DMP and inheritance

R.j.Belcher

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?
thanks
Rob

MalMonroe

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.

https://www.stepchange.org/clients/changes-to-dmp-payments.aspx

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".

MovingForwards

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

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. 

https://nationaldebtline.org/sample-letters/full-and-final-settlement-offer/

Why not start by offering 25p in the £ and see who bites?

Makingabobor2

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%.

Rob5342

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

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.

R.j.Belcher

Thanks for the comments, will make some offers and see what happens.

thanks
Rob

Rob5342

Have you checked if they are enforcable? It might be worth doing that before making offers.

LexieLou

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