DMP - Full and Final settlement offers. DIY or via my DMP?

JamesC3 · 12 May 2020 at 6:14PM

HI,

As I mentioned in a previous post on mortgages, I am currently on a DMP. Around £14k still outstanding. I am due to get a lump sum from work (around £8.5k) at the end of June/July.

I emailed StepChange and asked if they would be able to negotiate with my Creditors to see if any of them (there are around 10) would take a discounted full and final settlement figure. They informed me they could put me through to another one of their departments when I had the money and I’d have to do a re-worked Budget, which is fine.

I just wondered if anyone else has been in this situation and how you dealt with it. Did you let your DMP deal with it? Or did you go to your Creditors direct and see if they would accept an offer?

Kind regards,

James

fatbelly · 12 May 2020 at 6:29PM

I think you'll find the consensus is DIY.

Factsheet here

https://www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

Start low and start with a letter. Do the fine tuning by phone. Get confirmation in writing. Don't pay till you get it.

Don't think you have to treat everyone equally nor that you have to use al your lump sum. It's individual negotiation.

sourcrates · 12 May 2020 at 6:46PM

If you let stepchange do it for you, they will require you to pay them the lump sum upfront, they will then just basically ask each creditor what they would settle for, and then pay it, there would be little in the way of negoatiation.

You could end up still owing money, which you don`t want to happen.

Stepchange are good, but are creditor biased in some ways, as thats how they are funded.

Always best to have a go yourself, if you don`t get the deal you want, wait 3 months and try again, think of this as more of a marathon, than a sprint.

JamesC3 · 13 May 2020 at 8:48AM

Thank you both for your comments. I shall have a go myself.

JamesC3 · 14 May 2020 at 5:16PM

Hi,

Sorry, another question on writing to creditors.

My DMP is actually a joint one. It is in both mine and my partners names. Most of the debts are in my name, but two are in my partners name and therefore the letters from the creditors get addressed as such. Dear Mr etc, Dear Miss etc.

I spoke to the National Debt Line who told me to send the breakdown of the total balance owed showing the creditor and the amount outstanding so that each creditor feels like they are being treated fairly/getting the same % of a lump sum.

i.e.

1 ABC Ltd O/S £3000, offer £900

2 XYZ Ltd O/S £2000, offer £600

3 PQR Ltd O/S £1,000, offer £300.

Should I do/send a separate list for just the ones in my name (and send it to ‘my’ creditors) and a separate one for the two in my partners name (for ‘her’ creditors)? Or should I combine the two?

James

Willing2Learn · 14 May 2020 at 5:20PM

Follow the link below, to the letter template you should use when an account is in joint names:
Sample letter - Personal information under the Data Protection Act (joint names)

JamesC3 · 14 May 2020 at 5:33PM

Thanks. The DMP is in joint names, but her credit card(s) are just in her name.
So when I write to Halifax on her behalf (the credit card and bills are solely in her name). Do I still use the joint letter?

Willing2Learn · 14 May 2020 at 5:39PM

Yes. For the letter to be valid, it requires both signatures.

JamesC3 · 14 May 2020 at 7:21PM

OK, thank you very much.

fatbelly · 14 May 2020 at 10:26PM

JamesC3 said:

Hi,

Sorry, another question on writing to creditors.

My DMP is actually a joint one. It is in both mine and my partners names. Most of the debts are in my name, but two are in my partners name and therefore the letters from the creditors get addressed as such. Dear Mr etc, Dear Miss etc.

I spoke to the National Debt Line who told me to send the breakdown of the total balance owed showing the creditor and the amount outstanding so that each creditor feels like they are being treated fairly/getting the same % of a lump sum.

i.e.

1 ABC Ltd O/S £3000, offer £900

2 XYZ Ltd O/S £2000, offer £600

3 PQR Ltd O/S £1,000, offer £300.

Should I do/send a separate list for just the ones in my name (and send it to ‘my’ creditors) and a separate one for the two in my partners name (for ‘her’ creditors)? Or should I combine the two?
James

When I do this for my clients at the CAB, I don't do it like that. If the creditor asks what others are being offered (rarely happens) then I tell hem. Otherwise it's individual negotiation.

I'm not sure what the subject access request was all about. Sometimes we do a s77-79 request. If it's a consumer credit act debt, and the creditor can't supply the paperwork then it strengthens your hand for the negotiation. A s77-79 request is a formal request under the consumer credit act, has to be accompanied by £1 payment and renders the account legally unenforceable until complied with.

A SAR doesn't do that.

JamesC3 · 1 October 2020 at 5:21PM

I just wanted to update this thread to try and get a bit of sanity back. I have been very busy typing letters left, right and centre to my various creditors and receiving replies and then again replying.

THE BAD NEWS – I didn’t receive the £8.5k lump sum I was expecting. I was gutted at the time, but due to COVID-19 my company delayed the decision a few months and have now decided to not pay any bonuses. I did receive a small annual increase though. As around 18% of our workforce was laid of I won’t complain about it though. I also had to put £2k of costs on a credit card, due to one: our fridge/freezer breaking down and needing repairing, two: my car failing an MOT and needing two new tyres and a new exhaust and thirdly my wife’s car had the catalytic converter nicked from her car

CREDIT REPORTS – I obtained all three credit reports and whilst one showed 2 credit cards that were on my DMP, I managed to clear those off. However, the other two credit reports showed multiple late payments on two creditors for 2016 and 2017. These were also on my DMP.

WIFES DEBTS – I have also obtained the three credit reports for two outstanding debts for credit cards on the DMP in my wife’s name – but my debt. One has a default date of January 2015 and the other February 2016. As these were put on in 2014 I have queried the one that has a default date of February 2016 and am awaiting a reply.

THE GOOD NEWS – The £16k I had outstanding (original £14k plus additional £2k) is now down to £5k and there are just two debts eft outstanding to pay.

The credit cards I still have we have been using to buy shopping/petrol each month and clearing them off each month.

On one of the debts I did have I managed to get a reduction of 85% via a F&F settlement offer meaning I ‘only’ had to pay £385 off to clear that one. Three others offered between 15% and 25% off. The remaining were smaller amounts and I paid those off in full.

Hoping to have, or I should say I will have the final £5k paid off by the end of the year.

Thanks for the advice given to me by the people who posted on this thread and all the other hundreds of threads I have read on this website.

I’m a bit down about the 2016 and 2017 late payments that happened whilst I was on a DMP, but I guess it could have been worse. Next year I will start saving for a deposit on a house. Although as the late payments won’t fall off until 2023 I will have a whilst to go I guess.

Anyway, it is what it is. Thanks again for all the advice. Wish I’d looked here years ago!

Cheers,

James

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