Debt Management Forum - DMP Query
About Us Contact Us Debt Management Companies Do I Qualify For Debt Management Debt Management Forum
Debt Management Forum
Debt Management Forum
Home | Profile | Register | Active Topics | Members | Search | FAQ
Username:
Password:
Save Password
Forgot your Password?

 All Forums
 
 Debt Management Plan Forum
 DMP Query
 New Topic  Reply to Topic
 Printer Friendly
Author Previous Topic Topic Next Topic  

Gill
New Member

3 Posts

Posted - 02 Jan 2011 :  20:32:43  Show Profile  Reply with Quote
I'm about to complete the sale of my house which will release about ?65k in equity, I owe ?28k and am in a debt management plan. I've only been in the debt plan for 12 months and was due to pay off the debts using the equity.

I have been made aware that the longer I keep the DMP going, the more likely I am to get a better settlement offer and therefore pay less to clear them. Is it worth me continuing the DMP or should I just pay the debts and be done with them?

Phil Corfield
Debt Management Expert



897 Posts

Posted - 02 Jan 2011 :  21:43:29  Show Profile  Reply with Quote
Hello Gill & welcome to the forum

Congratulations on having the opportunity to become debt free.

The purpose of a debt management plan is to help you manage your creditors and debts in times of financial difficulty.

As you have sold your main asset (assuming you don't have another major asset), then your creditors don't have to be paid back in one go, by settlement offers or any other way. Your creditors in a DMP are unsecured so although they would want your available funds, they have no claim to it.

However, to answer your question, I would be inclined to settle your debts as quickly as possible; particularly those that have not suspended interest and/or charges or those who have only reduced interest (if applicable).

Your DMP provider is expected to divulge up to date information to your creditors when asked and if your creditors ask about your property, they will know you have funds to clear your debts and thus could quite rightly begin charging full interest and charges or even backdate this to the start of the plan if they so wished.

It's not really worth the gamble to continue with your DMP just to get a better settlement which wouldn't be that much of decline over 6 months or so. Some of your creditors may want the full balance anyway.

It's a decision only you can make, but the sooner you're debt-free, the sooner your credit file will begin to improve and I believe the general thought is being debt free is a much more comfortable lifestyle than to one with debts.

Best of luck to your future.

I am a CertDR qualified Debt Advisor and a Director of Bright Oak.
To contact me about a debt management plan or general debt advice please here:
   
Go to Top of Page

Beverley Budsworth
Debt Management Expert



251 Posts

Posted - 04 Jan 2011 :  14:55:43  Show Profile  Reply with Quote
Hi Gill,

As Phil has said it good to hear that you have got yourself in a good position rgearding your finances.

As Phil also mentioned, it would probably more beneficial to look at settling your debts now. Not only due to any possible interest added, but how much you would actually save.

If a creditor were to offer say 20% discout, the more you reduce your balance, the less 20% is actually saving you.

Also if you are paying for your DMP, you will also be paying monthly fees unnecessarily.

I am a Insolvency Practitioner and Managing Director of The Debt Advisor. To contact me about Debt Management Plans, IVA's or general debt advice please click here:
   
Go to Top of Page

Gill
New Member

3 Posts

Posted - 12 Jan 2011 :  17:15:29  Show Profile  Reply with Quote
Thanks for those replies.

Ok, if I am going to settle, how is the best way to go about it?
Go to Top of Page

Phil Corfield
Debt Management Expert



897 Posts

Posted - 14 Jan 2011 :  12:52:40  Show Profile  Reply with Quote
Hello again Gill

The best way to do this is to write a letter to each creditor (you must write to each account of each creditor if you have more than one) and request a settlement balance. These may be less than the current balance.

You have two choices once you know the settlement balances.

1) Pay the amount and close the account.
2) Write again with an offer of payment that is less than the settlement balance and see if they will accept. This will take longer and may prove counter-productive if there are fees and/or interest being charged whilst you negotiate. The plus-side is you may pay even less to clear the account.

It's best to have the settlement balance in writing so you have proof of the amount before paying it.

Insist that each creditor updates your credit file with one of the credit reference agencies - you should monitor this to ensure that each account has been updated as settled.

Best of luck with a debt-free future.

I am a CertDR qualified Debt Advisor and a Director of Bright Oak.
To contact me about a debt management plan or general debt advice please here:
   
Go to Top of Page

James Falla
Debt Management Expert



277 Posts

Posted - 17 Jan 2011 :  19:24:44  Show Profile  Reply with Quote
Hi there Gill

I would certainly offer lump sum settlements to your creditors now. My suggestion would be plump for offers of 50% of what is currently outstanding and see where you get to.

Be ready to answer a question about where the funds have come from and think about what you will say. If your creditors think you have more money available, they are clearly going to push for a better return.

Personal Debt Expert
BeatMyDebt.com
Go to Top of Page

Gill
New Member

3 Posts

Posted - 19 Jan 2011 :  11:02:58  Show Profile  Reply with Quote
Ok, I'll let you know how I get. Thanks for all the responses.
Go to Top of Page
  Previous Topic Topic Next Topic  
 New Topic  Reply to Topic
 Printer Friendly
Jump To:
Debt Management Forum © 2010 - 2017 Debt Management Plan Forum Go To Top Of Page
Snitz Forums 2000
Complaints Procedure | Other Sources Of Help | Credit Rating | Forum Rules | Terms of Use | Privacy & How We Use Cookies
(c) Channel Active Limited. Company Number: 06412452. Data Protection Registration: Z1332750.
Telephone calls may be monitored or recorded. Authorised and regulated by the Financial Conduct Authority.
Debt Management Plan Forum, 10 Bradenham Place, Penarth, CF64 2AG. Tel: 02920 435421.