How do I do a full and final payment offer?

[lee.j]

I have just completed a remortgage of my house in order to pay off my debts and stop making myself so stressed and ill. I went on to a debt management plan two years ago with debts of £14,000 and have managed to pay off nearly £4,000 to date. However, I had a couple of other debts that I kept back at the time and with one thing and another I was left with an additional £8,000 which means I now have a total of £10K with my DMP and £8K outside of them which is why I went for the remortgage option.

The remortgage was quite painless and I will be paying less interest at a lower interest rate than I was on my current mortgage. However, I have only £15K spare but have a total of £18K to pay off debts so I have been considering the full and final payment offer to my creditors. I have looked at various websites and forums and many say to offer about 50%. However, my DMP case manager say I need 80% for them to do the liasing with the creditors in my DMP. The other £8K is for two credit cards that I need to negotiate myself. I have been advised to call these two creditors directly and offer a short settlement.

Does anyone know what is best in this situation and what it will do to my credit rating? I will have a bad rating for the next 4 years anyone from going on a DMP 2 years ago although my remortgage was quite simple. I don't want any more credit but I may change mortgage companies in a few years to get a better rate. At the end of the day I would rather pay them all off at a reduced sum as I don't quite have the full funds and perhaps I will have a little buffer zone in the bank then I don't have to worry any more and will have a fresh start. Should I contact my creditors in the DMP directly to negotiate a final sum or go through my case manager? Any advice would be greatly appreciated.

Thanks

[Adam Davies]

Hi
I would personally go through your case manager as it is very difficult to deal with creditors yourself.If they agree to the 80% that will be 8k leaving you 7k to pay off the majority of the credit card debts.If you are disciplined you can then chip away at the remaining 1k
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[MelanieGiles]

I would change DMP companies and ask someone else to commence fresh negotiations for you. Your existing company will probably not want to do this for you, given the existence of the other creditors.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk