Partial Vs full settlement on a dmp

scotty9107tom

Hi there, me and my partner are looking to get a mortgage next year, I need some advice though, I'm 3 years into a dmp with £10000 remaining, I've just received £5000 through a share save scheme, I could potentially pay off my DMP by the end of this year, my question is should I offer a partial settlement to my lenders and get it paid off sooner and save more for a deposit, or shall I pay the full amount by the end of the year? I'm not sure if a partial settlement effects my chances of getting a mortgage more than a full settlement? Or whether it doesn't make much difference as the 4 creditors have defaulted my debts anyway? 

Thanks in advance 

sourcrates

With defaults recorded on your credit file, they are what does the damage.

Not a lot of difference between settled, and partially settled, credit file wise, but bank account wise, quite a lot I would imagine.

With defaults on your file, you won`t be able to obtain a mainstream mortgage, but a sub prime broker should be able to help.

Best advice is try and settle for as little as you possibly can.

scotty9107tom

sourcrates said:

With defaults recorded on your credit file, they are what does the damage.

Not a lot of difference between settled, and partially settled, credit file wise, but bank account wise, quite a lot I would imagine.

With defaults on your file, you won`t be able to obtain a mainstream mortgage, but a sub prime broker should be able to help.

Best advice is try and settle for as little as you possibly can.

Thankyou for your reply! Yeah That makes sense, I shall get the ball rolling with a partial settlement I think, I spoke to a mortgage advisor today who reiterated everything you said basically, thanks 😌

fatbelly

Full and final settlement is not a quick process so getting things resolved by the end of the year is a realistic timescale.

Make offers now in writing using the national debtline template (there are others available but I like theirs), starting low, so maybe 30%. Might be easier saying the lump sum comes from a third party.

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

If they make a counter-offer you can phone to negotiate. Get the final deal confirmed in writing

Keep the 5k in a pot unconnected to any of the debts, and add your monthly dmp payment to it, and anything else you can afford, to it. It becomes a fighting fund/ mortgage deposit. You'll probably clear this lot for somewhere between 5 and 10k but anything you can save against the 10k will help.