Is a debt settlement worth it for the partial settlement notice on a default?

Willrdouglas1809

I've been in my DMP for 3 1/2 years now, started with 22k, 16k has been paid off in that time. So in addition to this and a separate account I ended up defaulting on afterwards, I have about 7.5k to pay down. I finally decided to tell my parents about this and have offered to help using money they had saved for a house deposit as if I want to move out my partner could facilitate the deposit and I can make up for it in future, furniture/renovations etc.

With the majority being £6k, I'm debating whether to get settlement figures to reduce how much I need to payout given most are now with 3rd party credit buying companies, but I don't know if the little mark on the default saying "partially settled" will be worth it over just the default settled in full.

Does anyone have any experience of going the partial settlement way and how it effected them till after the 6 year point?

ManyWays

A partial settlement marker does not affect the credit score you see.
There are no hard and fast rules about how a future lender has to see a partial settlement marker. But with DMP defaults on your credit record, it is realistic to assume that most future lenders will just be pleased your problem debts have been settled. Clearing the debts with a partial settlement has a positive effect on future affordability calculations.

Willrdouglas1809

https://forums.moneysavingexpert.com/discussion/comment/82101575#Comment_82101575

So if the savings significant enough, it's probably worth looking into? My worry was them being picky over it but the cost saving plus the interest I could make on saving money again seemed to outweigh it

ManyWays

Almost any savings is worth taking I think.
Say the money is coming from a relative if it will let you clear the debt

Willrdouglas1809

https://forums.moneysavingexpert.com/discussion/comment/82101825#Comment_82101825

I think it will end up coming from the money they had set aside for a first house deposit, but seems redundant if I cannot use it in time or end up waiting 3 years when I could likely save the difference in half the time.

I contacted Payplan, so hopefully I can get some decent settlement figures!

Rob5342

If you want a decent settlement figure you'll need to contact the debt owners yourself and negotiate something. Payplan will probably want you to split the whole amount you've got proportionally between them all.

RAS

Stepchange would also want to share the "windfall" equally between creditors.

You'd be much better off staying stumm, waiting for an offer from the creditor and offering a little over half they want. Then negotiate.

Settled, partially settled, never paid a penny, don't matter that much. All three will drop off your credit record 6 years after the default was issued.

There may be occasions when providers would consider one or 2 settled defaults on an otherwise spotless credit record.

You'd be better asking on the mortgage forum here as there are some knowledgeable advisors who respond there.

But don't raise your hopes too much.

Willrdouglas1809

https://forums.moneysavingexpert.com/discussion/comment/82102305#Comment_82102305

Whilst the mortgage part is a goal it's not necessarily the end goal for paying the debt downing sooner. So I think if saving £1-2k at this point was possible, then it would still benefit me at some point even if it just means for my first home my partner move into something smaller with less need for my name to be on the mortgage application.

I will speak with payplan about the message I sent and if they are saying they'd want to equally spread it, I would look at just making contact with the creditors myself as we want this resolved sooner rather then later

RAS

A good strategy. Come back if you need specific advice.