How best to allocate a lump sum to my debts

Fred291

Hi
I have a a number of debts and a lump sum of £1000 that I wish to allocate to them (this year I am aiming to put a real dent in these debts that have been hanging over me for so long). I need some advise as to the options I am considering as I'm not sure hows best to use this money.

1. I have a large debt that has a standing order placed on my house. I could put the £1000 towards this but it would only be a small fraction. Obviously though, the standing order is a constant worry for me.
2. I have a couple of smaller debts that I could pay off and therefore reduce my debtors and use their monthly payments to top up the payments being made to the debt with the standing order.
3. I have another debt that is more than the £1000 that I have, but I have thought about trying for a reduced settlement figure, which I have been offered on several occassions. But I'm unsure if this will have a negative impact (if things can be any more negative). This might allow me to pay a smaller debt also.

Would the debtor of the standing order debt escalate things if they thought I was paying other debts over them?

Obviously things are pretty bad but I want to take control of my finances.
Thanks for your help!

lindens

I would do number 2. it has the psychological advantage of paying off some debts and freeing up some more money to throw at something else.

Also I think you mean a charging order not a standing order?

Jambobabi

Option 2 would be great for the confidence!

When going to a self managed DMP I did a similar thing and paid off my smallest debt (£800) and then paid £400 towards the next smallest debt (£1700).

The £45 I have saved in monthly payments now goes on to the next debt, adding an extra £540 per year to get it cleared :j

Fred291

Yes! Charging order! Thanks

SusieT

If the interest rates are around the same then I would clear at least 1 small debt, but if one is significantly more than the others I would put it to that one as long term it will save you a lot of money in interest

Unicorn_cottage

How much is the charging order debt? Have you sought professional advice on this as it sounds like there are quite a few factors involved.