DMP check list and sanity check

Quantumllama

Thank you everyone. I do feel a bit reassured. 

Is £50 a month a reasonable offer once we’re at the repayment stage? I feel like if I owed someone £8000 and they offered me £50 a month I would say no! I have spent the last couple of nights building a budget spreadsheet, looking at my income and outgoings and putting money aside for daily essentials etc and with no debt I would have just under £391 disposable. Split evenly amongst my 7 total creditors that’s around £55 each. Would that be accepted do you think? A loan of mine is currently at around £16k and paying that off at 50 a month would take 26 years!

tigergambit

To my mind you are approaching this from the wrong angle. Perfectly normal for someone new to the game. 

You need to get into the mindset that this is just that, a game.

Your goal is to pay as little as possible and save as much as possible until F&F time. Their goal is to get as much money from you as possible without having to spend money taking you to court.

But the deck is stacked in your favour. Firstly they each have many thousands of debtors to deal with whereas you just deal with them one at a time. Secondly you have control of the information flow. You don't *have* to tell them anything and what you do tell them about your circumstances should only ever be to reinforce the story you are telling them. Thirdly you can pick them off one by one however you like, but their behaviour is strictly regulated and hence predictable.

So whilst you are waiting on defaults you should work on your SOA refining it to show as little surplus as possible so that you can build that settlement fund. This is for your use but you can share with creditors if you really really need to turn the screws. I think you should be aiming to put £300+ into your settlement fund each month, so you will have £91 to pay creditors. You should divide this proportionally between them so that you can show how fair you are being when they ask you. Strangely enough creditors seem to be more bothered about this aspect than they are about wringing as much cash out of you as they can. 

In two years you will have saved £7,200 or more into your settlement fund and can use the fact that your mortgage cost is increasing to make low settlement offers. They can accept or you can reduce the amount you are paying them. If the latter then you can offer them a lower F&F a year later.

In response to your last question you should bear in mind that once sold on your new creditors will only have paid pennies in the pound for your debt. They are looking at a payment of £50 on a debt of £1,600. Except that they're not looking - they have thousands of customers, they concentrate on the ones paying nothing. I still have three creditors to whom I owe £10k, £5k and £3k. I'm paying the first two £1 a month currently (they declined F&Fs) and the third one gets nothing as they have somehow mislaid my account and didn't respond to my F&F. 

fatbelly

You offer a pro-rata share of what you can afford.

So £120 per month available to debts

A £1000
B £2000 
C £3000
Total debt £6000

A gets 1/6 x 120 = 20
B gets 2/6 x 120 = 40
C gets 3/6 x 120 = 60

Quantumllama

tigergambit said:

To my mind you are approaching this from the wrong angle. Perfectly normal for someone new to the game. 

You need to get into the mindset that this is just that, a game.

Your goal is to pay as little as possible and save as much as possible until F&F time. Their goal is to get as much money from you as possible without having to spend money taking you to court.

But the deck is stacked in your favour. Firstly they each have many thousands of debtors to deal with whereas you just deal with them one at a time. Secondly you have control of the information flow. You don't *have* to tell them anything and what you do tell them about your circumstances should only ever be to reinforce the story you are telling them. Thirdly you can pick them off one by one however you like, but their behaviour is strictly regulated and hence predictable.

So whilst you are waiting on defaults you should work on your SOA refining it to show as little surplus as possible so that you can build that settlement fund. This is for your use but you can share with creditors if you really really need to turn the screws. I think you should be aiming to put £300+ into your settlement fund each month, so you will have £91 to pay creditors. You should divide this proportionally between them so that you can show how fair you are being when they ask you. Strangely enough creditors seem to be more bothered about this aspect than they are about wringing as much cash out of you as they can. 

In two years you will have saved £7,200 or more into your settlement fund and can use the fact that your mortgage cost is increasing to make low settlement offers. They can accept or you can reduce the amount you are paying them. If the latter then you can offer them a lower F&F a year later.

In response to your last question you should bear in mind that once sold on your new creditors will only have paid pennies in the pound for your debt. They are looking at a payment of £50 on a debt of £1,600. Except that they're not looking - they have thousands of customers, they concentrate on the ones paying nothing. I still have three creditors to whom I owe £10k, £5k and £3k. I'm paying the first two £1 a month currently (they declined F&Fs) and the third one gets nothing as they have somehow mislaid my account and didn't respond to my F&F. 

I understand what you're saying. Thank you for letting me see this in a new light.

Rob5342

Quantumllama said:
Is £50 a month a reasonable offer once we’re at the repayment stage? I feel like if I owed someone £8000 and they offered me £50 a month I would say no!

Debts often get sold on at something like 10% of their value. If you had paid £800 for a debt and someone wanted to pay you £50 a month you would be laughing your head off that you would get your money back in just over s year and then have money for nothing rolling in month after month. 

You need to stop t thinking about what's acceptable though, you just pay whatever it is that you can afford as there simply isn't any money to pay any more. 

Quantumllama

Rob5342 said:

Quantumllama said:
Is £50 a month a reasonable offer once we’re at the repayment stage? I feel like if I owed someone £8000 and they offered me £50 a month I would say no!

Debts often get sold on at something like 10% of their value. If you had paid £800 for a debt and someone wanted to pay you £50 a month you would be laughing your head off that you would get your money back in just over s year and then have money for nothing rolling in month after month. 

You need to stop t thinking about what's acceptable though, you just pay whatever it is that you can afford as there simply isn't any money to pay any more. 

I appreciate it’s very early in the game for me to be thinking about this but just out of curiosity. If that’s the case then what is a reasonable F&F settlement offer? Obviously each company is going to be different but say 10% of the original value plus 10% for them to be happy? There’s obviously not a guide to that as it is ultimately a negotiation but what would be a ball park figure do you think?

Just to clarify what I mean is say for arguments sakes the original debt was £10k and it was sold for £1k. Would a reasonable settlement offer be say what they paid plus 10%, so 1.1k?

tigergambit

You need to be thinking of around 20% of the initial amount unless you have a very strong argument or are in very dire circumstances, but you're looking at least two years ahead. Before then you need to be thinking of constructing your SOA to build your settlement fund. This is a long game.

Rob5342

Although they don't pay much for the debts they often try and squeeze whst they can out of them. I've heard 25% mentioned as a starting offer, if they dont accept that then leave it and try again in 6 months or so. A lot will depend in the circumstances, you'll probably have more luck with an old debt that's been hanging around for ages than with a new debt they have just bought.