When to pay back debts? And settlements and default removals advice

A question about : When to pay back debts? And settlements and default removals advice

I have around Ј5k of debt across 7 creditors and I am currently in a dmp some creditors have given me defaults. I have seen some sample letters in order to try and get them removed.
In a nutshell I have recieved some money that can pay these debts. I want to offer them settlements but what percentage do I offer also on basis debts are fully satisfied/settled and defaults removed..

What's the best way to start shall I stay on dmp and try and get defaults removed first before offering settlement or shall I pay off and then try with default removal?

Any advice would be great

Best answers:

• The defaults can only be removed if they are in error. If you did fall behind in payments you have defaulted and it's an accurate record. They will fall off your file 6 years after they were added.
  in your situation I'd try some full and final settlement offers to get the debts cleared and free up some income.
  Kate x
• Why full payments rather than part if I can get dicount? Is partially satisfied worse that satisfied? By paying back all debt will I see an increase in credit rating
• By full and final settlement I mean paying less than you owe but that is considered as full settlement by the creditors. Each will vary on what they'll accept but it's open to negotition. You will need to get their agreement in writing to avoid any repercussions in the future.
  By paying back the debts they will show as satisfied on your credit file but they will still show for 6 years from the default date.
  Are you considering taking out more credit that needs your rating to improve?
  Kate x
• Well yes I have received inheritence so I will looking to get a mortgage
• Not being funny, but if you've come into money why are you not just paying what you owe. Presumably you spent the money to build up the debts, yet you're trying to get away with paying less. As I understood it, offering a full and final settlement would be something for situations where people cannot, and have no realistic hope, of paying back what they borrowed. You're not in that situation and quite aside from the moral aspect of it, why end up with another black mark on your credit file? Just my thoughts anyway, I know many will disagree and say pay the minimum you can get away with.
• Well I have had offers from creditors already. That's the question I'm askin difference between paying less or more in regards to full satisfied to partial?
• No harm in trying. Everything you get off is a bonus.
• https://forums.moneysavingexpert.com/...045&highlight=
  OP - you asked the same thing two months ago. I don't wish to be rude but the advice won't have changed. The only thing that will repair your credit file is paying the debt, time (for defaults to drop off) and a clean credit history going forward.
  Kate x
• Thanks for all advice guys I'll pay off in full I think as only 5k in full and if it says it full satisfied that be ace plus shouldn't need much of a mortgage anyways so should be ok with 60-70% LTV to get that in maybe year or so
• Does anybody know if you pay your debts off and have lets say 2 years remaining on the default whether the creditor will take off the default as goodwill. Lets say you pay back in full. Has anyone done it?
• I have same question
• The answer is that they shouldn't remove the default from your file as it is supposed to be an accurate record.
  However, there are stories of lenders who will do that, particularly if you are making that a condition of full payment.
  So you can try...
• I get what you're saying Mattye and everyone's entitled to their opinions. But I think it comes down to taking responsibility for the agreements we enter into. OK banks are paying less interest than they are charging but no one goes into a credit agreement not knowing what the interest rate is, it's always made clear. It's up to people if they choose to take that loan and in my opinion there is then no excuse for paying it back in full in line with that contract when the money is available. I am not saying this as a smug person with savings, by the way - I am also busy clearing debts but I'm trying to do it by taking responsibility and not blaming other people or 'the system'.
  Also, a lot of full and finals seem to be for a relatively small percentage of the balance which I can't believe does in fact cover the full balance plus interest, especially taking into account costs incurred chasing non-payment over the years.
• If you have the 5k I would go for full payment on condition the defaults are removed and get it in writing. Also, say it's from a relative and is conditional. They won't give you the money unless the defaults are gone. I suspect you might be lucky if you are offering immediate and full settlement.
• For me it's just a moral thing - if I spend money, I pay it back. Otherwise it's taking what isn't mine which I don't do in other areas of life. And if the DCA may have bought the debt cheaply, that means that the original lender has already paid for some of your spending. I'm sorry, I just cannot reconcile trying to get stuff for free (i.e. all the things someone bought on credit and not paying it all back) as OK.