Full and final settlement

Welshie28 · 30 March 2017 at 1:01AM

Hi all.

Some help would be appreciated please

I am currently in a DMP with Stepchange. All has been going well but now both of my debts have been passed to third parties, one being HSBC Repayment Services and the other, Cabot Financial. I am interested in full and final settlement. I owe £12,800 to HSBC and £3900 to Cabot. A family member has offered me £7000 to pay them off. Cabot have only recently taken over the debt, HSBC took the other debt over about 3 months ago and have defaulted me but Cabot state that if I don't pay the arrears of £1800 then I will be defaulted in 6 months. I am looking to offer £5500 to HSBC and £1500 to Cabot as full and final settlement. From all of this information, how likely is it that this will be accepted, bearing in mind my DMP is set to run until the end of 2021?

Thank You.

January2015 · 30 March 2017 at 8:30AM

Welshie28 wrote: »

Hi all.

Some help would be appreciated please

I am currently in a DMP with Stepchange. All has been going well but now both of my debts have been passed to third parties, one being HSBC Repayment Services and the other, Cabot Financial. I am interested in full and final settlement. I owe £12,800 to HSBC and £3900 to Cabot. A family member has offered me £7000 to pay them off. Cabot have only recently taken over the debt, HSBC took the other debt over about 3 months ago and have defaulted me but Cabot state that if I don't pay the arrears of £1800 then I will be defaulted in 6 months. I am looking to offer £5500 to HSBC and £1500 to Cabot as full and final settlement. From all of this information, how likely is it that this will be accepted, bearing in mind my DMP is set to run until the end of 2021?

Thank You.

Others with more experience will be along to comment, but I'll comment based on my own limited experience with my F&F offers.

You don't say how long you've been in a DMP, nor how much the monthly payments are. When I made F&Fs to accounts with similar sized balances to your two accounts, I was in a DMP forecast to end 2024. Both accounts had defaulted. Both are handled by Debt Collection Agencies (DCAs) but have not been sold by the originally creditor. The answers I got were no thank you, but we would settle at 90% of the balance (I started at 30%). I batted back and forth and the lowest they would go was 70% of the balance (which I couldn't afford so I am still making DMP payments).

I totally understood why they wouldn't go lower. I was paying approximately 1% of the balance each month. So on the larger debt they were getting well over £100 each month and on the smaller debt they were getting close to £50 (remember my balances were different to yours). Why would they settle for a significantly reduced figure when they were getting this nice regular sum each and every month.

Personally I think if you are going to go for F&Fs then don't offer the full amount to start with. Start at a low percentage of the balance owed and then you have some negotiating power to increase the offer if/when they refuse it. I think they will refuse the highest offer though because 2021 is only four years away and they are getting a monthly decent amount already.

Good luck.

National_Debtline · 30 March 2017 at 9:58AM

Hi

I agree with January2015’s comments. F+F settlements tend to be more likely when the debt has been sold on to debt collectors, and will be considered on a case by case basis. There’s no harm in making your offers though to see what kind of response you get. Stepchange may assist you in making the offers, or you can do it yourself using our factsheet and sample letter. Make sure the creditors confirm acceptance in writing before making the payment.

www.nationaldebtline.org/EW/factsheets/Pages/fullandfinalsettlementoffers/lumpsumoffers.aspx

James
@natdebtline

Welshie28 · 30 March 2017 at 5:41PM

January2015 wrote: »

Others with more experience will be along to comment, but I'll comment based on my own limited experience with my F&F offers.

You don't say how long you've been in a DMP, nor how much the monthly payments are. When I made F&Fs to accounts with similar sized balances to your two accounts, I was in a DMP forecast to end 2024. Both accounts had defaulted. Both are handled by Debt Collection Agencies (DCAs) but have not been sold by the originally creditor. The answers I got were no thank you, but we would settle at 90% of the balance (I started at 30%). I batted back and forth and the lowest they would go was 70% of the balance (which I couldn't afford so I am still making DMP payments).

I totally understood why they wouldn't go lower. I was paying approximately 1% of the balance each month. So on the larger debt they were getting well over £100 each month and on the smaller debt they were getting close to £50 (remember my balances were different to yours). Why would they settle for a significantly reduced figure when they were getting this nice regular sum each and every month.

Personally I think if you are going to go for F&Fs then don't offer the full amount to start with. Start at a low percentage of the balance owed and then you have some negotiating power to increase the offer if/when they refuse it. I think they will refuse the highest offer though because 2021 is only four years away and they are getting a monthly decent amount already.

Good luck.

Hi and thank you for your response.

I have only been in a DMP since April 2016. I pay £225 per month to HSBC, I used to pay £519 before my DMP and I'm paying £78 to Hitachi (now Cabot) and I was paying £190. I was under the impression that the third party buys the debt for pennies to the £ so would be making a profit if settling at full and final settlement. I must have misunderstood. I will make the offer and see what they say.

January2015 · 30 March 2017 at 6:11PM

Welshie28 wrote: »

Hi and thank you for your response.

I have only been in a DMP since April 2016. I pay £225 per month to HSBC, I used to pay £519 before my DMP and I'm paying £78 to Hitachi (now Cabot) and I was paying £190. I was under the impression that the third party buys the debt for pennies to the £ so would be making a profit if settling at full and final settlement. I must have misunderstood. I will make the offer and see what they say.

Hi

You are right - 3rd party DCAs do buy debts for pennies in the pound. Are you sure your debts have been sold and are not just being managed by the people collecting them.HSBC Repayment Services sounds like a collection division of HSBC - so probably still with the original creditor.

Even so - DCAs rarely deal low if they are getting regular repayments of the level you mention - and why would they?

Welshie28 · 30 March 2017 at 6:31PM

January2015 wrote: »

Hi

You are right - 3rd party DCAs do buy debts for pennies in the pound. Are you sure your debts have been sold and are not just being managed by the people collecting them.HSBC Repayment Services sounds like a collection division of HSBC - so probably still with the original creditor.

Even so - DCAs rarely deal low if they are getting regular repayments of the level you mention - and why would they?

I did think the same about the HSBC debt but the Cabot letter for the Hitachi debt stated that they have bought the debt and Hitachi will no longer be involved so maybe just that debt has been sold. I think I might just continue to pay them for the next year or so and then offer F&F to both debts then.

Thank you for your help

sourcrates · 30 March 2017 at 8:43PM

Cabot are debt buyers, your other account is still with HSBC.

If your making regular payments, and there are no other extenuating circumstances, it's unlikely Cabot will offer much discount, they may go to 15/20% but not much more.

HSBC will most likley dismiss your offer out of hand.

Blake10 · 11 February 2018 at 7:06PM

Hi
Can anyone help, I had a unsecured Loan in 2006 and have only been alerted now by the Mortgage company that it is showing as an equitable charge on the property. The Charge was done by Lloyds Bank, There apparently was a settlement offer made available by Westcot in 2007. Do I contact requesting a full and Final from Westcot or Lloyds Bank and will this get the charge removed?

Blake10 · 11 February 2018 at 7:12PM

Hi
All replied will be grateful.
I have only been alerted by Mortgage Company that I have an equitable charge from Lloyds Bank 2007 for an unsecured loan. Apparently There was an offer from Westcox in 2007 for a full and final, would I contact Lloyds or Westcox to make the full and final to get the charge removed?

fatbelly · 11 February 2018 at 7:43PM

Blake10 wrote: »

Hi
All replied will be grateful.
I have only been alerted by Mortgage Company that I have an equitable charge from Lloyds Bank 2007 for an unsecured loan. Apparently There was an offer from Westcox in 2007 for a full and final, would I contact Lloyds or Westcox to make the full and final to get the charge removed?

You need a new thread of your own really.

Now that there is a ccj and a charging order on the debt they are not likely to accept (or not likely to give a good offer of) a full & final settlement deal.

You'd need to contact Lloyds if you want to try it. Wescot would have been a DCA they were using at the time.

If nothing has happened in 10 years I'd be inclined to leave it alone but pay it off when you sell the house.

Full and final settlement

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free