Full and Final Settlements on DMP?

DebtFreeWannabee95

Hello there guys, I hope that you are all well

With it being 2020, my New Year’s resolution is to become debt free. I have an idea of how I can achieve this, but I am a little concerned about its risks. I am hoping that you infinite wisdom may be able to help - I would be very grateful!

After leaving a long relationship, we have both accrued a substantial amount of debt. This was the result of being young and foolish whilst at university and setting out - not being extravagant, but just living and not asking for help when we should have. Anyway, since leaving I owed nearly £13,000, which is now down to around £11,500.

I have a debt management plan with StepChange, and I’m paying around £250 off each month. In a few years, this will eventually be cleared. The issue is, this is preventing me from saving to buy a house and living my life. I want to clear it.

It’s also worth noting I’ve just started a career with the police. For my vetting, a financial check was done. I passed as I have no CCJs, but having a DMP means that they’ll monitor my credit file to ensure I don’t get a CCJ.

I have read that it may be possible to put a full and final settlement offer forward to my creditors in the hope they accept a lower amount. I have 7 creditors, 5 have defaulted. I have never missed a payment with my DMP.

If I am successful in creating a !!!!!! with some, could any creditors push through for a CCJ if they know this is my intention? Or does it not work like that?

Also, if I do write for a !!!!!!, as they have defaulted, I understand I have a better chance than those that haven’t. What’s best to start with - 25% offer? I know this is very unlikely to be accepted and I’m expecting 80% or above.

It may not even be an option that I can afford these. I would plan on paying off the smaller debts first while on the DMP and save up to make the next offer, if I can. It’s all unknown but I want to do my best to clear these and move on.

StepChange advise your only offer !!!!!! to all creditors at once. Is this really needed?

Thank you for your advice - really appreciate it!

T

Willing2Learn

StepChange methodology on !!!!!! may end up costing you in your pocket. You are best off ending your relationship with StepChange and taking control of things yourself.

I recommend you submit CCA requests for all eligible accounts, to determine whether your creditors have compliant paperwork. If they cannot provide you with a 'true copy' of your agreement then the applicable account becomes unenforceable.

There will not be any risk of getting CCJs if you do everything in accordance with applicable legislation and guidance.

Debts - why, how & when to ask for the CCA agreement

Edit: And welcome to the forum

fatbelly

Our usual advice is to start by making formal requests for a copy of your credit agreement - where this is relevant. Credit cards, loans, catalogues are covered by the CCA. This won't work for overdrafts or mobile phone debts.

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

The aim of that is to give you extra leverage to make offers. As things stand, everyone is going to get paid off in 4 years so you have to make out a case that accepting your offer (and 25% is a good starting point) is worth doing.

You can make offers as you wish. If you get an acceptance just tell stepchange to remove that debt from the plan.

You'll be unlucky to get a court claim on any debt in a dmp. It's possible but unlikely because the end result should just be that the debt gets an instalment order the same as the dmp. If you do get a pre-action protocol letter from anyone, then get advice quickly on how to respond. I don't think it'll happen.

DebtFreeWannabee95

Thank you both for the very speedy response - very much appreciated!

Just so I understand, how does requesting the CCA give me leverage. Is this simply to see that all of the paperwork for the debts are lawful or at least following procedure? In the event that they cannot provide me this, what should I do?

My idea would be to start at the lowest debt (around £200), and then work up to snowball, whilst the DMP pays them off. Does this sound feasible?

Thank you again!

sourcrates

DebtFreeWannabee95 wrote: »

Thank you both for the very speedy response - very much appreciated!

Just so I understand, how does requesting the CCA give me leverage. Is this simply to see that all of the paperwork for the debts are lawful or at least following procedure? In the event that they cannot provide me this, what should I do?

My idea would be to start at the lowest debt (around £200), and then work up to snowball, whilst the DMP pays them off. Does this sound feasible?

Thank you again!

No compliant paperwork means they cannot use the courts to enforce their rights, so you can just walk away if you wish, there’s nothing the creditor can do, or you can make small offers to settle once and for all, which is why we recommend you do this the right way.

DebtFreeWannabee95

Well that sounds like a very good idea. Thank you for this, it’s all a bit of a maze but determined to get out of it!

I’ll be working on these and hopefully I’ll get somewhere!