Full and final payments for DMPs

[lee.j]

I would just like to know if anyone has information about full and final payments.

I have a meeting this afternoon regarding getting a remortgage to pay off a debt management plan and credit cards that have arisen over the last few years.

I have a house worth approx £120,000 and an interest-only mortgage which stands at £78,000. I have been on a DMP for almost 2 years which now stands at £11,000 but have other debts of £8,000 so a total of £19,000. From preliminary discussions it seems that I may be possible for a remortgage to clear these debts and start again.

To clear the DMP debts of £11,000 should I offer a full and final settlement or is it best to pay off the whole lot? From what I have learnt, a full and final settlement will mean that creditors will show a 'partially satisfied’ on my credit rating wheras a normal full settlement will show ‘fully satisfied’. I am two years into a DMP and either way I will have another four years of black mark against my credit rating whether I pay in full or not.

If I could give a full and final settlement, I may be able to save a couple of grand on a remortgage but will this cause problems for the future? I will know more later today about the remortgage and will have a few days to decide what to do.

Lee

[Adam Davies]

Hi Lee
My own personal advice would be to offer the full amount due and to cut up any credit cards that you are left wit.
I feel that you are doing the correct thing in remortgaging to clear all your debts.
It may be worth speaking to your creditors and explaining to them what you are planning and ask them for a settlement figure.
To be honest the difference of 2k on your mortgage will be nominal in terms of the repayments.Also if you shop around you may find a good fixed rate deal that may well mean that you could borrow the extra 19k with only a small increase on your current mortgage payments[make sure that you take into account the early settlement clauses if you think that you may want to move within the fixed rate period]
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[lee.j]

Thanks for the advice. I have just been approved to borrow an extra £19k on a remortgage so I can clear all my debts. It is a two year fixed rate and I will be paying just over £50 per month than my existing mortgage and, when I clear my debts, I will be saving over £250 per month plus I will have cleared my name except for another 4 years before the DMP scar disappears. I just have to get final approval from the surveyor who will be here in the next 10 days. If that is approved, I am back on my feet and I will sleep at night without the constand panic attacks. I will keep you all posted as it looks like there is light at the end of the tunnel.

Thanks
Lee

[aguise]

Great news Lee. Well done
Ang

[Adam Davies]

Hi
That is good news
Good luck
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[Oliver]

Excellent news Lee well done and all the best for the future.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp