Paying of balances on DMP

A question about : Paying of balances on DMP

Hi all,

I've been on a DMP with stepchange for over 3 years. I've reduced my debt by two thirds and now I'm in a position where I can pay the balances off with an interest free loan.

This may sound like a silly question, but should I just ring up the creditors and pay the balance using a debit card? Or should I transfer the money to stepchange and ask them to do it?

Thanks in advance

Best answers:

• Do it yourself, you should be able to negotiate a reduced settlement figure on each account, don't ask, don't get.
• Hello there,
  As Sourcrates mentions you should see if you can negotiate a discount. This is known as a full & final settlement. We've a fact sheet with a useful sample letter that you can use in your negotiations:
  https://www.nationaldebtline.org/EW/...s/Default.aspx
  Hope you find this information useful!
  Best wishes,
  David @ National Debtline.
• I was considering doing that, but I'm worried about the effect it will have on my credit file.
  I'll be looking to move house next year. Would it not be better for my credit file if they were paid in full?
• I know this is a rather specific question, but would a partial settlement be likely to have an effect on a mortgage application with the halifax?
• You can ask that your debt is marked as 'fully settled / satisfied' as a condition of your F&F offer. Your creditors however do not have to accept this.
  It depends I suppose how low the F&F offer you are making is. If it's very low, then it's probably worth it because it will clear so much debt. But if you are offering 80%, then you aren't actually saving much, so perhaps better to just pay them in full.
  Who is this interest free loan coming from? Have your creditors currently frozen interest? I am not sure I would want to borrow from family to repay debts where no interest is being charged.
• The lone came from a family member.
  I have now bitten the bullet and paid off the full balance on each of the accounts. They will all be marked as paid in full by next month.
  The reason I've been keen to get off the DMP is that I've got another baby on the way and so I'll be looking to move house next year.
  The defaults relating to my DMP were registered in 2011. Obviously they wont drop off my credit file till 2017.
  Will I stand much of a chance of a mortgage 6 months after the accounts have been paid in full? I currently own my own home and have a mortgage with the halifax.
  I've never missed a payment on the mortgage.