 2016 I got into financial trouble due to cost of living, kids and trying to keep up with the Jones!! In the end I accursed credit cards and loans of about £25,000. In desperation, my bother told me about Stepchange charity. They have really helped me and put me on a DMP ( Debt management plan) for 6 years. I am getting back on track but have no credit rating, but I don’t pay any interest on my debts.
My question is, I have just found out I have an old pension that was contracted out in 1991 until this August 2019 and has a fund of 41,600. As I am over 55 I can now draw some or all of this money minus the tax. This has been a great surprise, but I really want to use the money wisely. Do I take 10, 600 tax free and do my house up which needs to be modernised to add value.?Take the lot, and pay the remaining debt of 16, 000? And use the rest on improvements? Take 10,600
and leave the rest so that it can still be invested when I retire?? Any help or advise would be much appreciated. Best regards Martin:j

SusieT

It may be worth posting this in the debt free wannabe help part of the forum, as this is more for diaries from people who have decided their path, and are working to get debt free.
If you do decide to use some money to pay off the debt, it is worth making them a full and final offer (not through stepchange) to reduce the amount that you have to pay.

pof2019

In my opinion, get debt free, imagine how amazing that will feel. I can only imagine at the moment.

Sunaandmartin

Hi guys, thanks for your advice. I agree being debt free would be fantastic. I will speak to the companies I owe and try and make a settlement with them. Fingers crossed I can do a deal with them? Thank again
Martin