Paying off DPP with Stepchange

whydIdothis2myself

Hello folks, I am looking for some guidance and advice if anyone has been in a similar situation?

My ex and I are selling the house so I will be in a position to pay off my DPP. I have just under £30K which will be most, if not all the monies from the sale.

How shall I end this? I've see on some forums/reddit posts, to pay as little as possible i can ask the creditors for a settlement amount to pay off early? Is this right? Can Stepchange do this for me or do I do this?

Also once I have paid these debts off, what is likely to happen to my credit score? Will it increase enough i can get a private let?

I know the default will be on my file for the next 4-5years, so how will that look in terms of numbers? Or time to allow it to increase into the "good" bracket?

Any help/advice/similar stories would really help.

TIA

ManyWays

I have just under £30K which will be most, if not all the monies from the sale.
You will need a chunk of that for a deposit plus first months rent and moving costs.
Are all your debts in the DPP or do you have any others such as car finance outside?

How long ago did the DPP start and are all the debts in it showing as defaulted on your credit record? It is best to check, not assume you know what the report will show.

In general, settling defaults does not improve the credit score that you can see.
Is there anyone in your family that could act a a guarantor for a tenancy?

fatbelly

If the debts were defaulted 1-2 years ago then they should be open to some sort of settlement deal.

Do it yourself and don't ask Stepchange. Tell the creditors what you are offering, maybe start at 25%,* and use this letter

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

*that's 25% of the debt, not 25% off

You may want to do cca requests on relevant debts first

whydIdothis2myself

https://forums.moneysavingexpert.com/discussion/comment/81871534#Comment_81871534

Hi,

Yes I have factored in a couple months of expenses and should be ok.

I was just wondering as I read you can negotiate the amount owed.

All debts are on the DPP and it started a year ago. I have no other lines of credit or debt (other than the mortgage which im wanting out of to leave the house).

YYes The default is on my file and has been since I entered the DPP.

Yes I can get a guarantor, its just a question as to improve the credit score would make me more of a preferred candidate

Thanks so much for your response 👍

whydIdothis2myself

Yeah they were opened a year ago. A couple of them have already been taken on by debt recovery companies. Will this make a difference?

What is the reason for not telling StepChange? Will they just ask for the full amounts?

Really Start asking at 25%? And if they reject just increase the % until they agree?

Thank you so much, and I will check out the cca

whydIdothis2myself

https://forums.moneysavingexpert.com/discussion/comment/81871580#Comment_81871580

fatbelly

You make a low offer. They counter with a higher one

Then you negotiate

Stepchange won't do that

whydIdothis2myself

https://forums.moneysavingexpert.com/discussion/comment/81872033#Comment_81872033

Is it not a breach of conditions to go directly to the creditors at this stage? I thought all comes had to go through stepchange.

I will definitely do this though it will only make things easier for me

thanks again👍

fatbelly

They are your debts. You are in charge.

whydIdothis2myself

https://forums.moneysavingexpert.com/discussion/comment/81872090#Comment_81872090

True, thanks again for your help 😊