www.iva.co.uk

I have been in a DMP since Sep 09 owing approx £37k to 9 creditors now. I may be in a position soon to borrow money from family to pay some of this debt off. Do you think that I can make a reasonable offer to my creditors as final settlement. If so what percentage of the debt are they likely to accept?

I would have thought so - but take advice directly from your DMP company who will have experience of making such settlements.

Thanks Mel I have asked the question to my DMP company and they have said its up to me ! I just wondered what percentage was reasonable enough to be accepted.

How much can your family member afford, and how much do you currently still owe to creditors?

Hi
I would look at offering around the 25p in the £ mark, so 9-10k in total
Regards

Hi Mel - I owe approx £37k and was thinking of borrowing £20k which would enable me to clear my debts and stop all the phone calls and then obvisouly I will be making my £350 payments each month to my family.

Hi Andy - I didnt think that they would accept such a low amount. I was thinking that they might not even accept 50% !

Thanks for your advice guys.

I would love to hear from someone who has actually been in the same situation please also.

Hey Tutu

As with all things in life you can never assume anything many creditors would prefer a lump sum back and close the debt than keep it dragging out hoping for more money. When people go into IVA's debts get sold on at a reduced rate anyway a lot of the time so creditors are aware and budget in bad debts into their practice.

Andy can correct me if I am wrong but you have a DMP company working on your behalf at the moment who has negotiated lower payments to your creditors etc and you pay them a percentage of your monthly contribution for their assistance. I wouldn't have thought that would stop you approaching your creditors yourself on the phone and asking what's the minimum full and final they would accept to close the account down. Advise them you haven't got the money but a family member may lend you the money to pay it off if its a reasonable amount. Do the same with all 9 of your creditors and see how much you need if its £20k or under then as long as your family member can do this for you then you are set to go. Just make sure you get it in writing from the creditor that the payment is full and final payment and account closed. You can go through the DMP to negotiate with the creditors but you will pay them quite a bit for the privilege as well when you could just as easily do it yourself.

Whichever route to undertake I wish you the best of luck

Hi
Very often creditors will write to you offering a heavy discount, I have had two clients in the last week who have been offered a 70% reduction to settle.
Many creditors will sell the debt onto a debt collection agency for 10-15p in the £ after it has been under a DMP for several months.
Regards

Other than Barclays and Lombard Direct, all of my creditors sold the debt on when I was in a DMP. Barclays did so after my IVA was approved.

All the best with your offer from myself too. x

You are definately in a good bargaining position there - my advice would be to pay as much over as you can afford to repay overa realistic timescle, as I assume your funder will want the loan repaying?

Update is that I have sent letters off to all companies and I am awaiting responses . Its been a week now and I havent heard yet . Will let you know ...........

Fingers crossed.

No replies yet to my offers . Not sure how long they will take. Did get a letter today from a solicitors though stating that I need to repay all of the debt on the loan that I have , maybe they crossed in the post !

1 accepted and 1 declined at the moment... still waiting for 6 !!