StepChange Settlement Offers to Creditors

martb87

Hi,

My wife and I have received some inheritance of roughly £8000. We have debts of around £12000, and have a DMP in place, which will end in 7+ years. We are looking to use this money to settle or partially-settle our debts. Are StepChange capable/allowed to negotiate with our creditors?

We will be enquiring with StepChange tomorrow, but were wondering if anyone has heard of them doing this or would we have to contact each creditor individually.

Thank you

peteuk

I’m not 100% sure but I don’t think they would be able to help.

Part of the DMP is that you treat all debts equally.  I would work out the % of payment each are receiving and then work out the £8000 as per %.

If the debt is low then you can start low but you can approach each debt with the equal % as per the DMP payment. 

DebtHurricane

You’re best to approach the creditors individually with settlement offers; SC will likely want you to just equally pay each debt which will still leave balances. 

Approaching them directly will hopefully see them take lower settlements meaning you should be able to clear the entire debt with that money. 

Just my opinion but in my experience you’re better off going direct to the creditors. Once settled, contact SC and tell them the debt was settled so please remove it from the DMP- or if you manage to clear everything with the funds, tell them to close the plan entirely. 

Good luck. 

SusieT

Echo the others in saying that it is better to go directly to the creditors. That way you can staer with a lower % offer and probably be able to keep part of the sum as a good emercency fund in case you were to lose your job or something big happened. 
There is a thread HERE that (if you go to the latest posts) will give you an idea about what sort of settlement % is possible with various creditors. A lot of people will start with an offer around 25% - 30% and many are able to settle at around 50% so it is worth reading and looking at older posts on here to figure out what to do, how much to say is available for payment etc. as it will depend on how old the debt is, how much you are paying through Stepchange, how long it would otherwise take to repay the debt, if it is still with the original creditor or if it has been sold on and the current owner has paid something like 10p in the pound for it.

DjangoUnchained

i found stepchange useless and unhelpful when i suggested this. I did it myself and saved thousands.

sourcrates

Like most thigs in life, there is a right way and a wrong way of doing things.

Stepchange could be of help here, but it would be more of a "what would you accept" kind of thing, rather than an outright negotiation, as there approach is to treat all creditors fairly, and that won`t always work in your favour.

If you want to clear all your debts with the 8k, then that is entirely possible, and this is absolutely something you should do yourself, but its is not a quick fix, there is a process to follow if you want to obtain the most favourable outcome.

Your first job is to CCA all relevant accounts and await the outcome of that, once you know what is and isn`t enforceable, you can start sending letters, start low, and you must also remember to include a good reason why they should accept your offer, rather than keep on accepting monthly repayments, this is the point you need to get creative.

They will be much more likely to accept the offer if, say for example, the alternative is you going bankrupt, or potentially losing your job, maybe you or a member of your family has fallen ill, and you need to take time off to look after them, it could be anything, as I said, be creative.

You must also be persistent, this can take a long time, average turnaround of a letter to a debt collector is about a month, and most important of all, any deal that is agreed, make 100% sure that you get the creditors assurance, in writing, that what you pay will settle your account with them, and neither they, nor their agents will take any action whatsoever to recover the remainder of the debt.

Kakiste

I approached my creditors myself whilst paying off a DMP- After roughly 3-4 weeks of negotiating back and forth HSBC accepted 60% of a roughly £7K debt. Once I'd got the confirmation letter from HSBC I just paid them, then rang stepchange and told them that they were no longer a creditor. No issue at all. 

fatbelly

Excellent advice above. With a bit of persistence and luck you might get the job done and still have a couple of thousand over.

Start by CCA-ing all the relevant debts.

https://debtcamel.co.uk/ask-cca-agreement-for-debt/