Full and final settlement help thread

leighavfc · 2 November 2016 at 11:07PM

Hi all

I am in the position to pay a lump sum off my remaining debt, there will still be around £1400 left to pay after i have done this. This is why i am interested in making F&F settlement offers as im hoping i can knock this £1400 off with them.

Firstly if you do this F&F offer does it go down on your credit file as something different other than a settled account?

Are there any templates for F&F offers? I am rubbish at writing letters!! Another question i have is that i have complaints in with 5 PDL companys i currently owe money to, should i wait for these complaints to be resolved before sending F&F offers?

fatbelly · 2 November 2016 at 11:53PM

leighavfc wrote: »

Hi all

I am in the position to pay a lump sum off my remaining debt, there will still be around £1400 left to pay after i have done this. This is why i am interested in making F&F settlement offers as im hoping i can knock this £1400 off with them.

Firstly if you do this F&F offer does it go down on your credit file as something different other than a settled account?

Are there any templates for F&F offers? I am rubbish at writing letters!! Another question i have is that i have complaints in with 5 PDL companys i currently owe money to, should i wait for these complaints to be resolved before sending F&F offers?

It should be marked partially settled

There is a template letter here

https://www.nationaldebtline.org/EW/sampleletters/Pages/Full-and-final-settlement-offers-(sole-name).aspx#

Yes, wait for complaints to be resolved first

leighavfc · 3 November 2016 at 1:02PM

Thanks for your reply fatbelly

I take it thats its better for my record/credit file that i settle in full or does it really matter?

The reason i say that is i want to get onto property ladder in next few years (after debt has been paid off obviously). I just want to make sure i do all the right things so my credit score/file is as good as it can be when im ready to apply for a mortgage.

If partially settled causes problems further on down the line i will just pay up in full as this was the plan anyway before i read about F&F offers.

redux · 3 November 2016 at 1:14PM

leighavfc wrote: »

Thanks for your reply fatbelly

I take it thats its better for my record/credit file that i settle in full or does it really matter?

The reason i say that is i want to get onto property ladder in next few years (after debt has been paid off obviously). I just want to make sure i do all the right things so my credit score/file is as good as it can be when im ready to apply for a mortgage.

If partially settled causes problems further on down the line i will just pay up in full as this was the plan anyway before i read about F&F offers.

Well, don't forget that old accounts stop being recorded at the agencies 6 years after the date of default, and bear that in mind if they are only a year or two away by now.

leighavfc · 3 November 2016 at 2:08PM

redux wrote: »

Well, don't forget that old accounts stop being recorded at the agencies 6 years after the date of default, and bear that in mind if they are only a year or two away by now.

Most of mine are only reaching year 3 at start of 2017, what would you do? im guessing its going to be at least 2/3 years before im anywhere near a position to apply for a mortgage

redux · 3 November 2016 at 3:34PM

leighavfc wrote: »

Most of mine are only reaching year 3 at start of 2017, what would you do? im guessing its going to be at least 2/3 years before im anywhere near a position to apply for a mortgage

I don't know exactly what relative weights a mortgage company puts on different elements of people's history. I would tend to guess that a default is more damage in the first place than the improvement difference between partial and full settlement later, but that could well be open to opinion or argument.

Maybe it is an option to offer partial settlement now, and consider voluntary further payment up to full settlement later. I don't notice much discussion of that here, so I don't know if it happens much or is even possible. Maybe others can comment.

National_Debtline · 3 November 2016 at 3:47PM

leighavfc wrote: »

Most of mine are only reaching year 3 at start of 2017, what would you do? im guessing its going to be at least 2/3 years before im anywhere near a position to apply for a mortgage

Hi Leigh

If we assume for simplicity's sake that all of your debts defaulted 1/1/2015, then they will all drop off your file completely on 1/1/2021 whether you have settled them fully, partially, or not at all in the meantime.

If you don't apply for a mortgage before then, arguably it is academic whether you settle in full now or settle for partial amounts. Obviously, partial settlements would enable you to preserve more of any future deposit you are trying to accumulate - having that deposit would be just as crucial as a "clean" credit report.

On the flip side (just to blur the picture a little more!), settling debts in full now may mean you can more easily access credit while the defaults are still on file; building up a track record of borrowing and repaying on time can help "rehabilitate" your credit file while waiting for those defaults to disappear.

Hope that helps.

Dennis
@natdebtline

leighavfc · 3 November 2016 at 7:08PM

National_Debtline wrote: »

Hi Leigh

If we assume for simplicity's sake that all of your debts defaulted 1/1/2015, then they will all drop off your file completely on 1/1/2021 whether you have settled them fully, partially, or not at all in the meantime.

If you don't apply for a mortgage before then, arguably it is academic whether you settle in full now or settle for partial amounts. Obviously, partial settlements would enable you to preserve more of any future deposit you are trying to accumulate - having that deposit would be just as crucial as a "clean" credit report.

On the flip side (just to blur the picture a little more!), settling debts in full now may mean you can more easily access credit while the defaults are still on file; building up a track record of borrowing and repaying on time can help "rehabilitate" your credit file while waiting for those defaults to disappear.

Hope that helps.

Dennis
@natdebtline

Hi Dennis

Thats exactly the two situations i had in my head, so thanks for confirming that.

The better situation for me imo will be to pay in full now and let my credit file improve before all defaults are removed. I say this because when my nan passed away a number of years ago, she left me around 7/8 k which has been in an isa or something that only my dad has access to. He will give me this as and when i want it. I did not ask for it to pay off my debts as it has been a topic of friction in the past and i didnt want all the hassle again. Although in hindsight it may have been the better thing to do, but i will say going through this period of financial difficulty has actually taught me a lot and i am much better with money these days .

Thanks for answering my questions, was very helpful :beer:

razzles · 7 November 2016 at 1:28PM

Hi All,

Will keep this briefish. over 10 years ago had over 50k of cc debit.
Started paying £1.00 per month to each cc company. Managed to settle 2 fairly quickly (remortaged so had the money to settle with) Some would not, over the years have increased the amounts paid, and full and final with a few more. Down to the last two. Just settled another this morning. The last one is now Halifax, owe 5500, they have come down to 3600 but wont budge any more. As the has been going on for over 10 years what action can they take if I just stop paying?

Thanks

sourcrates · 7 November 2016 at 2:29PM

razzles wrote: »

Hi All,

Will keep this briefish. over 10 years ago had over 50k of cc debit.
Started paying £1.00 per month to each cc company. Managed to settle 2 fairly quickly (remortaged so had the money to settle with) Some would not, over the years have increased the amounts paid, and full and final with a few more. Down to the last two. Just settled another this morning. The last one is now Halifax, owe 5500, they have come down to 3600 but wont budge any more. As the has been going on for over 10 years what action can they take if I just stop paying?
Thanks

Hi,

Makes no difference how old the debt is, all options are still open to the creditor, this would include taking you to court for non payment, having a CCJ registered against your name, an attachment of earnings order, should you still fail to pay, bailiffs attending your home, if you still ignored them, basically the full might of the law.

Thats what COULD happen, in reality, the debt would be chased "in-house" for a while, then maybe outsourced to some debt collector, they might pester you for a few more months, if you still dont pay, they may pass it to another collector, this may continue for years, eventually they may sell the debt on, then the new owner would pester you for payment, they would now have the option of the enforcement measures mentioned earlier, sometimes they pursue you to the grave, sometimes you just get forgotten about, its the luck of the draw.

Full and final settlement help thread

Comments

Categories

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