DMP and Redundancy

Ginger182

Hi,

I've been trying to look on these boards but can't seem to see a clear answer.

I have a DMP and I'm in danger of being made redundant. My redundancy pay should be be more than enough to pay off my DMP however I was wondering do I need to declare this when making F&F offers?

This money needs to keep my family whilst I'm out of work so I don't want to spend more than I have to if possible. Appreciate morally I should pay in full but before I took my DMP out I was for years trying to pay my monthly minimum balances which were mostly interest so my conscience is a little bit lighter in this regard!

I'm also concerned that if I say I've got X amount, the debt companies will say actually you owe us Y interest and fees. Appreciate Payplan try to get these frozen but I read stories where this isn't the case and when people have tried to make their last payment they are told they actually owe a considerable amount more.

Any advice would be great.
Thanks

fatbelly

OK, 'morally' doesn't come int it. You will be making a commercial proposition to them.

They can continue to receive your monthly payment of £X for Y years. Or they can accept a one-off lump sum of £Z in full & final settlement.

They don't need to know where it's coming from (third party?) or how much you have.

I'd start by doing a cca request

https://www.nationaldebtline.org/EW/sampleletters/Pages/Information-about-your-agreement-under-the-Consumer-Credit-Act-%28sole-name%29.aspx

and then if they can provide the agreement, make an offer

https://www.nationaldebtline.org/EW/sampleletters/Pages/Full-and-final-settlement-offers-%28sole-name%29.aspx

sourcrates

Great advice above as usual.

Ginger182

Thanks for your reply it is very helpful. Quick question when making F&F offers, would I go via Payplan or go direct myself to my creditors (Wescot etc)

If I agree a F&F with one of them directly I assume I just tell Payplan and they will remove that debt from their system?

SusieT

Just a word of caution and I do not know your full circumstances but, before you do a f&f it may be better to wait and see how long it will take you to get another job as unless things have changed you will not get jobseekers straight away, and it will be delayed until the redundancy period is done, so if you get 3 months redundancy pay there will be no jobseekers for 3 months and there may or may not be a delay after that It may be worth holding fire on the offers until you know when you will get another job just in case of problems and delays so that the money is there for food and bills, Stepchange can probably reduce the amount on the DMP until you have found work again if you talk to them.

NowInspired

I agree with all of the above and have indeed also been through a similar situation. You do not need to declare any of the redundancy to Step Change or any of the companies involved. You must make yourself and your family priority above all else and make sure that you have enough money for what you yourselves need.

You have no reason at all to feel obliged to pay anything extra to these companies unless you feel you actually want to. Just keep in mind, as you have already mentioned, the interest they have charged you. Remember it is your life and your money. They will get theirs in time but until then keep them in their place, they are not top priority and you should never let yourself feel obliged to be answerable to them because that takes the power away from you and that should never happen.

DawnW

Absolutely agree re caution on using the redundancy money to repay debts. Wait till your benefits have been sorted / or you are settled in a new job. Don't assume that the system will look after you, as there are too many situations now where it does not Prioritise your rent or mortgage, council tax, utilities and food. Debts can wait!

fatbelly

Ginger182 wrote: »

If I agree a F&F with one of them directly I assume I just tell Payplan and they will remove that debt from their system?

That's the way to go.

Specific thread here but don't try to read all of it cos it's been going 15 years.

https://forums.moneysavingexpert.com/discussion/115430/full-and-final-settlement-help-thread

Suseka97

Great advice from many - but I'd just like to add my voice to the 'pause button' suggestions.

You are not obliged (morally or otherwise) to pay off these debts using any of your redundancy payment. If you manage to find alternative work quickly, then I would follow the advice of fatbelly and sourcrates regarding what to do to negotiate on F&Fs if that's what you decide to do. But, until then, I'd put the money away and I'd also put a halt to the DMP arrangement until you are back in gainful employment. You have no idea what the future holds and your priority is to keep a roof over your head and food on the table, plus pay those priority bills (Ctax, Utilities etc..).

sourcrates

No matter who manages your DMP, when it comes to settlement offers, they will all expect you to pay them the balance of the funds you have available upfront, so they hold your cash, and then negoatiate with your creditors, on your behalf, not a situation i would be happy with to be honest.

Much better you do this yourself, then you keep your money, you retain control, and make sure you get the best deal.

But, as said above, i would hold off doing this for the time being, don`t waste your money increasing the profits of some debt collector, look after number one first.

MovingForwards

One quick question:

Do you rent or own (with / without a mortgage) a property?