Partial Settlement

Expatgolfer · 23 April 2014 at 2:55PM

There seems to be lots of discussions regarding this subject but I can't find a couple of facts that are important to me regarding my situation.

I have a £19,000 defaulted credit card debt with MBNA which is now handled by 1st Credit and discussions have been ongoing for about 4/5 years now regarding settlement of the debt. I pay nothing but the balance has remained fixed.

They have now agreed to a sum of £2,200 as a partial settlement and in their words, "Once the total amount of £2,200.00 has been paid your account will be closed and you will not be pursued for the remaining balance by 1st Credit or any other third party".

So my questions are:
1) Does the charge against my property EVER disappear? I plan to keep it until my death and pass on to my daughter, would it stand against her? Does it clear after 6 years?
2) Can they be believed that I will never be pursued by a third party?
3) They categorically refuse to accept it as F&F but would I be better to try to achieve a higher figure, (say £5k), as F&F than completing this partial?

Thanks in advance.
ExPg

National_Debtline · 23 April 2014 at 3:08PM

Hello there,

Would it be possible just to clarify that the debt is subject to a county court judgment and then a subsequent charging order? You mentioned the term 'charge'. If it is subject to a charge, and they accept the settlement, they should allow the charge to be removed - as the debt would be satisfied. A charge would not disappear after 6 years.

If it is a condition of the agreement they should not pass/sell the debt to a third-party. From a legal standpoint, and provided both you and the creditor have been honest in your dealings - a third-party should be prevented from successfully bringing any action against you.

Our understanding is that the vast majority of creditors seem to prefer the term partial settlement, especially where your credit file is concerned. Although the term full & final settlement seems to be preferred their statement is very clear. We have had callers in a similar situation to you demand that a creditor agrees that the payment is taken in 'full & final settlement'.

We have a full & final settlement fact sheet, which you can find *here*.

Best wishes,

David @natdebtline

Expatgolfer · 23 April 2014 at 3:31PM

Hi David,

Thanks for your help.

Yes there is a CCJ and a charging order, they have dealt with the matter well in my opinion and I am prepared to accept their promise of not passing it on.

Their wording re the settlement is, "We can confirm that we are willing to accept £2,200.00 as a partial settlement towards your account with £1,000.00 to be paid by 30th April 2014 followed by £50.00 per month until the remaining balance of the partial settlement has been paid." Does this mean the CCJ and charging order would remain or should they agree to remove it?

My credit rating is not particularly important to me as I am retired and have no intention of ever requesting credit again, I have a current bank account and a debit card and that is all I need. Would I be better to push for F&F or take this offer?

Tixy · 23 April 2014 at 3:50PM

I would ask them to include written confirmation in the offer that the charging order will be removed once the final payment towards the partial settlement is paid. Just for the avoidance of any doubt of both parties intentions.

National_Debtline · 23 April 2014 at 3:54PM

Once the debt has been paid to the creditor's satisfaction, you will be able to provide proof to the court. You should be able to apply for a certificate of satisfaction (this shows that the judgment has been satisfied). You can also apply to have the charging order removed. I think Tixy's suggestion is a very sound one (as always!).

Given the wording of their letter, I cannot imagine any court being allowing further action. On the face of it, their intention (and their agreement) seems very clear. You could always seek qualified legal opinion if you wanted to be 100% certain.

I must say, you've done very well to get a settlement agreed on a debt that is subject to a charging order. I doff my cap to you.

David.

Expatgolfer · 23 April 2014 at 4:06PM

Excellent advice, thank you. I have emailed them and told them that if they include the sentence as suggested then I will make payment before the end of the month.

Thanks for the doffing of the cap David but I won't take anything for granted until the deal is done, I will keep you informed.

Expatgolfer · 24 April 2014 at 12:12PM

I have had a reply to say that after the last payment has been made I should apply to the court to remove the charging order and they will not oppose. As far as they are concerned the account will be settled.

I think I will now go ahead and see what transpires.

Thanks again for the help.

National_Debtline · 24 April 2014 at 3:03PM

That's great, it all looks very promising.

David.

Partial Settlement

Comments

Categories

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