DMP and inheritance

Hi my mum passed away a few weeks ago and I have been left with about £12k for myself. I currently owe £31k managed through step change. I feel I should pay off a small amount of my debts with this money but most will go on new bathroom, garden fence and a holiday. My smallest debts are £200 with PRA and a credit card with £1200 and these seem the easiest debts to settle? Should I just get rid of these two or should I try and pay off smaller amounts on each debt?


  • MalMonroe
    MalMonroe Forumite Posts: 5,783
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    Hi, I'm sorry for your loss.

    Since you are paying your DMP through StepChange, it would make sense for you to contact them about your inheritance.

    Within that link it says, "we must review your DMP via telephone or our OnlineDMP service at least once a year, or when you’ve told us you’re expecting a change in your situation. We do this to make sure it’s still the best option for you and we’ll work out a DMP payment that’s affordable for you".
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  • MovingForwards
    MovingForwards Forumite Posts: 16,552
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    I'd personally try a few full and final settlement offers to the creditors, see if you can stretch what you're willing to pay further.

    If you get step change involved they'll want to split the money fairly between everyone.
  • fatbelly
    fatbelly Forumite Posts: 19,188
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    I'm with movingforwards on this.

    It's an informal solution so you are perfectly entitled to take charge of your own debts and see how much you can clear. They won't all accept a small sum as settlement but some will. These are called Full & Final settlement but marked on your credit file as partial settlement.

    There is a template letter here.

    Why not start by offering 25p in the £ and see who bites?
  • Makingabobor2
    Makingabobor2 Forumite Posts: 2,059
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    I also agree about the F&F settlements. We left SC after a couple of years of our DMP and have already managed to get a few good deals to pay some debts off and keep getting letters offering us more, which we hope to be able to accept one day. Most of ours are offering a discount of 70%.
    Making the debt go down and the savings go up, one day at a time.

    LBM 2015 - debt £57K / Sept '23 now £34,344

    Mortgage at 1st September 2023  £24,000 (Officially finishes June 2026, but plan to get MF well before this space)
    Total Mortgage Overpayments in 2022 was £240. 
    Total Overpayments so far in 2023 is £224

    EF #68 £145/£1000
    Christmas 2023 #3  £5/£365 (as I am saving for Christmas & birthdays, total will fluctuate through the year)
    Penny a day 2023 #12 £212.01/£667.95
    Make £5 a day -  Sept £120.89/£150

    NSDs for September 11/15

    My debt free diary...

  • Rob5342
    Rob5342 Forumite Posts: 893
    500 Posts First Anniversary Name Dropper
    I agree too. Stepchange will want you to just split it equally, they are funded by the lenders so theu work to get the full amount repaid. If you approach them yourselves then you may find some.that are willing to accept a reduced amount, and the ones that won't will be more likely to add time goes on
  • sourcrates
    sourcrates Forumite, Ambassador Posts: 27,657
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 18 December 2022 at 6:30PM
    Don`t tell Stepchange anything regarding the inheritance, if they get a sniff of that money, they will be wanting you to put the lot towards clearing your debts.

    If you want to pay off the smaller debts, then do so, or you can make offers on any of your accounts.

    Once completed just instruct stepchange to remove the settled creditors from your arrangement, don`t go into any detail, if they ask, say it was a gift from family, and leave it at that.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- The "provit letter" is here-
  • R.j.Belcher
    R.j.Belcher Forumite Posts: 33
    Fifth Anniversary 10 Posts
    Thanks for the comments, will make some offers and see what happens.

  • Rob5342
    Rob5342 Forumite Posts: 893
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    Have you checked if they are enforcable? It might be worth doing that before making offers.
  • LexieLou
    LexieLou Forumite Posts: 707
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    I had the same predicament.  I contacted the lenders directly and offered F&F.  They ask where you got the money from, I just said it was a family relative helping me out.  Some were idiots - those I kept on the DMP and then went to Step Change and told them who I had paid off etc.  SC were lovely.  

    Enjoy what your mum left you, enjoy how you spend it and enjoy the new year.  Best wishes for 2023 my friend

    LL xx
    I've only an ickle bit of debt left
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