Full and final settlement help thread

dobbollah

yeah thats what i put on my letter........... :-)

NewcastlePaul

Was originally £108k in debt.
10 years of Stepchange have got that down to £49k

A bit of PPI reclaiming and an offer of help from my mother means I have £25k to offer as F&F settlement offer

Creditor.....Outstanding......Stepchange Payment
Lloyds.......£13.3k..............£101
Barclays....£9.4k................£82
Idem.........£7.4k................£42
Marlin........£3.7k................£28
Marlin........£4.4k................£55
Link...........£2.7k................£33
B/card........£2.3k...............£28
BoS...........£2.4k................£25
B/card........£1.4k...............£17
Asset Link....£1.4k..............£14
Beneficial......£0.5k.............£44

(Figures rounded up)


Offered them all 30% in March and got refused by everyone.
Explained that i was on a Stepchange DMP and would be for another 9 years
enclosed photocopies of.

DMP budget plan
stepchange list of outstanding creditors
rent statement for flat

Rather than go in with 5% increases. I figured I would just go straight in for 40% offers. The letter was worded as shown...

** Name & Address **
5th May 2015

Dear Sir / Madam.
Without Prejudice
Account Number :

I write with reference to the money which you are claiming on the above account.
I can confirm that I am unable to pay the money which I owe in full.
As you will no doubt be aware I have been on a Debt Management Plan through Stepchange for nearly 10 years and whilst I have man aged to half my debt there is still a large amount outstanding (Copy of all creditor and outstanding balances enclosed)
This has been a tough time, but despite owning no assets and renting a council flat, I did want to try and pay it off without taking an easier way out.
Having just done my annual review with Stepchange (Copy enclosed) I estimate I have about another 9 years on this DMP. I finally came clean to my family and after discussion and some soul searching my mother has offered to help me try and reduce my debt. She did say I should go Bankrupt but as stated earlier I wish to try and pay what I can.
The amount is not finate so in trying to be fair to all creditors
I am offering the same Percentage.
Having worked out who I owe what to I can raise £ **40% Amount ** and I want to offer this as an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you nor any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability.
I also request that, if accepted, you make an entry on my credit reference agency files relating to the above account as having being paid and the account closed.
Payment will be made in the form of a cheque from my Mother’s current account within 30 days of receiving your written agreement of this offer.
I look forward to hearing from you presently.

Yours faithfully

** Name **



Sent them last week and already got majority of them replying saying no.


Lloyds, BoS, Idem say make another offer

Beneficail say same but they are a low amount with a payment that means its paid off in 12 months so they are unlikely to accept

Barclaycard say 70% on 1 card, 75% on the rest

Barclays want 80%. They actually said 70% when I offered 30%

Link said they would take 60% when I offered 30%

The 2 Marlin accounts replied to my 30% offers saying they would take 40% and 50% so if they come back with similar I will get my mother to write the cheque there and then.

I am happy to accept F&F settlement terms that say it will stay on record for 6 years as I have more than that on DMP and I just want rid of the debt.

Has anyone had any experience of more favourable settlements with the firms above. Do you think the lack of acceptance may be because they know I claimed PPI of them ?

Also has anyone had any experience of F&F settlements with Marlin. Are they likely to try and come back in the future even though I worded my original letter like the Debtline template

I didn't expect to get away with my debt but 10 years into a 19 year DMP i thought I might have at least had 1 bite at 40 %

cheers for reading.
All comments, advice welcome

NittyGritty

just stick with the 5% increments around every month, you will be more likely to have them accepted if they have been passed over to debt agencys rather than with the original creditor.


don't get too down when they say no, they may have a different answer next time around.


good luck, fingers crossed you can get one accepting and keep bringing down the debt bit by bit

bennyhill_2

NewcastlePaul wrote: »

Was originally £108k in debt.
10 years of Stepchange have got that down to £49k

A bit of PPI reclaiming and an offer of help from my mother means I have £25k to offer as F&F settlement offer

Creditor.....Outstanding......Stepchange Payment
Lloyds.......£13.3k..............£101
Barclays....£9.4k................£82
Idem.........£7.4k................£42
Marlin........£3.7k................£28
Marlin........£4.4k................£55
Link...........£2.7k................£33
B/card........£2.3k...............£28
BoS...........£2.4k................£25
B/card........£1.4k...............£17
Asset Link....£1.4k..............£14
Beneficial......£0.5k.............£44

(Figures rounded up)


Offered them all 30% in March and got refused by everyone.
Explained that i was on a Stepchange DMP and would be for another 9 years
enclosed photocopies of.

DMP budget plan
stepchange list of outstanding creditors
rent statement for flat

Rather than go in with 5% increases. I figured I would just go straight in for 40% offers. The letter was worded as shown...

<snip>

I wonder if it would be worth dropping your monthly payments to each, to £1 per month and then approaching them again in six months with F&F offers?

I share some of the same DCA's, and the debts are of a similar age (2007 all defaulted) but have about twice the overall debt as you, and when I approached them informally in March to get an idea on settlement figures most offered an instant 60% off. I'm waiting on 3 CCA requests to come back, and am going to offer 10% of original debt, but will adjust for each, for example, where you have:

Lloyds @ £13k, £1.3k is a reasonable sum to offer, whereas Barclaycard @ £2.4k, I'd say 30% would be a reasonable figure to offer £720. Personally I don't think I'm going to advise to each DCA what the other creditors will be offered.

Keep us posted as to how you get on...

runforlife

There is a formula that I have seen (think on National Debtline) which seems to be industry standard and worth consideration for your offer.

Take the available lump sum and multiply that figure by the cost of each debt.
Divide that result by the total amount owed to all the creditors.
That is the amount you then offer.

(Lump sum x Individual Debt) / Total debt = Offer

Example:

You have £10,000 owing to 4 creditors and an available lump sum of £3500

£ 2500 to Mastercard
£ 1200 to Visa
£ 3500 to Loan
£ 2800 to Storecard

Using the formula then:
£3500 (lump sum available) x £2500 (debt to Mastercard)
÷£10,000 (the total amount you owe to ALL creditors)
= £875 (offer to Mastercard)

So in your case with Lloyds you would offer £6785.71
made up of (£25000 x £13300) / £49000 = £6785.71

That's obviously more than the 30% figure you offered because 30% of £49000 is £14700 (whereas you have £25000).The Lloyds calculation utilises the full £25000.

Infact it's over 50% so when offering your settlement be careful how much available lump sum in total you are disclosing. I suspect the offers may have been not accepted as they will want to know how much you have available in the form of a lump sum. I also suspect it will help the creditor make a decision once they know the amount owed to other creditors which should really benefit you. In any case can they not just check your credit record as some creditors report the actual balance outstanding anyway.

As others have said it seems helpful to declare where the source of this money has derived, though of course you don't have to.

NewcastlePaul

NewcastlePaul wrote: »

Was originally £108k in debt.
10 years of Stepchange have got that down to £49k

A bit of PPI reclaiming and an offer of help from my mother means I have £25k to offer as F&F settlement offer

Creditor.....Outstanding......Stepchange Payment
Lloyds.......£13.3k..............£101
Barclays....£9.4k................£82
Idem.........£7.4k................£42
Marlin........£3.7k................£28
Marlin........£4.4k................£55
Link...........£2.7k................£33
B/card........£2.3k...............£28
BoS...........£2.4k................£25
B/card........£1.4k...............£17
Asset Link....£1.4k..............£14
Beneficial......£0.5k.............£44

(Figures rounded up)


Offered them all 30% in March and got refused by everyone.

Offered 40%

5.4k to Lloyds - Refused (said make another offer)
2.9k to Idem - as above
£935 to BoS - as above
£225 to Beneficial - as above


3.8k to Barclays - Refused - they would accept 6.7k
£940 to Barclaycard - Refused - they would accept 1.8k
£570 to Barclaycard - Refused - they would accept 1.2k
£570 to Asset Link - Refused - they would accept 1.2k

Still waiting for replies to below
1.5k to Marlin
1.8k to Marlin
1.1k to Link

8 out of 11 offers of 40% refused.
bearing in mind some will only accept 75-80% is it even worth writing in a few months with 50% offers?

sourcrates

NewcastlePaul wrote: »

Offered 40%

5.4k to Lloyds - Refused (said make another offer)
2.9k to Idem - as above
£935 to BoS - as above
£225 to Beneficial - as above


3.8k to Barclays - Refused - they would accept 6.7k
£940 to Barclaycard - Refused - they would accept 1.8k
£570 to Barclaycard - Refused - they would accept 1.2k
£570 to Asset Link - Refused - they would accept 1.2k

Still waiting for replies to below
1.5k to Marlin
1.8k to Marlin
1.1k to Link

8 out of 11 offers of 40% refused.
bearing in mind some will only accept 75-80% is it even worth writing in a few months with 50% offers?

I`d just use £705 of that money and declare Bankruptcy if it was me.
They will then all get next to nothing.

You have done very well, over the last ten years, but that is an awful long time, and the prospect of another 9 years of the same, would do me in.

I would not hesitate, its a no brainer for me this one.

Historybuff

Hi,
Out of the blue N@wide have offered to settle the overdraft I owe for 65% of the amount owing. I have two weeks to get the money together or the offer is withdrawn. It's highly unlikely that I will be able to get this amount together by then, but if by some miracle I am able to get say 50% of the money together, is it worth offering them that? It has only just gone to the recoveries dept and has not been passed on to a collections agency.

fatbelly

sourcrates wrote: »

I`d just use £705 of that money and declare Bankruptcy if it was me.
They will then all get next to nothing.

You have done very well, over the last ten years, but that is an awful long time, and the prospect of another 9 years of the same, would do me in.

I would not hesitate, its a no brainer for me this one.

Maybe. Generally I'd agree.

But I'm not sure in this case. Newcastle Paul has 25k cash which the official receiver will take, and is paying 469 per month via stepchange. He stands to get an IPA over 36 months so that's 17k. Adding the 25k means he's potentially losing 42k plus the 705 fees to clear 49k debt.

We know that he can make offers of 50% or lower, and Marlin have already said they would accept 40 and 50%.

sourcrates

fatbelly wrote: »

Maybe. Generally I'd agree.

But I'm not sure in this case. Newcastle Paul has 25k cash which the official receiver will take, and is paying 469 per month via stepchange. He stands to get an IPA over 36 months so that's 17k. Adding the 25k means he's potentially losing 42k plus the 705 fees to clear 49k debt.

We know that he can make offers of 50% or lower, and Marlin have already said they would accept 40 and 50%.

Yes good point.

Wasn't sure if he had the 25k yet or not.

I'm actually surprised they are holding out for more, despite the timescales involved.