debt management

[rickyg33]

Is there any reason why this strategy could not be put in place:

(1) raise an amount of money through equity in our property [secured]
(2) pay off one of the creditors entirely
(3) pay lump sums with what's left to other creditors to reduce debt
(3) enter into a debt management plan to repay the rest

rickyg

[Jo Rolland]

The problem would be that the other creditors would be aware by checking your credit file that you had paid off one creditor in entirity and therefore this would appear as preferential treatment.

I have known creditors to refuse a DMP because of this and they have taken legal action to recover monies owed to them.

If you are raising a lump sum, you should share it between all your creditors on a pro rata basis and if these lump sums paid were not in full and final settlement, then calculate a repayment proposal to offer reduce payments to your creditors for the remaining debt.

[rickyg33]

My wife and I are going through a separation and there's a credit card in her name. There are about six credit cards in my name.

My wife is likely to get family help in clearing her debt, but I have no similar help. I will have to offer to pay something per month to my creditors over a long period of time.

I would hope that my creditors would allow this. Any thoughts?

rickyg

[elizabethr]

I had been thinking along similar lines - remortgage (not a secured loan through a non-reputable though) then see what my creditors would take in full and final all on same %. My thoughts though are that

1) not sure if I could raise equity with having the amount outstanding that I do as the mortgage lender would want to ensure that borrowing enough would be affordable.
2)If the creditors thought I had some money would they not be more inclined to dig their heels in and want it all back.

Thoughts please

[Adam Davies]

Hi
Ricky,you could use your above plan as long as you paid each creditor equally in ratio to what they are owed,so for example if you owed 50k and had 10k to pay off pro rata you would pay £200 off each 1k owed.

Elizabeth
You could use a mortgage broker to see how much you could raise,there are three reputable brokers who post on here,Andrew from Brightoak,Tony[Welshboy] and MikeB from Leybridge.
You may be better touse an IP to negotiate a full and final IVA rather than trying yourself.
Regards