Could I settle a DMP early with a lump sum?
If you receive a lump sum, such as a windfall or redundancy payment, you should let your DMP provider know as soon as possible. After assessing your immediate needs and circumstances they may recommend one of the following options:
- Pay the money into the DMP to spread evenly among your debts. Doing this will reduce the term of your DMP
- When possible repay your creditors in full
- Approach your creditors with partial settlement offers based on the money you have available, requesting that the remainder of the debt is written off if the lump sum is less than the debt balance owed
Creditors are not obliged to agree to a partial settlement offer. With that said, there’s no harm in approaching them and asking the question to see if any discounts are available.
You could also sell assets to pay off your debts. These include things such as vehicles, antiques and valuable goods such as jewellery.
What if I had a windfall or won the lottery during my DMP?
If you won the lottery during your DMP, you would be expected to repay all of your debt in full.
If you won a couple of thousand pounds, there’s a chance you would be expected that you pay some of this into the plan. This would depend on things such as how much debt you still owe and how this lines up with the amount of money you’ve won.
On a positive note, it does mean that your plan would end quicker than you first expected. You may even be in a good position to make full and final settlement offers on your debts.