DMP early repayment help!

Fluffysquirrels

Hello, 

I have a DMP with Stepchange and have had it for 4 years now. I have recently sold my property and will be getting some equity from the sale and moving in with family so want to pay my debt off. Essentially this is a fresh start for me following a really rough few years and I want rid of the debt so I can say goodbye to the past and start my new life. I am after some advice on how much to offer as a final settlement and how it will affect me moving forward. 

I started my DMP with a debt of £34,000. I currently owe £18,000. I will have enough equity to pay this in full though obviously this will affect my future as I will need some money to set myself up and for rent etc. I don't want to take the mick but also want to save some money if possible. How much would you offer? 

I was also wondering how this will affect my credit score. Would it look better if I pay it off in full rather than offer less or does it not really make much difference? 

Thank you in advance for your help  
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Grumpelstiltskin

OK First thing to do is cancel your DMP with Stepchange and self manage.

Have the debts defaulted or are they being marked with Arrangement to Pay?

This is important as defaulted debts will disappear 6  years from the default date whether they have been repaid or not but Arrangement to Pay markers disappear 6 years after the final payment has been made so there can be a big time difference.

Are  the debts still with the original owners or have they been sold on?

The answers to these questions will help us give you the advice as to whether you can settle for less than the amount owed.

sourcrates

By all means take the mick, they originally lent you money they didn`t have, and most likely after 4 years your debts will all have been sold on to 3rd parties, I assume, who will have bought those accounts for around 12p in the £.

I would say that was taking the mick!!

Start obscenely low, you can always increase your offers.

Fluffysquirrels

Thank you. Yeah they are all defaulted now and all bar 2 have been sold on. 

Some of the defaults were registered in 2021 but sadly some only defaulted in 2023. I thought the 6 years would be up after 2021, so in 2027. But it will be 6 years after 2023 won't it. 

sourcrates

They will be removed 6 years after date of default, but your liability still remains as you have been paying them.

Fluffysquirrels

sourcrates said:

They will be removed 6 years after date of default, but your liability still remains as you have been paying them.

Apologies, I am not very good at this sort of thing. What does this mean? Do you mean it will come off my file but I have to keep paying? That's fine because I'll have paid it one way or another in the next month or two. 

Grumpelstiltskin

OK So cancel your DMP, you can't do anything towards paying until you actually have the money in your bank.

It is possible but maybe unlikely that the CCAs can't be produced, but wait and see what you hear from whichever company is dealing with the debts now, don't pay them anything in the meantime.

Fluffysquirrels

Fluffysquirrels said:

Thank you. Yeah they are all defaulted now and all bar 2 have been sold on. 

Some of the defaults were registered in 2021 but sadly some only defaulted in 2023. I thought the 6 years would be up after 2021, so in 2027. But it will be 6 years after 2023 won't it. 

I should add, I currently have 8 debts, 6 sold on, 2 not. I did have 10 but 2 were snapped so have already been completed. 

sourcrates

Fluffysquirrels said:

Fluffysquirrels said:

Thank you. Yeah they are all defaulted now and all bar 2 have been sold on. 

Some of the defaults were registered in 2021 but sadly some only defaulted in 2023. I thought the 6 years would be up after 2021, so in 2027. But it will be 6 years after 2023 won't it. 

I should add, I currently have 8 debts, 6 sold on, 2 not. I did have 10 but 2 were snapped so have already been completed. 

Snapped??? what does that mean?

As for your credit file, I was assuming you were asking about liability once accounts drop off your file, if you have been paying them, they won`t become statute bared, only 6 years without any payment can achieve that.

Fluffysquirrels

Grumpelstiltskin said:

OK So cancel your DMP, you can't do anything towards paying until you actually have the money in your bank.

It is possible but maybe unlikely that the CCAs can't be produced, but wait and see what you hear from whichever company is dealing with the debts now, don't pay them anything in the meantime.

Excuse my naivety but why should I cancel the DMP? Is it not easier to arrange a settlement through them? They have been brilliant so far. 

Grumpelstiltskin

Stepchange will want you to pay as much as possible, handling it your self ( you will get as much help as possible on here ) means you can probably get away with paying less, more money in your pocket the better.