How does this letter look?

captainhaggis · 31 August 2009 at 11:40AM

Hi all,

I recently wrote to my creditors explaining that a change in circumstances at work means I'd be unable to maintain the current payment arrangement I have in place on my accounts. In the same letter I offered F&F payments on these accounts but they were all rejected (with the exception, kinda, of MBNA - see below).

So now I find myself having to write to re-negotiate the payments I'm making.

Can I ask you all whether you think this letter is appropriate?

Thanks :

I wrote to you recently to offer full & final settlement payments in relation to the above account in the expectation that my circumstances at work would soon change making me unable to maintain the current payment arrangement I have in place with you.

Knowing that I would have to reduce my monthly payments to you, I managed to find a friend prepared to lend me a lump sum of money with which I could offer you a pro-rata payment to settle my account.

Unfortunately, my full & final offer was rejected and I therefore find myself having to write to you to request the aforementioned reduced monthly payments on this account.

I have attached an updated Income and Expenditure Illustration for your information. As you will see, I have only £«amount» left per month with which to pay creditors. The offers I am making are worked out on a pro-rata basis and I’m writing to all of my creditors asking them to accept these payments.
In view of my circumstances and my commitment in the past to maintain the agreed payments on this account, I request that you accept the new monthly payment of £«Offer_Amount_mnthly». Additionally, if interest and other charges are being applied to my account, I would be grateful if you would freeze these so that all payments will reduce what I owe you.

Should my circumstances improve in the future, I will contact you immediately as I remain committed to the settlement of this account.

I look forward to receiving your reply.

ALSO, with MBNA (I've done a search and found a range of threads but nothing seems to be concrete), they rejected my 40% offer and said they'd settle at 50%. I think I might be able to raise that little bit more money but it will be a struggle.

HOWEVER, the offer was for a "short settlement" saying that the amount would remain on the file for 6-years but that no effort would be made to collect it.

How does that sound?

Thanks guys.

sammy115 · 31 August 2009 at 1:34PM

They may be prepared to accept a lower offer after a couple of months of reduced payments.

The letter sounds fine but I wouldn't be prepared to raise more money for a 'short settlement' if it is going to leave you struggling

cat4772 · 31 August 2009 at 1:36PM

It sounds fine - good luck with it CH

captainhaggis · 31 August 2009 at 2:10PM

Thanks a lot, guys.

I think I'll take up MBNA's offer and give my friend the money I'd be paying them each month until the others settle. So I won't be any more out of pocket each month. My friend is prepared to wait a bit for the money to be repaid so as they accept offers, I'll be able to get it from him to pay.

But I know he cannot give me much more than has already been offered.

GeorgeUK · 31 August 2009 at 6:41PM

Captainhaggis - you should have a read of some threads on here that mention short settlement. Most of the time MBNA treat this as a partial settlement rather than a full and final settlement. Definately not something you want to do especially when you are struggling with money.

If you do take a loan from your friend, it may be worth putting the agreement in writing so that he is at least covered should anything go wrong.

Have you spoken to CCCS or Payplan? If so it may be worth mentioning that in the letter. If not, they may be able to help arrange repayments with your creditors. I would not take the settlement offer from MBNA until you had everything in writing and you were happy with it. A short settlement may mean that THEY will not pursue for payment, but they don't mention that they won't pass it on to others to seek the payment. Please be careful with this one.

If in doubt, you could read the agreement letter they sent you to nationaldebtline to get their opinion. The exact wording in these letters is important and they don't mind using smoke and mirrors - in the same way they say thet the MAY take you to court which many people panic and and think that court proceedings are imminent.

How does this letter look?

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