Author Topic: DMP Vs Final Settlement offers  (Read 1595 times)

becks5000

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DMP Vs Final Settlement offers
« on: May 20, 2012, 09:25:23 PM »
Hi,[/size]I've been in a debt management plan for 6 months with the CCCS, and owe approx £14K. I have lots of different creditors as I borrowed 'small' amounts from a lot of people (I fell into the dreaded pay day loan cycle.) Because of this I am finding it very hard to keep track of who owns my debt. I am getting letters from people for a debt I am already paying off with someone else! I am worried that my money is going to the wrong places and that I will have to pay off the same debts twice.I have an idea and I would like to hear some opinions. I know that often if you can offer a lump sum to clear off say 50% of a debt then many companies will accept this and write the rest off. My idea is to stop paying the amounts I am currently paying and pay them £1.00 a month. In the meantime I will save up money to enable me to target each debt separately and offer lump sum payments as and when I can afford to.The positives I can see are that:-I will be paying less back than what I currently will have to with my DMP. -I will pay them off quicker. - I know I am paying the right people as I will be negotiating with them directly.The negatives- I will need to pull out of my CCCS repayment plan.- It will take a lot of organising on my part, but something I am willing to do if it will work.- The companies I am paying £1 to will not be happy!I am due to get a pay rise soon, so I am keen to make the best decision which will see me debt free in the quickest time.


I will be able to save at least £300 a month, and even more after my promotion. ThanksBecky

James Falla

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Re: DMP Vs Final Settlement offers
« Reply #1 on: May 21, 2012, 03:35:31 PM »
Hi Becky
You are right, it is certainly possible to offer lumps sums to settle your debt if you have been in a DMP for 6 months or more. A good target to aim for is 50% of the outstanding debt, however I would personally offer c25% to begin with. You can always increase the offer later if need be.
In terms of saving the lump sum, you could back out of your DMP and start offering £1 a month. Do you know whether your creditors have frozen their interest and late payment charges? If they have, this strategy could trigger them into starting to add the charges again so you have to keep an eye on that.
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Joe Sanders

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Re: DMP Vs Final Settlement offers
« Reply #2 on: Jun 20, 2012, 07:21:04 PM »
Can i ask why you are in a DMP with £14,000 worth of debt and £300 per month in disposable income? I don't rate DMP's at all if im honest. You could have done a Debt Relief Order, on your own through the insolvency service!

James Falla

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Re: DMP Vs Final Settlement offers
« Reply #3 on: Jun 22, 2012, 10:38:20 AM »
Hi there Joe,
Unfortunately a Debt Relief Order would not be any good for Becky. One of the criteria of the DRO is that your disposable income must be less than £50 a month. They are very strict on it. As such if she can pay £300 she would not qualify. Therefore a DMP is probably the best solution given Becky's level of debt. The problem is the CCCS do not seem to be managing it very well. My advice would be to find a different DMP company to work with who will do a better job. Or as I mentioned before, she could pay all the creditors £1 a month and hold tight while she saves the money necessary to make lump sum settlements.
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