Advice on settlement

susieanne

I am currently on a DMP with step . I currently have £9000 debt over 5 creditors. I have been on the DMP for around 4 years and probably another 15 years before its payed off . I’ve decided to get a personal loan to pay off my DMP however the max I could borrow ( as I considered the monthly payments) over 5 years is £5000 .
Now I know additional credit is not allowed on a DMP so they won’t be happy if I tell Step Change that is money is from a loan .
my questions how likely are my creditors to accept part settlement of £5000 on a £9000 debt (ideally I would like it to be less than £5000) How much should I offer my creditors?
Also as Step Change may not allow this me getting a loan . Would I be better to end my plan with Step Change and negotiate settlement figures myself with my creditors?
Although I am not even sure who my creditors are now as they have been sold several times over the years to different companies .
I feel a lot happier thinking I will be debt free after 5 years rather than paying into a DMP for forever more

Any advice welcome

Grumpelstiltskin

OK Forget a loan, probably difficult to get one at anything like a reasonable amount because of what your credit report will say.

You probably be better to self manage then you can do different things.

Altior

You have an interest free loan, depreciating by inflation annually, that is costing you £10 a week to service.

It's a no lose scenario, since the damage was done four years ago. Don't take out a loan.

Do you have any capital, or possibility to put some together?

susieanne

Thankyou for your reply’s . I could probably start saving more to throw at the debt but very unlikely to save £9000 or anything anywhere near that amount . Possibly £3000 -£4000 over the next 12 months .
I do feel that I want to start managing my debts myself rather than Step Change so I am more in control.
I am unsure if this is a good idea though . I think Step Change has worked out I will be debt free in approximately 2039 . That is way past my retirement age so I am eager to try to get this debt payed or maybe partially paid via settlements

Altior

Clearing it early is a possibility, but don't use a loan.

You must be paying your creditors relatively tiny amounts, and they will probably be open to settlement.

As I alluded to, you have a no lose scenario, as your current terms are very good anyway. So probably self manage, initially making exactly the same manual payments as SC are doing for you now. Then try to put together a war chest to obtain settlement offers, possibly starting with the creditor receiving the lowest payment, and low ball offers. The way I see it, you have all the cards here and they will be quite open to getting you off their books.

fatbelly

IF it's going to take 15 years (180 months) to pay off 9k that infers you have only £50 per month to service this. Forget the loan.

Is there a reason you can't do a DRO?

Have you done cca requests on relevant debts?

Have you tried affordability complains?

sourcrates

Please do not entertain getting another loan, totally the wrong move.

Your debts were sold for a mere fraction of their face value, that 9k probably would have been sold on for a few hundred quid split between the 5 buyers, please don`t fall at the first hurdle, all you`ll be doing is making them profit from your misery.

Fatbelly makes two good suggestions for reducing what`s owed, you could also write and ask them to agree to make a commercial decision and write off the balances due to the length of time it will take to repay the debts, try anything but borrowing more money.